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 2019
Date: 2020-06-26
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, 26.6.2020  COM(2020) 288 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 2019  
 
 
 
 
 
 
CONTENTS 

FOREWORD ............................................................................................... 2 

EUROPEAN UNION POLITICAL AND FINANCIAL FRAMEWORK, GOVERNANCE 
AND ACCOUNTABILITY ............................................................................... 3 

NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS ............................... 10 

HIGHLIGHTS OF THE FINANCIAL YEAR 2019 ............................................... 11 

CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES ............ 13 

BALANCE SHEET ................................................................................... 15 

STATEMENT OF FINANCIAL PERFORMANCE .............................................. 16 

CASHFLOW STATEMENT ......................................................................... 17 

STATEMENT OF CHANGES IN NET ASSETS ............................................... 18 

NOTES TO THE FINANCIAL STATEMENTS ................................................. 19 

FINANCIAL STATEMENT DISCUSSION AND ANALYSIS ................................... 96 

BUDGETARY IMPLEMENTATION REPORTS AND EXPLANATORY NOTES ........... 110 

GLOSSARY ............................................................................................ 162 

LIST OF ABBREVIATIONS ........................................................................ 166 

 
 
 
 
Annual accounts of the European Union 2019 

FOREWORD 

the 

and 

It  is  my  pleasure  to 
present 
2019 
annual accounts of the 
European  Union.  They 
provide  a  complete 
overview  of  the  EU 
finances 
the 
implementation  of  the 
EU  budget  for  the  last 
including 
year, 
on 
information 
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 
financial  and 
integrated 
Commission’s 
accountability  reporting  package  and  form 
an essential part of our highly developed system 
of financial accountability. 

The  EU  budget  proved  once  more  that  it  means 
added value for citizens, companies and regions: 
despite  its  limited  amount,  representing  around 
2 %  of  all  public  spending  in  the  Union,  it 
complements national budgets and supports our 
common political priorities.  

The 2019 budget was the penultimate budget of 
the  current  multiannual  financial  framework 
(MFF).  The 
implementation  of  almost  all 
programmes  was  at  cruising  speed,  with  the 
exception  of  new  programmes,  such  as  the 
European  Defence 
Industrial  Development 
Programme  (EDIDP),  or  actions  for  which  the 
legislative  process 
recently.  The 
implementation  of  the  EU  budget  totalled  EUR 
178.8 billion  in  commitment  appropriations,  and 
EUR 159.1 billion in payment appropriations.  

finished 

In  line  with  the  European  Commission  proposal 
of  May  2018,  a  significant  portion  of  the  2019 
budget  went  to  programmes  to  stimulate  the 
creation  of  jobs,  especially  for  young  people, 
and  to  boost  growth,  strategic  investments  and 
convergence.  The  EU  has  also  continued 
supporting the efforts to effectively deal with the 
migration challenge, both inside and outside the 
EU. 

in 

the 

Measures  to  support  economic  growth  and 
reduce  the  economic  gaps  between  regions 
amounted to nearly half of the funds committed. 
EU  funding  contributed  EUR  12.4  billion  to 
research  and  innovation  under  Horizon  2020, 
including 
field  of  high-performance 
computing.  The  budget  also  proved  in  other 
areas  that  it  is  an  investment  in  the  future:  it 
increased expenditure on education and training 
by 20 % for Erasmus+ as compared to 2018 and 
by  37 %  for  the  Connecting  Europe  Facility, 
which fosters transport and digital infrastructure. 
Support for agriculture and rural areas remained 
stable  at  EUR  57.9  billion,  contributing  also  to 
the  fight  against  climate  change  and  to  the 
promotion of sustainable growth. 

from 

The  2019  budget  provided 
the  necessary 
flexibility  to  address  the  internal  aspect  of 
migration  issues,  with  a  total  of  EUR  1.2  billion 
the  Asylum,  Migration  and 
support 
Integration Fund, along with EUR 533 million for 
border  management  and  security  from  the 
Internal  Security  Fund.  A  total  of  EUR  5  million 
was  also  allocated  to  the  creation  of  the  new 
European  Public  Prosecutor’s  Office,  set  up  to 
the  EU  budget, 
prosecute  crimes  against 
including 
and 
laundering 
fraud,  money 
corruption. 

Even  before  the  Coronavirus  crisis  the  EU 
Budget  2019  showed  the  importance  of  a 
functioning  multiannual 
framework 
which  provides 
the  necessary  means  and 
flexibility  to  act  and  to  react  to  upcoming 
challenges. This flexibility will also play a role for 
the  next  multiannual  financal  framework,  which 
is at the heart of the recovery plan for Europe.  

financial 

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 
and 
effectively  ensures 
compliance  and 
increases  the  accountability  of  EU  spending.  It 
helps  to  engage  with  citizens  and  with  other 
stakeholders,  and  to  maintain  their  confidence 
and trust in the European Union.  

agility.  Reporting 

consistently 

legal 

Johannes Hahn 

Commissioner for Budget and Human 
Resources 

2 

 
 
 
 
 
Annual accounts of the European Union 2019 

EUROPEAN UNION POLITICAL AND 
FINANCIAL FRAMEWORK, GOVERNANCE 
AND ACCOUNTABILITY 

The European Union (EU) is a Union on 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  promoting  the  general  interest  of  the  Union  which  includes  executing  the  budget  and  managing 
programmes  in  cooperation  with  the  Member  States  and  in  accordance  with  the  principle  of  sound 
financial management. 

The EU pursues the objectives established by the Treaty with a number of tools, one of which is the EU 
budget. Others are, for example, a common legislative framework or joint policy strategies. 

Commission political 
priorities 

6 HEADLINE AMBITIONS 

The  political  priorities  of  the  Commission  are  defined  in  the  political 
guidelines set by the President of the Commission. Under President von der 
Leyen, the Commission which took office on 1 December 2019 will focus on 
the following six headline ambitions: 

  A European Green Deal 

– Striving to be the first climate-neutral continent 

  An economy that works for people 

– Working for social fairness and prosperity 

  A Europe fit for the digital age 

– Empowering people with a new generation of technologies 

  Promoting our European way of life 

– Building a Union of equality in which we all have the same access to opportunities 

  A stronger Europe in the world 

– Europe to strive for more by strengthening our unique brand of responsible global 
   leadership 

  A new push for European democracy 

– Nurturing, protecting and strengthening our democracy 

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 TEU). 

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Annual accounts of the European Union 2019 

The  previous  Commission  focused  on  ten  priorities  set  by  former  President  Jean-Claude  Juncker  and  in 
line with Europe 2020, the EU’s long-term growth strategy at the time: 

  A new boost for jobs, growth and 

  A balanced and progressive trade policy 

investment; 

  A connected digital single market; 
  A resilient Energy Union with a forward-

looking climate change policy; 

  A deeper and fairer internal market with 

a strengthened industrial base; 
  A deeper and fairer Economic and 

Monetary Union (EMU); 

to harness globalisation; 

  An area of justice and fundamental 
rights based on mutual trust; 
Towards a new policy on migration; 
Europe as a stronger global actor; 

 
 
  A Union of democratic change.

2030 Agenda for 
Sustainable 
Development 

The  2030  Agenda  for  Sustainable  Development  and  its  17  Sustainable 
Development Goals, adopted by the United Nations in September 2015, have 
given  a  new  impetus  to  global  efforts  to  achieve  sustainable  development. 
The EU played an important role in shaping the 2030 Agenda, reflecting the 

fact that sustainable development has long been at the heart of the European project. The Sustainable 
Development Goals are firmly anchored in the EU Treaties and mainstreamed in all the EU policies and 
initiatives. The EU budget plays an essential role in addressing many sustainability challenges including 
poverty,  youth  unemployment,  health  and  well-being,  climate  change,  loss  of  biodiversity,  sustainable 
energy and migration. 

Multiannual financial 
framework and 
spending programmes 

The policies supported by the EU budget are implemented in accordance with 
the  multiannual  financial  framework  (MFF)  and  corresponding  sectoral 
legislation  defining  spending  programmes.  These  translate  the  EU’s  political 
priorities into financial terms over a period long enough to be effective and  

to  provide  a  coherent  long-term  perspective  for  beneficiaries  of  EU  funds  and  co-financing  national 
authorities. Maximum annual amounts (ceilings) are set 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 for 
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. The current MFF covers the 
period 2014-2020. 

Interinstitutional 
agreement 

The  multiannual 
the 
framework 
interinstitutional  agreement2,  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 Treaty on  
the  Functioning  of  the  European  Union  (TFEU),  is  to  implement  budgetary  discipline,  to  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  Article  314  TFEU.  According  to  the  principle  of  budgetary 
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   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 2019 

Management modes 

The EU budget is implemented in three management modes which determine 
how the money is paid out and managed: 

  Shared  management:  the  vast  proportion  of  the  budget  is  managed  under  a  system  of  shared 
management by the Commission in cooperation with the Member States, notably in the areas of 
structural funds and agriculture. 

  Direct  management:  the  Commission  also  manages  programmes  itself  and  can  delegate  the 

implementation of specific programmes to executive agencies. 

 

Indirect  management:  Expenditure  decisions  can  also  be  indirectly  managed  via  other  bodies 
within  or  outside  the  EU.  The  Financial  Regulation  and/or  delegation  agreements  define  the 
necessary  control  and  reporting  mechanisms  by  these  entities  and  the  supervision  by  the 
Commission where budget implementation tasks are entrusted to national agencies, the European 
Investment  Bank  Group,  third  countries,  international  organisations  (e.g. the World  Bank  or  the 
United Nations) and other entities (e.g. EU decentralised agencies, Joint Undertakings). 

Financial Regulation 

The  Financial  Regulation  (FR)  3  applicable  to the  general  budget  is  a  central 
act in the regulatory architecture of the EU´s finances. It defines in detail the 
financial rules applicable to the execution of the EU budget and the roles of 
the different actors involved in ensuring that the money is used soundly and  

achieves the objectives set. 

2.  GOVERNANCE AND ACCOUNTABILITY 

2.1.  INSTITUTIONAL STRUCTURE 

The EU has an institutional framework which aims to promote its values, advance its objectives, serve its 
interests, those of its citizens and those of the Member States, and ensure the consistency, effectiveness 
and  continuity  of  its  policies  and  actions.  The  organisational  structure  consists  of  institutions,  agencies 
and  other  EU  bodies,  which  are  included  in  the  EU  consolidated  accounts  as  far  as  the  consolidation 
criteria as set out in the Financial Regulation and the applicable accounting rules are met (please refer to 
note 9 for the list of entities included in the scope of consolidation). 

The  European  Parliament,  jointly  with  the  Council,  exercises  legislative  and  budgetary  functions.  The 
Commission  is  politically  accountable  to  the  European  Parliament.  The  Council  also  carries  out  policy-
making and coordinating functions within the general political direction and priorities of the Union set by 
the European Council. 

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;  for 
allocating EU funding and managing financing programmes; and for representing the EU internationally. 

The Commission implements the budget, in large part in cooperation with the Member States4. 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  when  they 
share  the  implementation  of  the  budget  and  the  resulting  responsibilities.  They  also  lay  down  the 
responsibilities and detailed rules for each of the EU’s institution as concerns their own expenditure. 

3   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 
2012/966 – OJ L 193 of 30 July 2018, p. 1. 

4   See Article 317 TFEU. 

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Annual accounts of the European Union 2019 

2.2.  THE COMMISSION'S GOVERNANCE STRUCTURE 

The  Commission  has  a  unique  governance  system,  with  a  clear  distinction  between  political  and 
administrative oversight structures and well-defined lines of responsibility and financial accountability5.  

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. 

The Commission performs its functions under the leadership of the College of Commissioners, which sets 
priorities and takes overall political responsibility for the work of the Commission. The President decides 
on  the  internal  organisation  of  the  Commission,  ensuring  that  it  acts  consistently,  efficiently  and  as  a 
collegiate  body.  The  internal  arrangements  create  a  structure  of  robust  controls  and  management  tools 
which allow the College of Commissioners to take political responsibility for the work of the Commission, 
namely  the  decisions  it  takes  as  well  as  for  coordinating,  executive  and  management  functions,  as  laid 
down in the Treaties. 

The  College  delegates  the  operational  implementation  of  the  budget  and  finanical  management  to  the 
Directors-General  and  Heads  of  Service  who  lead  the  administrative  structure  of  the  Commission6.  This 
decentralised  approach  creates  an  administrative  culture  that  encourages  civil  servants  to  take 
responsibility  for  activities  over  which  they  have  control  and  requires  them  to  provide  assurance  as 
concerns the activities for which they are accountable. 

The  central  services  support  the  Directors-General  and  Heads  of  Service  in  the  exercise  of  their 
responsibilities. In particular, the Corporate Management 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, communication and information management.7 

This  governance  system  is  based  on  the  Treaties  and  has  evolved  over  time  to  adapt  to  a  changing 
environment and to remain in line with best practice as set out in relevant international standards8. The 
further streamlining and strengthening of the arrangements introduced in 20189 took into account audit 
work  by  the  European  Court  of  Auditors10  and  the  Commission’s  Internal  Audit  Service.  As  required  by 
the  Financial  Regulation  (Article  247),  the  Annual  Management  and  Performance  Report  for  the  EU 
budget includes information on the key governance arrangements in the Commission. 

2.3.  PERFORMANCE FRAMEWORK OF THE EU BUDGET 

Implementing  robust  performance  frameworks  is  essential  for  ensuring  a  strong  focus  on  results, 
European level added value and the sound management of EU programmes. The performance framework 
for the EU budget is highly developed, and ranks higher than that of any individual country assessed by 
the  Organisation  for  Economic  Co-operation  and  Development  (OECD)  in  its  standard  index  of 
performance budgeting frameworks.  

The EU budget performance framework reports on several types and levels of strategic goals, objectives 
and  indicators.  It  also  takes  account  of  the  complementarity  and  mainstreaming  of  policies  (such  as 
addressing climate change or gender equality) and programmes and the key role of the Member States in 
implementing the EU budget.  

5   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. 

6   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). 

7   See Commission Decision of 21 November 2018 on the Corporate Management Board, C (2018) 7706 final. 
8   E.g. the Commission’s internal control principles are based on the COSO 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-governan-
ce-european-commission_en.pdf. 

10  Special Report N° 27/2016 on ‘Governance at the European Commission – best practice?’ 

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Annual accounts of the European Union 2019 

  Objectives, indicators and targets are included in the programmes' legal bases and every year the 
Commission  reports  on  them  through  the  programme  statements  that  accompany  the  draft 
budget.  The  latter  provide  the  information  necessary  for  understanding  the  execution  of 
programmes  and  measuring  their  performance;  this 
financial 
commitments  under  the  multiannual  financial  framework,  programme  performance  baselines 
(starting  points  for  policy  action),  targets  (to  be  achieved  at  the  end  of  the  multi-annual 
programming period), and intermediate milestones. 

includes  the 

long-term 

 

 

To ensure resources are allocated to priorities and that every action brings high performance and 
added value, the Commission promotes a performance culture. 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. 

These  elements  place  the  budget  authority  in  a  strong  position  to  factor  in  performance  information 
during the annual budgetary procedure. 

2.4.  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  the  Internal  Rules11)  and  applied  accordingly.  As  authorising  officers  by 
delegation,  the  Commission’s  Directors-General  and  Heads  of  Service  are  responsible  for  the  sound 
financial  management  of  EU  resources,  compliance  with  the  provisions  of  the  Financial  Regulation,  risk 
management and establishing an appropriate internal control framework.  

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 a sound financial management standpoint. Tasks can further be delegated 
to Directors, Heads of Unit and others, who thereby become Authorising Officers by Sub-Delegation. Each 
authorising  officer  by  delegation  may  rely  on  one  or  two  directors  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,  including 
through the work of the Corporate Management Board.  

The Financial Regulation requires each authorising officer to prepare an annual activity report (‘AAR’) on 
what  has  been  achieved  and  on  internal  control  and  financial  management  during  the  year.  The  AAR 
includes  a  declaration  that  resources  have  been  used  based  on  the  principles  of  sound  financial 
management  and  that  control  procedures  are  in  place  which  provide  the  necessary  guarantees 
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 assumes political responsibility for the financial management of the 
EU budget. 

The  Accounting  Officer  of  the  Commission  is  centrally  responsible  for  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.  

11  Since  mid-2019  (further  to  the  revised  Article  12  of  the  Internal  Rules)  the  management  of  the  European 

Development Fund (EDF) is co-delegated among five departments (DEVCO, ECHO, EAC, EACEA, JRC). 

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Annual accounts of the European Union 2019 

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.  

The Audit Progress Committee ensures the independence of the Internal Auditor and monitors the quality 
of  internal  audit  work  and  the  follow-up  given  by  the  Commission  to  internal  and  external  audit 
recommendations,  as  well  as  to  the  European  Court  of  Auditors’  discharge-related  findings  and 
recommendations  on  the  reliability  of  the  annual  consolidated  EU  accounts.  The  advisory  role  of  the 
committee  contributes  to  the  overall  further  improvement  of  the  Commission’s  effectiveness  and 
efficiency  in  achieving  its  goals  and  facilitates  the  College’s  oversight  of  the  Commission’s  governance, 
risk management, and internal control practices. 

2.5.  FINANCIAL REPORTING 

Reporting  on  the  EU  budget  is  delivered  through  the  Integrated  Financial  and  Accountability 
Reporting  package  which  brings  together  comprehensive  information  on  the  implementation, 
performance,  results,  financial  management  and  protection  of  the  EU  budget.  This  comprises  the 
consolidated  annual  accounts  of  the  EU,  the  Annual  Management  and  Performance  Report  for  the  EU 
budget (which includes an evaluation on the Union’s finances based on the results achieved), the annual 
report on internal audits carried out, 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  package  provides  the  public  with  a  comprehensive  view  of  the  financial  and  operational 
situation of the EU budget 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: 

 

 

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. 

Reporting and Accountability in the Commission: 

Integrated Financial & 
Accountability Reporting 
Article 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 five 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 

8 

 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.6.  EXTERNAL AUDIT AND DISCHARGE PROCEDURE 

In  line  with  the  principles  of  sound  financial  management,  funds  must  be  managed  in  an  effective, 
efficient and economic manner. An accountability framework based on comprehensive reporting, external 
audit and political control exists to provide reasonable assurance that EU funds are spent well in a proper 
manner. 

Every year the European Court of Auditors, based on a systematic and thorough approach, examines 
the  reliability  of  the  accounts,  whether  all  revenue  has  been  received  and  all  expenditure  incurred  in  a 
lawful  and  regular  manner  and  whether  the  financial  management  and  the  qualitative  aspects  of 
budgeting, including the performance dimension, have been sound. The publication of the annual report 
of  the  European  Court  of  Auditors  is  the  starting  point  for  the  discharge  procedure.  The  auditors  also 
prepare special reports on specific spending or policy areas, or on budgetary or management issues. 

The  European  Parliament  decides,  after  a  recommendation  by  the  Council,  on  whether  or  not  to 
provide its final approval, known as ‘granting discharge’, on the way the Commission implemented the EU 
budget  in  a  given  year.  The  annual  discharge  procedure  ensures  that  the  Commission  is  held  politically 
accountable for the implementation of the EU budget. 

The  decision  on  the  discharge  is  also  based on  the  Commission’s  integrated  financial  and  accountability 
reporting,  on  hearings  of  Commissioners  and  on  the  replies  provided  to  written  questions  addressed  to 
the Commission. 

9 

 
 
Annual accounts of the European Union 2019 

NOTE ACCOMPANYING THE 
CONSOLIDATED ACCOUNTS 

The  consolidated  annual  accounts  of  the  European  Union  for  the  year  2019  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. 

Rosa ALDEA BUSQUETS 

Accounting Officer of the Commission 

18 June 2020 

10 

 
 
 
 
 
 
Annual accounts of the European Union 2019 

HIGHLIGHTS OF THE FINANCIAL YEAR 
2019 

Implementation of the 2019 Union budget 

The EU budget has an important role to support the delivery of the Union's policies and priorities. Despite 
its limited amount, representing around 2% of all public spending in the Union, it complements national 
budgets  and  has  a  clear  focus  on  investment  and  additionality.  It  is  a  key  tool  among  the  wide  set  of 
European-level  policy  and  regulatory  instruments,  to  implement  policy  priorities  which  all  EU  members 
have  agreed  upon,  translated  into  a  Multiannual  Financial  Framework  containing  the  different 
programmes and maximum expenditure ceilings. 

The  EU  budget  for  2019,  adopted  on  12 December 2018,  confirms  that  the  EU  is  directing  money  to 
where  the  needs  are.  In  2019,  and  in  line  with  the  European  Commission  proposal  of  May 2018,  the 
biggest part of the EU budget went to stimulate the creation of jobs, especially for young people, and to 
boost growth, strategic investments and convergence. The  EU has also continued supporting the efforts 
to effectively deal with the migration challenge, both inside and outside the EU. 

The  2019  adopted  budget  contributed  to  the  strength  and  resilience  of  the  European  economy  and  to 
promoting  solidarity  and  security  both  within  and  beyond  its  borders.  The  2019  budget  was  the 
penultimate budget of the current multiannual financial framework (MFF). The implementation of almost 
all  programmes  was  at  cruising  speed,  with  the  exception  of  new  programmes,  such  as  the  European 
Defence Industrial Development Programme (EDIDP), or actions for which the legislative process finished 
recently. 

The  implementation  of  the  EU  budget  in  2019  totalled  EUR 178.8 billion  in  commitment  appropriations, 
and  EUR 159.1 billion  in  payment  appropriations.  This  implementation  can  be  considered  satisfactory, 
with  only  minor  adjustments  made  throughout  the  year.  After  amounts  carried  over  to  2020,  the 
implementation reached 99.4% of commitment appropriations and 99.5% of payment appropriations. 

Measures  to  support  economic  growth  and  reduce  the  economic  gaps  between  regions  amounted  to 
nearly  half  of  the  funds  committed.  EU  funding  contributed  EUR 12.4 billion  to  research  and  innovation 
under  Horizon 2020,  including  in  the  field  of  high-performance  computing.  The  budget  increased  for 
education  and  training  (20%  more  for  Erasmus+  than  in  2018)  and  transport  and  digital  infrastructure 
(37% more for the Connecting Europe Facility). Support for agriculture and rural areas remained stable 
at  EUR 57.9 billion,  contributing  also  to  the  fight  against  climate  change  and  to  the  promotion  of 
sustainable growth. 

The  2019  budget  provided  the  necessary  flexibility  to  address  the  internal  aspect  of  migration  issues, 
with  a  total  of  EUR 1.2 billion  support  from  the  Asylum,  Migration  and  Integration  Fund,  along  with 
EUR 533 million  for  border  management  and  security  from  the  Internal  Security  Fund.  A  total  of 
EUR 5 million was also allocated to the creation of the new European Public Prosecutor’s Office, set up to 
prosecute crimes against the EU budget, including fraud, money laundering and corruption. 

Financial Statements – highlights 

Balance sheet 

  Under Property, Plant and Equipment, the four satellites launched in 2018 successfully passed the 
in-orbit testing in 2019. They have been added to the operational constellation in 2019, bringing 
it up to 26 satellites – see note 2.2. 

  Available  for  Sale  financial  assets  increased  by  EUR 3.0 billion,  due  to  the  continued  funding  of 
the  EFSI  &  EFSD  guarantee  funds,  as  well  as  Horizon  2020  Financial  Instruments.  Loans 
decreased by EUR 1.3 billion following the repayment of BOP loans by Romania and Latvia, offset 
somewhat by new MFA loans granted – see note 2.4. 

 

Pre-financing (i.e. advances paid to beneficiaries of EU funds) increased slightly by EUR 1.5 billion 
to EUR 51.4 billion – see note 2.5. 

11 

 
Annual accounts of the European Union 2019 

  Overall  the  total  Receivables  &  Recoverables  amounts  remained  at  a  similar  level  to  last  year, 

being EUR 24.0 billion – see note 2.6. 

  A  fall  in  the  long-term  interest  rate  used  to  value  employee  benefit  obligations  (the  so-called 
discount rate), becoming negative for the first time, led to a significant increase in the year-end 
liability, an increase of EUR 17.2 billion – see note 2.9. 

 

 

The  repayment  of  BOP  borrowings  of  EUR 1.5 billion  drove  the  decrease  in  financial  liabilities, 
somewhat offset by new borrowings linked to MFA loans granted – see note 2.11. 

Payables  and  accruals  remained  at  a  similar  level  to  2018,  EUR 94.1 billion  in  total  –  see  notes 
2.12 and 2.13. 

Statement of Financial Performance 

  On the revenue side there were EUR 3.0 billion higher GNI revenue following adjustments made 
for  past  amounts  (mostly  for  years  2012  to  2017)  as  GNI  bases  were  updated  with  real  data. 
Fines income was EUR 4.3 billion in 2019 – see note 3.1/3.4. 

 

Expenses  incurred  under  shared  management  increased  by  EUR 4.8 billion,  led  by  better 
implementation of programmes under ERDF & Cohesion fund as the current MFF advances – see 
note 3.9. 

Contingent Liabilities 

  Budgetary  guarantees  increased  by  EUR 2.7 billion  due  to  the  signing  of  new  EFSI  and  ELM 

operations in 2019 that are guaranteed by the EU budget – see note 4.1.1. 

12 

 
Annual accounts of the European Union 2019 

EUROPEAN UNION 
FINANCIAL YEAR 2019 

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.

13 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

CONTENTS 

BALANCE SHEET .............................................................................................. 15 

STATEMENT OF FINANCIAL PERFORMANCE ......................................................... 16 

CASHFLOW STATEMENT ................................................................................... 17 

STATEMENT OF CHANGES IN NET ASSETS .......................................................... 18 

NOTES TO THE FINANCIAL STATEMENTS ............................................................ 19 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

SIGNIFICANT ACCOUNTING POLICIES ..................................................... 20 

NOTES TO THE BALANCE SHEET ............................................................. 35 

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

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

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

FINANCIAL RISK MANAGEMENT .............................................................. 78 

RELATED PARTY DISCLOSURES .............................................................. 90 

EVENTS AFTER THE BALANCE SHEET DATE .............................................. 92 

SCOPE OF CONSOLIDATION ................................................................... 94 

14 

 
 
 
Annual accounts of the European Union 2019 

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 

 EUR million 
31.12.2019  31.12.2018 

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 

 515 
11 380 
 591 
66 714 
26 240 
3 607 
109 047 

4 514 
25 206 
20 367 
 68 
19 745 
69 900 
178 947 

 446 
11 185 
 591 
65 231 
26 006 
 416 
103 875 

4 168 
23 968 
24 248 
 73 
18 113 
70 570 
174 444 

(97 659) 
(3 710) 
(53 071) 
(154 440) 

(80 456) 
(3 281) 
(53 289) 
(137 025) 

(1 116) 
(1 446) 
(27 241) 
(67 227) 
(97 030) 
(251 470) 

 (852) 
(2 617) 
(32 227) 
(63 186) 
(98 882) 
(235 907) 

(72 523) 

(61 463) 

5 037 
(77 560) 
(72 523) 

4 961 
(66 424) 
(61 463) 

*  The  European  Parliament  adopted  a  budget  on  4  December  2019  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 2020. 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. 

15 

 
 
 
 
 
 
   
 
 
 
   
 
 
 
 
 
 
   
 
   
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

STATEMENT OF FINANCIAL PERFORMANCE 

Note 

2019 

2018      

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 
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 

108 820 
21 235 
18 128 
4 291 
2 627 
2 072 
157 174 

1 817 
1 298 
3 116 
160 289 

105 780 
22 767 
17 624 
6 740 
2 215 
3 312 
158 438 

3 115 
1 379 
4 494 
162 932 

(43 951) 

(43 527) 

(13 541) 

(13 149) 

(35 178) 

(11 218) 
(2 608) 

(30 230) 

(11 935) 
(2 826) 

(18 942) 

(17 551) 

(3 131) 

(3 396) 

(4 085) 
(2 875) 
(11 366) 
(1 491) 
(7 109) 
(155 493) 
4 796 

(4 016) 
(3 569) 
(10 929) 
(1 677) 
(6 208) 
(149 014) 
13 918 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

CASHFLOW STATEMENT 

Economic result of the year 
Operating activities 
Amortisation 
Depreciation 
(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 

2019 
4 796 

 107 
1 022 
1 255 
(1 472) 

EUR million 
2018 
13 918 

 104 
 998 
1 041 
 (947) 

 691 

(12 299) 

 5 
17 203 
 693 
(1 389) 
(4 985) 
4 041 
(1 803) 

(14 164) 

 111 

 222 
7 334 
 594 
(1 007) 
(6 821) 
 (716) 
 (556) 

(4 396) 

 (71) 

(1 392) 

(1 583) 

 (1) 

 (9) 

(2 964) 

(1 811) 

 (121) 

1 633 

1 633 
18 113 
19 745 

 7 

(5 998) 

(5 998) 
24 111 
18 113 

17 

 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF CHANGES IN NET ASSETS 

Annual accounts of the European Union 2019 

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 
Movement in Guarantee Fund reserve 
Fair value movements 
Remeasurements in employee benefits liabilities 
Other 
2018 budget result credited to Member States 
Economic result of the year 
BALANCE AS AT 31.12.2019 

Amounts to be called from Member States  
Accumulated Surplus/(Deficit) 
(75 234) 
 (186) 
– 
(4 396) 
 30 
 (556) 
13 918 
(66 424) 
 (21) 
– 
(14 164) 
 56 
(1 803) 
4 796 
(77 560) 

Other reserves  Fair value reserve 

Net Assets  

EUR million 

4 598 
 186 
– 
– 
 (54) 
– 
– 
4 730 
 21 
– 
– 
 (105) 
– 
– 
4 646 

 278 
– 
 (47) 
– 
– 
– 
– 
 231 
– 
 160 
– 
– 
– 
– 
 391 

(70 359) 
– 
 (47) 
(4 396) 
 (24) 
 (556) 
13 918 
(61 463) 
– 
 160 
(14 164) 
 (49) 
(1 803) 
4 796 
(72 523) 

18 

 
 
 
 
 
 
 
 
  
  
Annual accounts of the European Union 2019 

NOTES TO THE FINANCIAL STATEMENTS 

19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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  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,  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 
ensure the internal consistency of the EU consolidated accounts. 

Application of new and amended European Union Accounting Rules (EAR) 

New EAR which are effective for annual periods beginning on or after 1 January 2019 

The  following  new  EAR,  adopted  by  the  Accounting  Officer  of  the  Commission,  became  mandatorily 
effective for annual periods beginning on or after 1 January 2019: 

 

EAR  20  ‘Public  Sector  Combinations’,  which  is  based  on  IPSAS  40  ‘Public  Sector  Combinations’, 
establishes  the  requirements 
for  classifying,  recognising  and  measuring  public  sector 
combinations, i.e. the bringing together of separate operations into one public sector entity. 

The standard distinguishes beween two types of public sector combinations: amalgamations and 
acquisitions.  An  amalgamation  is  a  public  sector  combination  in  which  either  no  party  to  the 
combination  gains  control  on  one  or  more  operations,  or,  in  case  one  party  to  the  combination 
does  gain  control,  there  is  evidence  that  the  combination  has  the  economic  substance  of  an 
amalgamation  (the  standard  provides  several  indicators  relating  to  the  consideration  and  the 
decision-making  process  to  allow  for  that  assessment).  An  acquisition  is  a  public  sector 
combination  in  which  one party  to the  combination gains  control of  one  or  more operations  and 
there is evidence that the combination is not an amalgamation. 

Public sector combinations which are classified as an amalgamation are accounted for by appliyng 
the modified pooling-of-interests method, which requires that the resulting entity shall recognise 
the identifiable assets, liabilities and any non-controllling interests subject to the combination at 
their carrying amount with a corresponding increase or decrease in net assets (i.e. without giving 
rise to goodwill). 

Public sector combinations which are classified as acquisitions are accounted for by applying the 
acquisition  method,  which  requires  that  the  identifiable  assets  acquired  and  liabilities  assumed 
are  recognised  at  their  acquisition-date  fair-values,  and  any  non-controlling  interest  in  the 
acquired  operation  is  recognised  at  the  proportionate  share  of  the  acquired  operations’ 
identifiable net assets. Unlike an amalgamation an acquisition gives rise to goodwill (measured as 
the  excess  of  the  consideration  transferred  and  any  non-controlling  interest  over  the  net  of  the 
acquisition-date amounts of the identifiable assets acquired and liabilities assumed). 

The  standard  foresees  distinct  disclosure  requirements  in  order  to  enable  the  users  of  the  EU 
financial  statements  to  evaluate  the  nature  and  financial  effects  of  an  amalgamation  or 
acquisition,  as  well  as  the  financial  effects  of  adjustments  recognised  in  the  current  reporting 
period relating to such transactions that occurred during the period or previous reporting periods.  

Since there were no public sector combinations during the reporting period the new standard has 
no effect on the 2019 financial statements. 

New EAR adopted but not yet effective at 31 December 2019 

There are no new EAR adopted but not yet effective at 31 December 2019. 

20 

 
 
Annual accounts of the European Union 2019 

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 
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,  joint 
arrangements  and  associates.  The  complete  list  of  consolidated  entities  can  be  found  in  note  9.  It  now 
comprises  52  controlled  entities  and  1  associate.  Among  the  controlled  entities  are  the  EU  institutions 
(including the Commission, but not the European Central Bank) and the EU agencies (except those of the 
former 2nd pillar, i.e. the Common and Foreign Security Policy). The European Coal and Steel Community 
in  Liquidation  (ECSC  i.L.)  is  also  considered  as  a  controlled  entity.  The  EU’s  only  associate  is  the 
European Investment Fund (EIF). 

Entities  falling  under  the  scope  of  consolidation  but  immaterial  to  the  EU  consolidated  financial 
statements as a whole need not be consolidated or accounted for using the 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 2019, 7 entities have been classified as such minor entities. 

Controlled entities 

In  order  to  determine  the  scope  of  consolidation  the  control  concept  is  applied.  Controlled  entities  are 
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. 

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  of  which  the  EU  and  one  or  more  parties  have  joint  control.  Joint 
control is the agreed sharing of control of an arrangement by way of a binding arrangement, which exists 
only  when  decisions  about  the  relevant  activities  require  the  unanimous  consent  of  parties  sharing 
control.  Joint  agreements  can  be  either  joint  ventures  or  joint  operations.  A  joint  venture  is  a  joint 
arrangement that is structured through a separate vehicle and whereby the parties that have joint control 
of the arrangement have rights to the net assets of the arrangement. Participations in joint ventures are 
accounted  for  using  the  equity  method  (see  note  1.5.4).  A  joint  operation  is  a  joint  arrangement 
whereby the parties that have joint control of the arrangements have rights to the assets, and obligations 
for  the  liabilities,  related  to  the  arrangement.  Participations  in  joint  operations  are  accounted  for  by 

21 

 
Annual accounts of the European Union 2019 

recognising in the EU’s financial statements its assets and liabilities, revenue and expense, as well as its 
share of assets, liabilities, revenue and expense jointly held or incurred. 

Associates 

Associates are entities over which the EU has, directly or indirectly, significant influence but not exclusive 
or joint 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). 

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

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 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 

31.12.2019 
1.9558 
25.4080 
7.4715 
0.8508 
7.4395 
330.5300 

31.12.2018  Currency 
1.9558  PLN 
25.7240  RON 
7.4673  SEK 
0.8945  CHF 
7.4125  JPY 
320.9800  USD 

31.12.2019 
4.2568 
4.783 
10.4468 
1.0854 
121.9400 
1.1234 

31.12.2018 
4.3014 
4.6635 
10.2548 
1.1269 
125.8500 
1.145 

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, financial risk of accounts receivable and the amounts disclosed in the notes concerning 

22 

 
Annual accounts of the European Union 2019 

financial instruments, accrued revenue and charges, provisions, degree of impairment of intangible assets 
and  property,  plant  and  equipment,  net  realisable  value  of  inventories,  contingent  assets  and  liabilities. 
Actual results could differ from those estimates. Changes in estimates are reflected in the period in which 
they become known, if the change affects the period only, or that period and future periods, if the change 
affects both. 

1.5.  BALANCE SHEET 

1.5.1. 

Intangible assets 

An  intangible  asset  is  an  identifiable  non-monetary  asset  without  physical  substance.  An  asset  is 
identifiable if it is either separable (i.e. it is capable of being separated or divided from the entity, e.g. by 
being  sold,  transferred,  licensed,  rented,  or  exchanged,  either  individually  or  together  with  a  related 
contract, identifiable asset or liability, regardless of whether the entity intends to do so), or arises from 
binding arrangements (including rights from contracts or other legal rights), regardless of whether those 
rights are transferable or separable from the entity or from other rights and obligations). 

Acquired  intangible  assets  are  stated  at  historical  cost  less  accumulated  amortisation  and  impairment 
losses.  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 
capitalisable  costs  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. 

Intangible assets are amortised on a straight-line basis over their estimated useful lives (3 to 11 years). 
The estimated useful lives of intangible assets depend on their specific economic lifetime or legal lifetime 
determined by an agreement. 

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 is not depreciated as it is 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 % 
10 % 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. 

23 

 
Leases 

Annual accounts of the European Union 2019 

A  lease  is  an  agreement  whereby  the  lessor  conveys  to  the  lessee  in  return  for  a  payment  or  series  of 
payments the right to use an asset for an agreed period of time. Leases are classified as either finance 
leases or operating leases. 

Finance  leases  are  leases  where  substantially  all  the  risks  and  rewards  incidental  to  ownership  are 
transferred  to  the  lessee.  When  entering  a  finance  lease  as  a  lessee,  the  assets  acquired  under  the 
finance  lease  are  recognised  as  assets  and  the  associated  lease  obligations  as  liabilities  as  from  the 
commencement of the lease term. The assets and liabilities are recognised at amounts equal to the fair 
value  of  the  leased  property  or,  if  lower,  the  present  value  of  the  minimum  lease  payments,  each 
determined at the inception of the lease. Over the period of the lease term, the assets held under finance 
leases are depreciated over the shorter of the asset’s useful life and the lease term. The minimum lease 
payments  are  apportioned  between  the  finance  charge  (the  interest  element)  and  the  reduction  of  the 
outstanding liability (the capital element). The finance charge is allocated to each period during the lease 
term so as to produce a constant periodic rate of interest on the remaining balance of the liability, which 
is  presented  as  current/non-current,  as  applicable.  Contingent  rents  are  charged  as  expenses  in  the 
period in which they are incurred.  

An operating lease is a lease other than a finance lease, i.e. a lease where the lessor retains substantially 
all  the  risks  and  rewards  incidental  to  ownership  of  an  asset.  When  entering  an  operating  lease  as  a 
lessee,  the  operating  lease  payments  are  recognised  as  an  expense  in  the  statement  of  financial 
performance on a straight-line basis over the lease term with neither a leased asset nor a leasing liability 
presented in the statement of financial position. 

1.5.3. 

Impairment of non-financial assets 

An impairment is a loss in the future economic benefits or service potential of an asset, over and above 
the systematic recognition of the loss of the asset's future economic benefits or service potential through 
amortisation or depreciation (as applicable). 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 tested for impairment whenever there is an indication at the reporting date 
that  an  asset  may  be  impaired.  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.  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,  with  the  initial 
carrying amount subsequently being increased or decreased to recognise further contributions, the EU’s 
share  of  the  surplus  or  deficit  of  the  investee,  any  impairments  and  dividends.  The  initial  cost  together 
with all movements give the carrying amount of the investment in the financial statements at the balance 
sheet date. 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. 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. 

24 

 
Annual accounts of the European Union 2019 

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 (see note 1.3) 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 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  the  category  ‘fair  value  through  surplus  or  deficit’  if  acquired  principally 
for  the  purpose  of  being  sold  in  the  short  term,  or  if  so  designated  by  the  entity.  Derivatives  are  also 
presented 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. 

(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  classified  as  ‘at  fair  value  through  surplus  or  deficit,  ‘held-to-
maturity’ or ‘available for sale’ are recognised on their 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 

25 

 
Annual accounts of the European Union 2019 

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. 

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.  

26 

 
Annual accounts of the European Union 2019 

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 
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 

27 

 
Annual accounts of the European Union 2019 

have the obligation to return the pre-financing advance to the EU. As the EU retains control over the pre-
financing and is entitled to a refund for the ineligible part, the amount is presented as an asset.  

Pre-financing  is  initially  recognised  on  the  balance  sheet  when  cash  is  transferred  to  the  recipient.  It  is 
measured at the amount of the consideration given. In subsequent periods pre-financing is measured at 
the  amount  initially  recognised  on  the  balance  sheet  less  the  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 in 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 heading ‘Pre-financing’. 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. 

1.5.8.  Exchange receivables and non-exchange recoverables 

The EU Accounting Rules require a separate presentation of exchange and non-exchange transactions. To 
distinguish  between  the  two  categories,  the  term  ‘receivables’  is  reserved  for  exchange  transactions, 
whereas  for  ‘non-exchange  transactions’,  i.e.  when  the  EU  receives  value  from  another  entity  without 
directly giving approximately equal value in exchange, the term ‘recoverables’ is used (e.g. 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  fair  value  as  at  the  date  of  acquisition 
(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. 

28 

 
 
 
1.5.10.  Employee benefits 

Annual accounts of the European Union 2019 

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. 

Post-employment benefits 

The EU grants a set of post-employment benefits to employees, which include retirement, invalidity and 
survival  pensions  provided  under  the  Pension  Scheme  of  the  European  Officials  (PSEO),  as  well  as 
medical  coverage  provided  under  the  Joint  Sickness  Insurance  Scheme  (JSIS)  (see  note  2.9).  These 
benefits  are  provided  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: 

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.  

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). 

29 

 
                                                 
Annual accounts of the European Union 2019 

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’. 

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). 

30 

 
Annual accounts of the European Union 2019 

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. 

1.5.13.  Payables 

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. 

31 

 
 
 
Traditional own resources 

Annual accounts of the European Union 2019 

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. After the decision to impose a fine, the undertakings 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; or 

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

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 TFEU). The cash received is used to clear the recoverable. 
However, subject to the agreement of the Commission’s Accounting Officer, the undertaking may present 
a bank guarantee for the amount instead. In that case the fine remains as a recoverable. If neither cash 
nor a guarantee is received and there are doubts about the undertaking’s solvency, a value reduction on 
the entitlement is recognised. 

In  case  the  undertaking  appeals  against  the  decision,  and  has  already  provisionally  paid  the  fine,  the 
amount  is  disclosed  as  a  contingent  liability,  or,  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, the outstanding recoverable 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. 

32 

 
 
 
Revenue from dividends 

Annual accounts of the European Union 2019 

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. 

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  their  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 
either  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.  A  contingent  liability  is  disclosed  unless  the 
possibility of an outflow of resources embodying economic benefits or service potential is remote. 

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. 

33 

 
Annual accounts of the European Union 2019 

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. 

34 

 
 
 
Annual accounts of the European Union 2019 

2.  NOTES TO THE BALANCE SHEET 

ASSETS 

2.1.  INTANGIBLE ASSETS 

Gross carrying amount at 31.12.2018 
Additions 
Disposals 
Transfer between asset categories 
Other changes 
Gross carrying amount at 31.12.2019 
Accumulated amortisation at 31.12.2018 
Amortisation charge for the year 
Amortisation written back 
Disposals 
Transfer between asset categories 
Other changes 
Accumulated amortisation at 31.12.2019 

Net carrying amount at 31.12.2019 
Net carrying amount at 31.12.2018 

EUR million 

1 073 
 178 
 (20) 
0 
 (1) 
1 230 
 (627) 
 (107) 
0 
 19 
0 
0 
 (715) 

 515 
 446 

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, the  four satellites launched  in 2018 successfully passed the in-orbit testing.They have  been 
added to the operational constellation in 2019 bringing the total to 26 satellites. The Galileo operational 
fixed  assets,  covering  both  satellites  and  ground  installations,  amounted  to  EUR 2  489  million  at  31 
December 2019, net of accumulated depreciation (2018: EUR 2 410 million). The remaining assets under 
construction  total  EUR 1 361 million  (2018:  EUR 1  324  million).  The  development  of  the  Galileo  system 
will  continue  until  the  system  reaches  its  full  operational  capacity.  When  completed,  the  Galileo 
constellation will comprise 30 satellites (including 6 spare satellites). 

Regarding  Copernicus,  no  new  satellites  became  operational  in  2019.  The  total  value  of  Copernicus 
operational fixed assets is EUR 1 153 million (2018: EUR 1 455 million), net of accumulated depreciation. 
A  further  EUR 1 453 million  related  to  Copernicus  satellites  is  recognised  as  assets  under  construction 
(2018: EUR 1 207 million). 

Fixed  assets  related  to  the  European  Geostationary  Navigation  Overlay  System  (EGNOS)  ground 
infrastructure of EUR 37 million (2018: EUR 52 million) are also included under the Space assets heading. 
In addition, EGNOS assets under construction amount to EUR 238 million (2018: EUR 130 million). 

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

35 

 
 
 
 
 
 
 
Property, plant and equipment 

Annual accounts of the European Union 2019 

Land and 
Buildings 
5 626 

Space 
assets 
5 259 

Plant and 
Equipment 
 641 

Furniture and 
Vehicles 
 270 

Computer 
Hardware 
 634 

Gross carrying amount at 31.12.2018 

Additions 

Disposals 

Transfer between asset categories 

Other changes 

 117 

 (1) 

 154 

 (0) 

 10 

 (0) 

 411 

– 

Gross carrying amount at 31.12.2019 

5 895 

5 680 

Accumulated depreciation at 31.12.2018 

(3 279) 

(1 342) 

Depreciation charge for the year 

 (190) 

 (659) 

Depreciation written back 

Disposals 

Transfer between asset categories 

Other changes 

 0 

 1 

 (35) 

– 

– 

 0 

– 

– 

 24 

 (117) 

 (7) 

 0 

 542 

 (540) 

 (31) 

 39 

 67 

 7 

 0 

 14 

 (28) 

 3 

 (0) 

 259 

 (198) 

 (17) 

 7 

 17 

 (2) 

 (0) 

Other 

 327 

 21 

 (29) 

 7 

 (0) 

Finance 
leases 
2 620 

 Assets under 
construction 
3 199 

 118 

 (3) 

 (98) 

– 

 941 

– 

 (477) 

 (10) 

EUR million 

Total 

18 575 

1 306 

 (236) 

 0 

 (10) 

 60 

 (58) 

 7 

 0 

 644 

 325 

2 638 

3 653 

19 635 

 (521) 

 (255) 

(1 257) 

 (64) 

 (27) 

 (94) 

 14 

 43 

 (5) 

 0 

 0 

 26 

 0 

 (0) 

 (0) 

 3 

 35 

– 

(7 390) 

(1 083) 

 61 

 157 

 (0) 

 0 

Accumulated depreciation at 31.12.2019 

(3 503) 

(2 001) 

 (457) 

 (194) 

 (533) 

 (255) 

(1 313) 

(8 255) 

NET CARRYING AMOUNT AT 31.12.2019 

NET CARRYING AMOUNT AT 31.12.2018 

2 392 

2 347 

3 679 

3 917 

 85 

 101 

 65 

 72 

 110 

 113 

 70 

 72 

1 325 

1 363 

3 653 

11 380 

3 199 

11 185 

36 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 2019, the EU held 
29.7 %  of  ownership  interests  in  the  EIF  (2018:  29.7 %)  and  29.7 %  of  the  voting  rights  (2018: 
29.7 %).  In  accordance  with  its  statutes,  the  EIF  is  required  to  allocate  at  least  20 %  of  its  annual  net 
result  to  a  statutory  reserve,  until  the  aggregate  reserve  amounts  to  10 %  of  subscribed  capital.  This 
reserve is not available for distribution. 

Participation at 31.12.2018 
Contributions 
Dividends received 
Share of net result 
Share in the net assets 
Participation at 31.12.2019 

EUR million 
European Investment Fund 
 591 
– 
 (3) 
 53 
 (49) 
 591 

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

Assets 
Liabilities 
Revenue 
Expenses 
Surplus/(deficit) 

31.12.2019 
Total EIF 
2 965 
 (975) 
 337 
 (161) 
 176 

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

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 

31.12.2019 
1 990 
29.70% 

 591 

EUR million 
31.12.2018 
1 988 
29.70% 

 591 

The EU, represented by the Commission, has paid in 20 % of its subscribed shares in the EIF capital at 
31 December 2019, 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 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.4.  FINANCIAL ASSETS 

Note 

31.12.2019 

EUR million 
31.12.2018 

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

Current 
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 
EEAS local staff pension plan 

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 
Connecting Europe Facility 
Risk Sharing Finance Facility 
EU SME Equity Facilities 
European Fund for South East Europe 
Risk Capital Operations 
Energy Efficiency Finance Facility 
Other 

Total 
Non-current 
Current 

15 211 
 134 
51 368 
66 714 

3 196 
 3 
1 316 
4 514 
71 228 

13 657 
 14 
51 560 
65 231 

1 786 
 2 
2 380 
4 168 
69 398 

31.12.2019 
1 863 
1 459 
 188 
 75 
3 585 

EUR million 
31.12.2018 
1 888 
1 506 
 188 
– 
3 582 

6 654 
2 545 
 595 
9 794 

2 455 
 699 
 597 
 507 
 166 
 112 
 105 
 387 
5 028 
18 407 
15 211 
3 196 

5 000 
2 465 
 9 
7 474 

2 031 
 540 
 679 
 464 
 115 
 113 
 101 
 343 
4 386 
15 443 
13 657 
1 786 

Out of the total of EUR 18 407 million, the EU holds available for sale financial assets in the form of debt 
securities  (e.g.  bonds)  of  EUR  14  998  million  (2018:  EUR  13  993  million),  equity  instruments  of 
EUR 2 801 million  (2018: EUR  1  365  million)  and  investments  in  money  market  funds  (such  as  the  EIB 
Unitary Fund) of EUR 608 million (2018: EUR 85 million). 

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. 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ECSC in Liquidation 

Annual accounts of the European Union 2019 

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

European Bank for Reconstruction and Development 

The  EU  holds  a  financial  investment  in  the  capital  of  the  European  Bank  for  Reconstruction  and 
Development  (EBRD),  in  which  the  number  of  shares  held  at  31  December  2019  were  90 044 
(2018: 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  the  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  were  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.  At  the  end  of  2019  the  assets  of  the  EFSI  guarantee  fund  totalled 
EUR  6  688  million  (2018:  EUR 5  452  million),  of  which  EUR  6  654  million  was  invested  in  available  for 
sale  financial  assets  (2018:  EUR  5  000  million),  while  another  EUR 1 879 million  (2018:  EUR  2  688 
million)  have  been  committed  but  not  yet  paid  into  the  fund  and  is  included  in  the  budgetary  RAL  and 
also disclosed as outstanding commitments not yet expensed in note 5.1. The fund will be progressively 
provisioned and will 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. The fund is managed by 
the EIB  and it is 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 amounts recovered from defaulting debtors for whom the fund has had to activate its guarantee. The 
Guarantee  Fund  for  external  actions  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  will  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)  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, along with 
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. Total payments received into the 
guarantee  fund  as  at  31  December  2019  amounted  to  EUR  600  million,  of  which  EUR 595 million  is 
invested in available for sale financial assets, while another EUR 95 million (2018: 325 EUR million) has 
been  committed  but  not  yet  paid  and  is  included  in  budgetary  RAL  and  also  disclosed  as  outstanding 
commitments not yet expensed in note 5.1. The EFSD Guarantee Fund will be progressively provisioned 

39 

 
Annual accounts of the European Union 2019 

and gradually reach EUR 750 million, i.e. 50 % of total future EFSD guarantee obligations covered by the 
EU budget, and will be further increased by other contributions.  

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 
which is 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. Given that 
the  significant  portion  of  the  RSFF  outstanding  operations  has  been  already  repaid,  in  2019  the  EIB 
partially  released  the  EU  guarantee,  which  resulted  in  a  decrease  in  the  EU  contingent  liability  as 
disclosed in the note 4.1.3. 

Connecting Europe Facility 

Pursuant  to  Regulation  (EU)  No  2013/1316,  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). It offers risk-sharing for debt financing 
in  the  form  of  senior  and  subordinated  debt  or  guarantee  as  well  as  support  for  project  bonds.  After 
19 June 2019, with the effect of the first amendment of the delegation agreement with the EIB, all CEF 
operations  deployed  by  the  EIB  are  assigned  to  one  of  the  two  portfolios:  debt  portfolio  or  non 
securitisable financing portfolio, for which a new portfolio-based risk sharing approach is introduced.  

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 

31.12.2019 

31.12.2018 

EUR million 

Notional 
amount  
 393 
1 439 
1 832 
1 439 
 393 

Fair value 

 3 
 134 
 137 
 134 
 3 

Notional 
amount  
 476 
 674 
1 150 
 674 
 476 

Fair value 

 2 
 14 
 16 
 14 
 2 

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  delivers  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 

40 

 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 heading Guarantee on equity portfolio comprises guarantees given by the EU to financial institutions 
on  portfolios  of  equity  investments  that  are  classified  as  derivative  financial  instruments  and  accounted 
for  as  a  financial  asset  or  financial  liability  at  fair  value  through  surplus  or  deficit.  The  total  amount 
represents  mainly  the  EFSI  guarantee  given  by  the  EU  to  the  EIB  Group  with  underlying  equity 
investments disbursed by the EIB and EIF amounting to EUR 1 420 million (2018: EUR 674 million). The 
fair  value  of  the  EU  guarantee  on  the  EFSI  equity  portfolios  totalled  EUR 134 million  (2018: 
EUR 14 million).  

Fair value hierarchy of financial assets 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 

31.12.2019 
15 482 
1 543 

1 518 

18 544 

EUR million 
31.12.2018 
13 993 
 275 

1 191 

15 459 

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 1.1.2019 
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 31.12.2019 

EUR million 

1 191 
 173 
 90 
 71 
– 
– 
 (8) 
1 518 

2.4.3. 

Loans 

Loans for financial assistance 
Other loans 
Total 
Non-current 
Current 

Note 
2.4.3.1 
2.4.3.2 

31.12.2019 
52 564 
 121 
52 684 
51 368 
1 316 

EUR million 
31.12.2018 
53 873 
 67 
53 939 
51 560 
2 380 

41 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.4.3.1.  Loans for financial assistance 

Annual accounts of the European Union 2019 

Total at 31.12.2018 
New loans 
Repayments 
Exchange differences 
Changes in carrying amount 
Impairment 

Total at 31.12.2019 
Non-current 
Current 

EFSM 

BOP 

MFA  Euratom 

47 400 
– 
– 
– 
 (6) 
– 
47 394 
46 800 
 594 

1 734 
– 
(1 500) 
– 
 (33) 
– 
 201 
 200 
 1 

4 388 
 420 
 (52) 
– 
 (1) 
– 
4 754 
4 112 
 643 

 254 
– 
 (40) 
– 
 (0) 
– 
 214 
 178 
 35 

ECSC in 
Liquidation 
 98 
– 
 (97) 
 5 
 (6) 
– 
 0 
– 
– 

EUR million 

Total 

53 873 
 420 
(1 689) 
 5 
 (45) 
– 
52 564 
51 290 
1 273 

The nominal value of loans for financial assistance at 31 December 2019 totals EUR 51 941 million (2018: 
EUR 53 206 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 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. 

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. During 2019, 
Romania  repaid  the  remaining  EUR  1  billion  of  its  outstanding  loan  amount  and  Latvia  repaid  EUR  500 
million of its EUR 700 million outstanding amount. 

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 2019, further disbursements of loans under MFA for a total amount of EUR 420 million were 
provided,  being  EUR 300 million  to  Tunisia,  EUR  100  million  to  Jordan  and  EUR  20  million  to  Moldova – 
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 214 million (2018: EUR 254 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. The last promissory notes were fully reimbursed in 2019. 

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 

31.12.2019 
0 % - 3.82 % 
0.08 % - 5.76 % 
2.88 % 
0.50 % - 3.75 % 
– 

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

42 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.4.3.2.  Other loans 

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

31.12.2019 
 73 
 1 
 46 
 121 
 78 
 42 

EUR million 
31.12.2018 
 64 
 2 
 0 
 67 
 38 
 28 

Nominal value of other loans at 31 December 2019 total EUR 728 million (2018: EUR 617 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. 

Impairment on other loans 

Loans with special conditions 
Subrogated loans 
Total 

EUR million 
31.12.2018  Additions  Reversals  Write-off   Other  31.12.2019 
 10 
– 
 658 
– 
 668 
– 

 8 
 579 
 587 

 2 
 75 
 77 

– 
 4 
 4 

– 
– 
– 

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  from  the  EFSI  Guarantee  Fund.  These  loans  are  fully  impaired  for  an  amount  of 
EUR 658 million  (2018:  EUR 579 million).  Guarantee  calls  are  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 the aim to recover any sums due. 

2.5.  PRE-FINANCING 

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

Current 
Pre-financing 
Other advances to Member States 

Total 

Note 

2.5.1 
2.5.2 

2.5.1 
2.5.2 

31.12.2019 

EUR million 
31.12.2018 

22 135 
4 045 
 60 
26 240 

22 314 
2 892 
25 206 
51 446 

21 814 
4 122 
 71 
26 006 

21 572 
2 396 
23 968 
49 974 

The level of pre-financing in the various programmes must be sufficient to ensure the necessary funding 
for  the  beneficiary  to  initiate  and  advance  the  project,  while  also  safeguarding  the  financial  interests of 
the EU and taking into consideration legal, operational and cost-effectiveness constraints.  

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.5.1. 

Pre-financing 

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 

Annual accounts of the European Union 2019 

Gross 
amount 

Cleared via 
accruals 

Net amount 
at 31.12.2019 

Gross 
amount 

Cleared via 
accruals 

EUR million 
Net amount 
at 31.12.2018 

3 193 

17 985 

6 830 

3 549 

– 

3 193 

3 743 

– 

(3 540) 

(1 530) 

(1 463) 

14 444 

18 088 

5 301 

2 086 

6 548 

4 684 

(3 461) 

(1 147) 

(2 498) 

3 743 

14 627 

5 401 

2 186 

31 557 

(6 533) 

25 024 

33 063 

(7 105) 

25 958 

12 839 

16 522 

 858 

(8 344) 

(10 339) 

 (665) 

4 495 

6 184 

 194 

12 531 

15 012 

 585 

(8 262) 

(9 540) 

 (433) 

30 219 

(19 347) 

10 872 

28 127 

(18 234) 

1 162 

1 491 

8 289 

10 570 

 (678) 

 (861) 

(5 317) 

(6 104) 

 484 

 630 

2 972 

4 467 

 762 

1 546 

7 684 

9 107 

 (207) 

 (879) 

(5 053) 

(5 426) 

21 513 

(12 960) 

8 553 

19 099 

(11 565) 

4 269 

5 472 

 152 

9 893 

 555 

 667 

2 631 

3 681 

7 534 

Total 

Non-current 

Current 

83 289 

(38 840) 

44 449 

80 289 

(36 904) 

43 386 

22 135 

61 154 

– 

(38 840) 

22 135 

22 314 

21 814 

58 476 

– 

(36 904) 

21 814 

21 572 

Pre-financing  represents  money  paid  out,  and  thus  the  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  accepted  and  recognised  in  the 
statement of financial performance. 

For shared management, almost all pre-financing relates to the current programming period. There is an 
initial pre-financing which will not be cleared (i.e. recognised in the statement of financial performance) 
before the end of the programming period and is shown as a non-current pre-financing. There is also an 
annual  pre-financing  which  is  cleared  on  an  annual  basis  and  is  shown  as  a  current  pre-financing. 
EUR 10.5  billion  of  new  pre-financing  has  been  paid  in  2019.  The  shared  management  pre-financing  is 
stable compared to 2018 except for a decrease in the EAFRD which relates to the remaining pre-financing 
of the previous programming period. This has been cleared during the year.  

For  direct  management,  the  biggest  part  of  pre-financing  concerns  Research  (mainly  Horizon  2020, 
implemented  by  the  Commission  and  EU  executive  agencies)  and  amounts  to  EUR 7.8  billion  (2018: 
EUR 6.8  billion).  The  increase  is  a  consequence  of  the  agreements  entered  into  during  2019,  for  which 
pre-financing payments were made. 

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  IPA  (Instrument  for  Pre-Accession).  The 
increase  in  pre-financing  to  international  organisations  concerns  mainly  the  above  mentioned  external 
relations  instruments.  The  increase  in  pre-financing  to  other  entities  mainly  concerns  the  Erasmus 
program implemented by national agencies with new agreements starting in 2019. 

Guarantees received in respect of pre-financing 

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

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

At 31 December 2019 the nominal value of guarantees received in respect of pre-financing amounted to 
EUR 492  million  while  the  on-going  value  of  those  guarantees  was  EUR 406  million  (2018:  EUR 516 
million and EUR 420 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 2019, pre-financing amounts covered by the PGF totalled EUR 2.1 billion (2018: EUR 2 
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 2.2  billion  (2018:  EUR 2.1  billion).  The  assets  of  the  PGF 
also  include  financial  assets  that  are  managed  by  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 

31.12.2019 

EUR million 
31.12.2018 

3 304 

3 634 
6 937 
4 045 
2 892 

3 675 

2 843 
6 518 
4 122 
2 396 

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 7 146 million paid, it is estimated that EUR 3 247 million were unused 
at  31  December  2019.  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 1 198 million paid 
excluding amounts still in pre-financing, out of which EUR 324 million is estimated as unused). 

For rural development, EUR 54 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 2019. It 
should be noted that the actual implementation by the various instruments will be reviewed as part of the 
closure process of the programmes in the coming years. 

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. 

45 

 
 
 
 
 
2014-2020 Period: 

Annual accounts of the European Union 2019 

The  unused  amounts  at  year-end  were  estimated  at  EUR 2 044 million  for  cohesion  policy  and 
EUR 1 460 million for agriculture and rural development. 

2007-2013 Period: 

It is estimated that EUR 130 million paid in the context of rural development remains unused at the end 
of 2019. 

2.6.  EXCHANGE RECEIVABLES AND NON-EXCHANGE 

RECOVERABLES 

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

Current 
Recoverables from non-exchange transactions 
Receivables from exchange transactions 

Total 

Note 

2.6.1 
2.6.2 

2.6.1 
2.6.2 

31.12.2019 

EUR million 
31.12.2018 

2 422 
1 185 
3 607 

19 328 
1 038 
20 367 
23 974 

 397 
 19 
 416 

22 212 
2 036 
24 248 
24 664 

2.6.1.  Recoverables from non-exchange transactions 

Non-current 
Member States 

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

Total 

Note 

31.12.2019 

EUR million 
31.12.2018 

2.6.1.1 

2.6.1.1 
2.6.1.2 
2.6.1.3 

2 422 
2 422 

6 180 
11 301 
1 788 
 59 
19 328 
21 750 

 397 
 397 

10 900 
9 727 
1 511 
 74 
22 212 
22 609 

46 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.6.1.1.  Recoverables from Member States 

Annual accounts of the European Union 2019 

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) and 
other rural development instruments 
Impairment 
EAGF and rural development recoverables 
Pre-financing recovery 
VAT paid and recoverable 
Other recoverables from Member States 
Total 
Non-current 
Current 

31.12.2019 
5 478 
1 591 
 7 
 (931) 
– 
6 145 
1 722 

 879 

 (822) 
1 779 
 443 
 44 
 191 
8 602 
2 422 
6 180 

EUR million 
31.12.2018 
5 609 
1 612 
2 758 
 (991) 
 86 
9 075 
1 708 

 954 

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

The  largest  amount  included  under  non-current  relates  to  amounts  due  from  Member  States,  and  the 
large increase concerns the United Kingdom (UK) infringement case (explained below)  – in the previous 
year  this  amount,  EUR 2.1  billion,  had  been  shown  under  current.  Also  included  as  non-current,  as  in 
previous  years,  are  amounts  relating  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. 

The  above  mentioned  move  from  current  to  non-current  also  explains  the  large  decrease  in  current 
amounts  due  from  Member  States.  The  decrease  is  also  due  to  there  being  no  own  resources  to  be 
received linked to an amending budget in 2019 as compared to 2018 – see below. 

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, not yet recovered. TOR are composed 
of customs duties and sugar levies, collected by Member States on behalf of the Commission. 

The ‘A accounts’ have tended to have a level of approximately EUR 3 billion at year-end, however, in both 
2018  and  2019  the  balance  includes  additional  TOR  amounts  related  to  the  UK  infringement  case 
(explained  below)  and  other  TOR  inspection  reports.  As  late  payment  interest  of  EUR 1.2  billion  is 
applicable  (2018:  EUR 1.3  billion),  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  Commission  sent  a  letter  of  formal  notice 
(Infringement No 2018/2008) to the UK because it failed to make the correct amount of traditional own 
resources  available  to  the  EU  budget,  as  required  by  EU  law.  As  the  UK  did  not  provide  a  satisfactory 
reply, neither to the letter of formal notice nor to the reasoned opinion sent on 24 September 2018, the 
Commission  confirmed  on  6  March  2019  its  decision  to  refer the  infringement  to  the  Court  of  Justice  of 
the EU and lodged its application on 7 March 2019. The case originated in a 2017 OLAF report, that 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  with  the  methodology  used  by  the 
Commission to estimate the above losses. The ongoing Court proceedings and the information available 
to  date  are  indicative  of  a  long-term  process.  Therefore,  both  the  principal  of  EUR 2.1  billion  and  the 
estimated  late  payment  interest  of  EUR 1.1  billion  accrued  until  end  2019  (compared  to  EUR  0.7  billion 
interest accrued and recognised until end 2018) have been classified as long-term assets.  

47 

 
 
 
 
Annual accounts of the European Union 2019 

In  addition,  the  Commission  included  in  the  accounts  a  receivable  of  EUR 0.2  billion  for  established 
customs duties and late payment interest which is based on the latest available information. The amount 
of  EUR  0.7  billion  initially  recognised  in  2018  has  been  adjusted  downwards  following  new  information 
that the UK authorities provided in 2019 (see notes 2.6.2 and 3.7). 

‘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.  These  amounts  are 
generally at a similar level at each year-end, as seen above. 

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

EAGF and Rural Development recoverables 

This item primarily covers the amounts owed by Member States at 31 December 2019, as declared and 
certified by the Member States as at 15 October 2019. An estimation is made for the recoverables arising 
after this declaration and up to 31 December 2019. 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 

31.12.2019 
14 606 
(3 125) 
 (180) 
11 301 
– 
11 301 

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

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  of  having  to  pay  back  these  amounts  to  the  fined  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 11  133  million  (2018: 
EUR 9 354 million) of fines not paid at year-end, the Commission has accepted financial 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. 

increase 

in  recoverables 

The 
fine  
(EUR 1 494 million) where the company concerned covered the fine with a bank guarantee accepted by 
the  Commission.  The  remaining  increase  due  to  other  competition  fines  raised  in  the  year 
(EUR 2 597  million) was largely offset by fines which were definitively cashed in 2019 (see note 2.8.1). 

is  mainly  due  to  one  significant 

from  competition 

fines 

48 

 
 
 
 
 
 
 
2.6.1.3.  Accrued income and deferred charges 

Annual accounts of the European Union 2019 

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

31.12.2019 
1 502 
 286 
1 788 
– 
1 788 

EUR million 
31.12.2018 
1 240 
 272 
1 511 
– 
1 511 

Accrued income includes EUR 1.4 billion (2018: EUR 1.1 billion) 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 in early 2020. This 
procedure for the acceptance of Member States' annual accounts was introduced in the cohesion area for 
the programming period 2014-2020.  

2.6.2.  Receivables from exchange transactions 

Non-current 
Late payment interest 
Other receivables 

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

Total 

31.12.2019 

EUR million 
31.12.2018 

1 137 
 48 
1 185 

 269 
 (153) 
 238 
 684 
1 038 

2 223 

– 
 19 
 19 

 232 
 (143) 
 243 
1 704 
2 036 

2 055 

The  non-current  late  payment  interest  concerns  the  infringement  case  mentioned  in  note  2.6.1.1.  In 
2018 this interest had been shown under current. 

The other current receivables mainly relate to late payment interests. The decrease in 2019 is primarily 
due to the classification as non-current of the interest relating to the infringment case and the 
downwards adjustment of TOR inspection reports (see note 2.6.1.1). 

2.7.  INVENTORIES  

Scientific materials 
Other 
Total 

31.12.2019 
 47 
 21 
 68 

EUR million 
31.12.2018 
 52 
 21 
 73 

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

EUR million 
31.12.2019  31.12.2018 
12 932 
 79 
 5 
 0 
13 017 
2 377 
1 438 
1 167 
 114 
18 113 

15 519 
 91 
 7 
 0 
15 617 
1 567 
1 258 
1 208 
 97 
19 745 

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  accounts.  The  treasury  balance  at  the  end  of  2019  is  driven  by  the  following 
main elements: 

  An  amount  of  EUR 2.6  billion  of  fines,  imposed  by  the  Commission  for  breach  of  competition 
rules, definitively cashed in 2019 and not yet included in an amending budget, is included in the 
year-end treasury balance. 

 

The  treasury  balance  also  includes  not  yet  used  assigned  revenue  and  other  payment 
appropriations of EUR 9.7 billion of the 2019 budget. 

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 subsequent 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). 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

LIABILITIES 

2.9.  PENSION AND OTHER EMPLOYEE BENEFITS 

Net employee benefit scheme liability 

Pension 
Scheme of 
European 
Officials 
83 842 
N/A 
83 842 

Other 
retirement 
benefit 
schemes 
2 149 
 (94) 
2 055 

Joint Sickness 
Insurance 
Scheme 

31.12.2019  
Total 

EUR million 
31.12.2018  
Total 

12 071 
 (309) 
11 762 

98 062 
 (403) 
97 659 

80 871 
 (415) 
80 456 

Defined Benefit Obligation 
Plan assets 
Net liability 

The increase in the total employee benefits liability is primarily driven by the increase in the net liability 
of the Pension Scheme of European Officials (PSEO), the largest scheme in place. This PSEO liability has 
increased mainly because of the actuarial loss from changes in financial assumptions caused by a sharp 
decrease in the nominal discount rate. Furthermore, as the nominal discount rate is adjusted for inflation 
to obtain the real discount rate, this year the real discount rate was for the first time negative – meaning 
that any given amount is worth more today than in the future: this significantly increases the size of the 
liability  at  year-end  (see  note  2.9.3).  The  lower  discount  rate  has  had  a  similar  effect  on  the  other 
smaller schemes. 

Additionally,  the  rights  accrued  during  the  year  due  to  service  are  higher  than  the  benefits  paid  out 
during  the  year.  There  is  also  an  increase  due  to  the  annual  interest  cost  (unwinding  of  the  liability 
discounting) as well as actuarial losses from experience. 

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 9.7 %. 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  PSEO  staff  (active 
staff,  retirees,  former  active  staff  now  on  invalidity  and  dependants  of  deceased  staff)  at  31  December 
2019 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). 

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. 

51 

 
 
 
 
 
 
 
 
 
 
 
2.9.3. 

Joint Sickness Insurance Scheme 

Annual accounts of the European Union 2019 

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 
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 4.3 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 31.12.2018 
Recognised in statement of 
financial performance 
Current Service Cost 
Interest cost 
Past Service 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 31.12.2019 

Pension Scheme 
of European 
Officials  
70 017 

Other 
retirement 
benefit schemes 
1 865 

Joint Sickness 
Insurance 
Scheme 
8 990 

EUR million 
Total 

80 871 

2 824 
1 339 
– 

1 910 

– 

 84 
 30 
 (60) 

 77 

 0 

 277 
 180 
– 

3 185 
1 549 
 (60) 

 (339) 

1 648 

– 

 0 

9 339 

 220 

3 065 

12 625 

(1 587) 
83 842 

 (67) 
2 149 

 (101) 
12 071 

(1 756) 
98 062 

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

Interest cost refers to 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 what was expected 
according to the assumptions made last year for 2019 and what really occurred in 2019. 

Actuarial gains and losses from actuarial assumptions (demographic variables such as employee turnover 
and mortality and financial variables such as discount rates and expected salary increases) arise  where 
these assumptions are updated in order to reflect changes in 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. 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plan assets 

Annual accounts of the European Union 2019 

Present value as at 31.12.2018 
Net movement in plan assets 
Present value as at 31.12.2019 

Actuarial assumptions – employee benefits 

Other retirement 
benefit schemes 
 119 
 (25) 
 94 

Joint Sickness 
Insurance Scheme 
 296 
 14 
 309 

EUR million 
Total 

 415 
 (12) 
 403 

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

Pension Scheme of 
European Officials 

Joint Sickness Insurance 
Scheme 

2019 
Nominal discount rate  
Expected inflation rate  
Real discount rate 
Expected rate of salary increases 
Medical cost trend rates 
Retirement age 
2018 
Nominal discount rate  
Expected inflation rate  
Real discount rate 
Expected rate of salary increases 
Medical cost trend rates 
Retirement age 

1.1% 
1.3% 
(0.2)% 
1.8% 
N/A 

63/64/66 

1.9% 
1.4% 
0.5% 
1.9% 
N/A 

63/64/66 

1.2% 
1.3% 
(0.1)% 
1.8% 
3.0% 
63/64/66 

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

Mortality rates for 2018 and 2019 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 22 
years  as  of  December  2019  for  the  PSEO,  and  26  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. 

A  decrease  in  the  real  discount  rate,  i.e.  the  difference  between  the  nominal  discount  rate  and  the 
expected inflation rate, has been observed over the past few years but it was particularly steep in 2019. 
The decrease in the real discount rate is mainly due to the decline in the nominal discount rate, which is 
in line with the trend observed globally on the financial markets. With the expected inflation rate having 
fallen  only  slightly,  the  decline  in  the  nominal  discount  rate  was  not  counterbalanced  and  translated  to 
the  significant  decrease  in  the  real  discount  rate,  thus  becoming  negative  for  the  first  time  and 
contributing to the significant actuarial loss from financial assumptions. 

Sensitivity analyses  

The sensitivity analysis is based on simulations which change, everything else being equal, 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: 

53 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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

2019 

EUR million 

2018 

Increase 0.1%  Decrease 0.1% 

Increase 0.1%  Decrease 0.1% 

 8 

 (8) 

 12 

 (12) 

 352 

 (341) 

 253 

 (246) 

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

Defined benefit obligation 

Increase 0.1%  Decrease 0.1% 
 322 

 (311) 

Increase 0.1%  Decrease 0.1% 
 226 

 (219) 

2019 

EUR million 

2018 

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

Defined benefit obligation 

Increase 0.1%  Decrease 0.1% 
 29 

 (30) 

Increase 0.1%  Decrease 0.1% 
 25 

 (26) 

2019 

EUR million 

2018 

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

2019 

EUR million 

2018 

Defined benefit obligation 

  One year increase  One year decrease  One year increase  One year decrease 
 54 

 (363) 

 (91) 

 383 

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 

Increase 0.1%  Decrease 0.1% 
1 854 

(1 797) 

Increase 0.1%  Decrease 0.1% 
1 478 

(1 434) 

2019 

EUR million 

2018 

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

Defined benefit obligation 

Increase 0.1%  Decrease 0.1% 
(1 724) 

1 774 

Increase 0.1%  Decrease 0.1% 
(1 388) 

1 427 

2019 

EUR million 

2019 

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

2019 

EUR million 

2018 

Defined benefit obligation 

  One year increase  One year decrease  One year increase  One year decrease 
 645 

 (620) 

 (573) 

 771 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.10.  PROVISIONS 

Amount at 
31.12.2018 

Additional 
provisions 

Unused 
amounts 
reversed 

Amounts 
used 

Transfer 
between 
categories 

Change in 
estimation 

EUR million 
Amount at 
31.12.2019 

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

 270 
 100 

1 933 

1 551 
 278 
4 132 
3 281 

 439 
 4 

– 

 587 
 31 
1 061 
 871 

– 
 (8) 

– 

 (1) 
 (34) 
 (43) 
 (17) 

 (269) 
 (6) 

 (34) 

 (206) 
 (24) 
 (539) 
 (278) 

 0 
 12 

– 

 0 
 (12) 
 0 
 (362) 

– 
 1 

 233 

 7 
 (27) 
 214 
 215 

 441 
 103 

2 132 

1 938 
 211 
4 826 
3 710 

Current 

 852 

 190 

 (27) 

 (261) 

 362 

 (2) 

1 116 

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. The Agriculture amounts relate to legal actions of Member States against 
conformity clearance decisions for the EAGF. 

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 2019, this resulted in a provision of 
EUR 2 132 million, split between amounts expected to be used in 2020 (EUR 31 million) and afterwards 
(EUR 2 101 million). The increase compared to 2018 is mainly the result of the decreasing discount rate 
applied to the estimated future costs. 

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  processes  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. 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.11.  FINANCIAL LIABILITIES 

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

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

Total 

2.11.1.  Financial liabilities at amortised cost  

Borrowings for financial assistance 
Other financial liabilities 
Total 
Non-Current 
Current 

2.11.1.1.  Borrowings for financial assistance 

Note 

2.11.1 
2.11.2 

2.11.1 
2.11.2 
2.11.3 

EUR million 
31.12.2019  31.12.2018 

53 062 
 9 
53 071 

1 423 
 4 
 20 
1 446 
54 517 

53 281 
 7 
53 289 

2 602 
 15 
– 
2 617 
55 906 

Note 
2.11.1.1 
2.11.1.2 

EUR million 
31.12.2019  31.12.2018 
53 872 
2 012 
55 884 
53 281 
2 602 

52 564 
1 921 
54 485 
53 062 
1 423 

Total at 31.12.2018 
New loans 
Repayments 
Exchange differences 
Changes in carrying amount 

Total at 31.12.2019 
Non-current 
Current 

EFSM 

BOP 

MFA 

Euratom 

47 400 
– 
– 
– 
 (6) 
47 394 
46 800 
 594 

1 734 
– 
(1 500) 
– 
 (33) 
 201 
 200 
 1 

4 388 
 420 
 (52) 
– 
 (1) 
4 754 
4 112 
 643 

 254 
– 
 (40) 
– 
– 
 214 
 178 
 35 

ECSC in 
Liquidation 
 97 
– 
 (97) 
 5 
 (5) 
 0 
– 
– 

EUR million 

Total 

53 872 
 420 
(1 689) 
 5 
 (44) 
52 564 
51 290 
1 273 

Borrowings  mainly  include  debts  evidenced  by  certificates  amounting  to  EUR 52  433  million  (2018: 
EUR 53 725 million). The changes in carrying amount correspond to the change in accrued interests. 

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. 

56 

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

Annual accounts of the European Union 2019 

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

2.11.1.2.  Other financial liabilities 

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 

31.12.2019 
0% - 3.82% 
0% - 5.68% 
2.88% 
0.50% - 3.75% 
– 

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

31.12.2019 

EUR million 
31.12.2018 

1 244 
 385 
 144 
1 772 

 97 
 36 
– 
 17 
 149 
1 921 

Future amounts to be paid 

< 1 year 

1-5 years 

> 5 years 

1 331 
 314 
 115 
1 760 

 93 
 29 
 125 
 5 
 252 
2 012 

EUR million 

Total 
Liability 
1 211 
 129 
1 340 
 400 

1 741 

Land and buildings 
Other fixed assets 
Total at 31.12.2019 
Interest element 
Total future minimum lease payments at 
31.12.2019 
Total future minimum lease payments at 
31.12.2018 

 91 
 5 
 97 
 54 

 150 

 153 

 332 
 124 
 456 
 189 

 644 

 788 
– 
 788 
 157 

 946 

 654 

1 089 

1 896 

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

57 

 
 
 
 
 
 
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
2.11.2.  Financial liabilities at fair value through surplus or deficit  

Annual accounts of the European Union 2019 

31.12.2019 

31.12.2018 

EUR million 

Type of derivative 

Notional 
amount  

Fair value 

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

Guarantee on equity portfolio 

 752 
 13 
 765 
 148 
 617 

 10 
 2 
 12 
 9 
 4 

Notional 
amount  
 536 
 11 
 546 
 82 
 464 

Fair value 

 20 
 2 
 22 
 7 
 15 

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 2019 this heading relates mainly 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. 

Foreign exchange option 

As  at  31  December  2019 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 

31.12.2019 
– 
 2 

 10 

 12 

EUR million 
31.12.2018 
– 
 2 

 20 

 22 

The  EFSI  guarantee  on  the  debt  portfolio  disbursed  by  the  EIB  under  the  EFSI  Innovation  and 
Infrastructure window (IIW), as well as the External Lending Mandate (ELM) guarantee for the EIB loans 
disbursed  under  the  EIB  Resilience  Initiative  (ERI)  are  classified  as  a  financial  guarantee  liability. 
At 31 December 2019,  the  EFSI  financial  guarantee  liability  totals  EUR zero  (2018:  EUR zero),  as  the 
revenues  to  be  received  under  this  guarantee  exceed  expected  losses,  while  the  ELM  ERI  financial 
guarantee liability amounts to EUR 20 million (see note 4.1.1). 

58 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

2.12.  PAYABLES 

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 

Gross 
Amount 

Adjustments 

Net Amount 
at 31.12.2019 

Gross 
Amount 

Adjustments 

EUR million 
Net Amount 
at 31.12.2018 

 21 

8 068 

2 882 

 852 

1 562 

 (0) 

(2 437) 

 (558) 

 (45) 

 (180) 

 21 

5 631 

2 325 

 807 

1 381 

 247 

– 

10 761 

(1 724) 

5 195 

 632 

1 461 

 (496) 

 (75) 

 (179) 

 247 

9 037 

4 699 

 557 

1 282 

13 384 

(3 220) 

10 165 

18 296 

(2 475) 

15 821 

16 255 

 539 

 283 

N/A 

N/A 

N/A 

N/A 

16 255 

14 772 

– 

 539 

 283 

 769 

 570 

 294 

N/A 

N/A 

N/A 

N/A 

14 772 

 769 

 570 

 294 

30 462 

(3 220) 

27 241 

34 701 

(2 475) 

32 227 

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. 

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 2019 totalled EUR 7.6 billion. A part of this amount (EUR 2 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 
be paid at year-end (EUR 0.5 billion). 

Payables  concerning  cohesion  policy  (ERDF,  CF,  ESF)  have  decreased.  The  claims  related  to  the  period 
2007-2013  have  further  decreased  to  EUR 1.9  billion  (2018:  EUR 3.5  billion),  as  the  Commission  has 
validated  and  paid  the  final  cost  claims  submitted  by  the  Member  States  for  this  period.  At  the  same 
time,  claims  related  to  period  2014-2020  decreased  to  EUR 5.8  billion  (2018:  EUR 10  billion)  as  fewer 
cost claims were received for payment at 31 December compared to last year. The implementation of the 
programmes is however progressing (see ERDF, CF expenses note 3.9) as evidenced by the fact that the 
overall liabilities for ERDF, CF are stable – see increase in accrued charges note 2.13. 

The increase in EAGF payables relates to the repartition of the total EAGF liabilities between payables and 
accrued  charges.  The  total  EAGF  liabilities  remain  stable  at  EUR 44  448  million  against  EUR 44  159 
million last year. However, in 2019 the amounts already claimed by the Member States at the end of the 
year (accounted for as payable) are higher than in 2018. 

Requests for pre-financing 

In addition to the above amounts, at the end of 2019, 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. 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Own Resources Payables 

Own resources payables refer to Member States EU budget contributions to be reimbursed at year-end. 
Amending  budgets  are  implemented  according  to  Article  10(3)  of  Regulation  no  609/2014.  The  amount 
on  31  December  2018  was  due  to  the  adoption  of  the  amending  budget  No  6/2018  adopted  on  12 
December  2018.  According  to  this  legal  provision,  the  resulting  amounts  were  returned  to  the  Member 
States on the first working day of January 2019. This year there was no similar amending budget, thus 
no such payables. 

2.13.  ACCRUED CHARGES AND DEFERRED INCOME 

Accrued charges 
Deferred income 
Other 
Total 

The split of accrued charges is as follows: 

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

31.12.2019 
66 860 
 251 
 116 
67 227 

31.12.2019 
28 193 
18 583 
9 525 
3 016 
7 542 
66 860 

EUR million 
31.12.2018 
62 877 
 96 
 213 
63 186 

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

Accrued charges refer to recognised expenses for which the Commission has still to receive cost claims. 
For  cohesion  policy,  the increase  for  ERDF  &  CF  accrued  charges  (as  the  programmes  are  being  further 
implemented)  offsets  the  decrease  in  payables,  thus  resulting  in  a  stable  amount  of  the  overall  liability 
towards the Member States (EUR 15 156 million, compared to EUR 14 900 million in the previous year). 
For  ESF,  the  total  liability  has  decreased  to  EUR 5  341  million  (2018:  EUR 7  020  million)  following  the 
trend in the ESF expenses. For the decrease in EAGF see note 2.12 above. 

60 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Note 
2.14.1 
2.14.2 
2.14.3 

31.12.2019 
 391 
2 870 
1 776 
5 037 

EUR million 
31.12.2018 
 231 
2 849 
1 881 
4 961 

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 

31.12.2019 
 200 
 (40) 
 160 

EUR million 
31.12.2018 
 (70) 
 23 
 (47) 

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 1 461 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 
i.L. 

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2.15.  AMOUNTS TO BE CALLED FROM MEMBER STATES 

Amounts to be called from Member States at 31.12.2018 
Return of 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 31.12.2019 

EUR million 

66 424 
1 803 
 21 
14 164 
 (56) 
(4 796) 
77 560 

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. 

62 

 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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  operational  revenue.  GNI  (gross  national 
income) revenue amounts to EUR 108 820 million for 2019 (2018: EUR 105 780 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 size of 
adjustments for the past (mostly years 2012 to 2017). Every year, the GNI bases are updated with real 
data and the contributions of Member States to the EU budget are recalculated in line with their updated 
economic  performance.  This  procedure is  key  to  ensuring  a  level  playing  field among  Member  States  in 
terms of their annual contributions. 

3.2.  TRADITIONAL OWN RESOURCES 

Customs duties 
Sugar levies 
Total 

2019 
21 235 
 0 
21 235 

EUR million 
2018 
22 763 
 4 
22 767 

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 decrease in customs duties largely refers to the absence of the infringement case revenue 
recognised in 2018. (see note 2.6.1.1). 

3.3.  VAT RESOURCES 

The VAT resource 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. 

REVENUE FROM NON-EXCHANGE TRANSACTIONS: 
TRANSFERS 

3.4.  FINES 

Revenue of EUR 4 291 million (2018: EUR 6 740 million) relates to fines the Commission has imposed on 
companies  for  breaches  of  EU  competition  rules  and  fines  the  Commission  has  imposed  on  Member 
States  for  infringements  of  EU  law.  The  Commission  recognises  revenue  from  fines  when  it  adopts  the 
decision to impose a fine and it officially notifies the addressee. The amounts relate mainly to competition 
fines (EUR 4 091 million). The biggest cases concern breaches of EU antitrust rules, i.e. a fine imposed on 
Google for abusive practices in online advertising (EUR 1 494 million), fines imposed on five banks in two 
Forex  cases  for  participating  in  foreign  exchange  spot  trading  cartels  (in  total  EUR 1  068  million)  and  a 

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Annual accounts of the European Union 2019 

fine  imposed  on  Mastercard  for  obstructing  merchants'  access  to  cross-border  card  payment  services 
(EUR 570 million). 

3.5.  RECOVERY OF EXPENSES 

Shared management 
Direct management 
Indirect management 
Total 

2019 
2 547 
 65 
 16 
2 627 

EUR million 
2018 
2 116 
 65 
 34 
2 215 

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, 
issued  so  as  to  recover  expenditure  previously  paid  out  from  the  EU  budget.  Recoveries  are  based  on 
controls,  audits  or  eligibility  analysis  and  therefore,  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 year-end, 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 1.4 billion (2018: EUR 1.1 
billion) 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  in 
early  2020.  This  procedure  for  the  acceptance  of  Member  States'  annual  accounts  in  the  cohesion  area 
started with the programming period 2014-2020. 

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Annual accounts of the European Union 2019 

3.6.  OTHER REVENUE FROM NON-EXCHANGE 

TRANSACTIONS 

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

2019 
1 485 
1 299 
 331 
 60 
 41 
 2 
(1 719) 
 574 
2 072 

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

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

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 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 the positive effect from taking in the budget 
surplus  from  the  previous  year  of  EUR 1  803  million  (2018:  EUR 555  million)  was  overcompensated  by 
GNI/VAT adjustments of EUR 3 443 million (2018: EUR 1 292 million). 

Other  revenue  from  non-exchange  transactions  includes  EUR 151  million  of  Member  State  contributions 
to Fusion for Energy, the European Joint Undertdaking for ITER and the Development of Fusion Energy. 

REVENUE FROM EXCHANGE TRANSACTIONS 

3.7.  FINANCIAL REVENUE 

Interest on: 
     Late payments 
     Loans 
     Other  
Premium on financial guarantee liability 
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 

2019 

 133 
1 180 
 70 
 193 
 29 

 125 

 82 
 4 
1 817 

EUR million 
2018 

1 458 
1 265 
 68 
 121 
 103 

 29 

 23 
 48 
3 115 

The late payment interest of 2018 included a large initial interest revenue on late payments in relation to 
the  UK  infringement  case  and  the  TOR  inspection  reports  (see  note  2.6.1.1).  This  year  additional 
revenue  has  been  recognised  for  the  infringement  case  as  well  as  a  downwards  adjustment  of  interest 
concerning TOR inspection reports (see note 2.6.1.1). 

65 

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

Annual accounts of the European Union 2019 

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 

2019 
 592 
 347 
 43 
 53 
 31 
 5 
 227 
1 298 

EUR million 
2018 
 602 
 329 
 54 
 37 
 33 
 27 
 297 
1 379 

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

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 

2019 
43 951 

13 541 

35 178 
11 218 
2 608 

EUR million 
2018 
43 527 

13 149 

30 230 
11 935 
2 826 

106 495 

101 666 

The increase mainly concerns cohesion policy (ERDF, CF) where almost all expenses relate to the current 
programming period, where the work continues to advance. 

Other  expenses  mainly  include:  Asylum  and  Migration  (EUR  0.6  billion),  Fund  for  European  Aid  to  the 
Most  Deprived  (EUR  0.5  billion),  Internal  Security  (EUR  0.4  billion),  European  Union  Solidarity  Fund 
(EUR 0.4 billion) and European Maritime and Fisheries Fund (EUR 0.7 billion). The decrease compared to 
last year mainly relates to the European Union Solidarity Fund. 

3.10.   DIRECT MANAGEMENT 

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

2019 
8 435 
10 095 
 412 
18 942 

EUR million 
2018 
8 120 
8 964 
 468 
17 551 

These  amounts  mainly  concern  the  implementation  of  Research  Policy  (EUR 7.7  billion),  Connecting 
Europe  Facilty  (CEF)  -  transport  part  (EUR 3.1  billion),  Development  Co-operation  Instrument  (EUR 1.4 
billion), European Neighbourhood Policy (EUR 1.1 billion). 

66 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

The  increase  in  direct  management  expenses  implemented  by  EU  Executive  agencies  refers  mainly 
(EUR 0.8 billion) to the Innovation and Networks Executive Agency (INEA) out of which the biggest part 
relates  to  the  transport  part  of  the  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. 

3.11.  INDIRECT MANAGEMENT 

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

2019 
3 131 
 637 
3 448 
2 875 
10 091 

EUR million 
2018 
3 396 
 679 
3 337 
3 569 
10 981 

In  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 5.8 billion 
is related to increasing Europe's competitiveness (in areas such as research, satellite navigation systems 
and  education).  The  decrease  in  expenses  implemented  by  other  entities  mainly  relates  to  education 
(Erasmus). 

3.12.  STAFF AND PENSION COSTS 

Staff costs 
Pension costs 
Total 

2019 
6 692 
4 674 
11 366 

EUR million 
2018 
6 454 
4 476 
10 929 

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.  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 

2019 

1 174 
 23 
 105 

 57 

 70 
 19 
 7 
 36 
1 491 

EUR million 
2018 

1 260 
 26 
 126 

 95 

 73 
 25 
 21 
 50 
1 677 

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

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

3.14.  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 

2019 
2 540 
1 630 
1 294 
 343 
 442 
 91 
 769 
7 109 

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

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

Research costs 
Non-capitalised development costs 
Total 

2019 
 398 
 119 
 517 

EUR million 
2018 
 385 
 106 
 491 

68 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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

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 

Finance costs 

Other expenses 

Total expenses 

Economic result of the year 

Smart and 
inclusive growth 
– 

Sustainable 
growth 
– 

Security and 
citizenship 
– 

Global 
Europe 
– 

– 

– 

– 

1 520 

1 202 

2 722 

 423 

 155 

 578 

3 300 

– 

– 

– 

1 076 

 29 

1 104 

 1 

 (12) 

 (11) 

1 093 

– 

– 

(43 951) 

(13 541) 

(35 178) 

(11 218) 

 (512) 

(12 763) 

(2 799) 

 (526) 

(2 037) 

(1 637) 

 (113) 

(2 287) 

– 

– 

 (668) 

 (676) 

 (62) 

 (2) 

 (1) 

 (350) 

 (56) 

 (493) 

– 

– 

– 

 10 

 43 

 54 

 0 

 (5) 

 (5) 

 49 

– 

– 

– 

– 

– 

– 

– 

 22 

 214 

 235 

 11 

 13 

 24 

 260 

– 

– 

– 

– 

(1 382) 

(1 060) 

 (927) 

 (242) 

 (1) 

 (444) 

 (0) 

 (46) 

(4 446) 

 (32) 

(3 314) 

 (839) 

 (604) 

 (9) 

 (137) 

 (136) 

Administration 

– 

– 

– 

– 

 0 

5 176 

5 176 

 0 

 283 

 283 

5 459 

– 

– 

– 

– 

– 

 (19) 

– 

 (0) 

 (0) 

(7 222) 

 (104) 

(3 640) 

Not assigned to 
MFF heading* 
108 820 

21 235 

18 128 

4 291 

 0 

(4 592) 

EUR million 
Total 

108 820 

21 235 

18 128 

4 291 

2 627 

2 072 

147 882 

157 174 

1 383 

 864 

2 247 

1 817 

1 298 

3 116 

150 129 

160 289 

– 

– 

– 

– 

 (0) 

 23 

 689 

– 

 3 

(43 951) 

(13 541) 

(35 178) 

(11 218) 

(2 608) 

(18 942) 

(3 131) 

(4 085) 

(2 875) 

(1 110) 

(11 366) 

(1 209) 

 (415) 

(1 491) 

(7 109) 

(69 070) 

(65 770) 

(59 800) 

(58 707) 

(4 194) 

(9 427) 

(10 985) 

(2 018)  (155 493) 

(4 145) 

(9 167) 

(5 526) 

148 111 

4 796 

* 

‘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. 

69 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

EIB external lending mandate 
guarantees 
EFSI guarantee 
EFSD guarantee 
Total 

EUR million 

31.12.2019 

31.12.2018 

Ceiling 

Signed  Disbursed 

Ceiling 

Signed  Disbursed 

37 929 

31 521 

20 014 

40 417 

30 889 

20 510 

25 797 
 50 
63 775 

21 889 
– 
53 410 

17 634 
– 
37 648 

25 898 
– 
66 315 

19 842 
– 
50 731 

15 764 
– 
36 273 

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  or  other  financial  institutions.  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 
(EUR 15 762 million). The ceiling represents the total guarantee that the EU budget, and thus its Member 
States,  have  committed  to  cover,  since  in  order  to  disclose  the  maximum  exposure  faced  by  the  EU  at 
31 December  2019,  one  must  also  include  operations  authorised  to  be  signed  but  not  yet  signed 
(EUR 10 365 million).  The  amounts  are  presented  net  of  financial  provisions  or  financial  liabilities 
recognised for those programmes. 

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 2019  the  amount  of  loans  outstanding  and  covered  by  the  EU  guarantee 
totalled EUR 20 014 million (2018: 20 510 million). The EU budget guarantees: 

 

 

EUR 19 074 million (2018: EUR 19 360 million) via the Guarantee Fund for external actions (see 
note 2.4.1), and 

EUR 940 million  (2018:  EUR 1 150 million)  directly  for  loans  granted  to  Member  States  before 
accession. 

In  addition  to  the  EUR 20  014  million  disclosed  above  as  disbursed,  the  EU  guarantees  a  further 
EUR 161 million of outstanding loans to Syria for which provisions have been  made, and EUR 20 million 
recognised as financial guarantee liability for the EIB Economic Resilience Initiative (ERI) Private Mandate 
(see below). 

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  made  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. 

According  to  Decision  (EU)  2018/412,  up  to  EUR 2.3  billion  shall  be  allocated  to  the  new  private  sector 
lending  mandate  for  projects  directed  to  the  long  term  economic  resilience  of  refugees,  migrants,  host 
and  transit  communities  under  the  EIB  ERI.  The  EIB  has  disbursed  the  first  ERI  Private  Mandate 
operations in 2019. The Union budget is remunerated for the risk taken in relation to guarantees granted 

70 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

for  EIB  finacing  operations  under  the  ERI  Private  Mandate,  hence  the  ERI  Private  Mandate  guarantee is 
accounted for as a financial guarantee liability (see note 2.11.3). 

EU guarantee payments are made by the Guarantee Fund for external actions – see note 2.4.1. During 
2019, EUR 55 million of guarantee calls have been paid out from the Guarantee Fund for external actions 
(2018: EUR 56 million). 

European Fund for Strategic Investments (EFSI) guarantee 

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.  The  EU budget provides  a guarantee  of  up  to  EUR 26 billion 
('EFSI EU guarantee') under an agreement between the EU and the EIB, hereinafter referred to as 'EFSI 
Agreement',  in  order  to  protect  the  EIB  from  potential  losses  it  may  suffer  from  its  financing  and 
investment operations. 

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  finance  the 
operations  (debt  and  equity  investments)  and,  to  do  this,  borrow  the  necessary  funds  on  the  capital 
markets.  The  EIB  Group  takes  the  investment  decisions  independently  and  manages  the  operations  in 
accordance  with  its  rules  and  procedures.  The  EU  provides  the  guarantee  for  those  operations,  and 
covers losses incurred by the EIB up to the ceiling of this guarantee. 

In  order  to  ensure  that  investments  made  under  EFSI  remain  focused  on  the  specific  objective  of 
addressing market failures and that they are eligible for the protection of the EU guarantee, a dedicated 
governance structure has been put in place, including an Investment Committee of independent experts 
which  examines  each  project  proposed  by  the  EIB  under  the  IIW  regarding  its  eligibility  for  the  EU 
guarantee coverage and EFSI Steering Board ensuring an oversight over the programme. 

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 accounted for as a financial guarantee liability 
in respect of the IIW debt portfolio (see note 2.11.3), 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  (see  note  2.4.2).  In  addition,  a  contingent  liability  related  to  the  EFSI  guarantee  given  is 
disclosed  in  this  note.  The  EFSI  contingent  liability  includes  operations  of  the  COSME,  H2020,  CCS  LGF 
and EaSI programmes for the part covered by the EFSI EU guarantee under SMEW debt portfolio, and is 
presented  net  of  EUR 74  million  of  financial  provisions  recognised  for  this  portfolio,  as  included  under 
the heading financial provisions in the note 2.10. 

EU  guarantee  payments,  not  covered  by  the  EU  revenues  standing  in  credit  on  the  EFSI  settlement 
account at the EIB, are made by the EFSI Guarantee Fund – see note 2.4.1. During 2019 no guarantee 
calls have been paid out from the EFSI Guarantee Fund (2018: EUR 61 million). 

European Fund for Sustainable Development (EFSD) 

The  European  Fund  for  Sustainable  Development,  established  by  the  EFSD  Regulation,  is  an  initiative 
aiming to support investments in Africa and the European Neighbourhood as a means to contribute to the 
achievement  of  the  sustainable  development  and  to  address  specific  socioeconomic  root  causes  of 
migration.  Under  the  EFSD  Regulation,  the  EU  should  make  available  guarantees  of  EUR 1.5  billion 
(further increased by external contributions) to implementing partners for their investment and financing 
operations,  in  order  to  reduce  their  investment  risks.  The  EFSD  Guarantee  is  backed  by  the  EFSD 
Guarantee Fund (see note 2.4.1). As at 31 December 2019, one EFSD guarantee agreement ’Framework 
to Scale Up Renewable Energy Investments‘, was effective, but no underlying financing operations were 
signed by the implementing partner, EBRD. 

71 

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

Annual accounts of the European Union 2019 

EFSM 
BOP 
MFA 
Euratom 
Total 

Drawn 
47 394 
 201 
4 754 
 214 
52 564 

31.12.2019 
Undrawn 
– 
– 
 560 
 200 
 760 

Total 
47 394 
 201 
5 314 
 414 
53 324 

Drawn 
47 400 
1 734 
4 388 
 254 
53 775 

31.12.2018 
Undrawn 
– 
– 
 980 
 200 
1 180 

EUR million 

Total 
47 400 
1 734 
5 368 
 454 
54 955 

The  EU  budget  guarantees  the  borrowings  of  the  Commission  taken  to  finance  lending  to  Member  and 
non-Member  States  in  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 
2014/609, 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 guarantors not provide for them. 

4.1.3.  Guarantees given for EU financial instruments 

Horizon 2020 
Risk Sharing Finance Facility 
Connecting Europe Facility 
Other 
Total 

31.12.2019 
1 584 
 110 
 684 
 38 
2 416 

EUR million 
31.12.2018 
1 467 
 642 
 579 
 29 
2 717 

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 practice, 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 and 
financial liabilities recognised for these instruments – see notes 2.10 and 2.11.2. 

4.1.4. 

Legal cases 

Fines 
Agriculture 
Cohesion 
Other 
Total 

31.12.2019 
3 128 
 199 
 341 
2 137 
5 805 

EUR million 
31.12.2018 
3 187 
 653 
 26 
1 867 
5 732 

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fines 

Annual accounts of the European Union 2019 

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  whether  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 the cases relating to fines imposed, the amounts that have been provisionally 
received  will  be  returned  to  the  companies  without  budgetary  impact.  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 and rural development 
conformity decisions 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.  The  increase  comes 
from two cases concerning eligible expenses and Member States accounts. 

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 2019 (as in 2018) mainly concerns a damages claim against 
the  Commission  for  a  merger  prohibition  decision,  where,  in  the  absence  of  a  reliable  estimate,  the 
amount  disclosed  relates  to  the  claimed  amount.  The  increase  in  2019  relates  to  damages  claims 
concerning a Commission delegated regulation, annuled by the General Court. 

4.2.  CONTINGENT ASSETS 

Guarantees received: 
     Performance guarantees 
     Other guarantees 
Other contingent assets 
Total 

31.12.2019 

EUR million 
31.12.2018 

 349 
 16 
 65 
 430 

 321 
 19 
 25 
 366 

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

73 

 
  
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 2019. 

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  2013/1306  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  2013/1303) 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  until  the  reporting  date  –  see  note  5.1  below.  Once  the  payments 
relating to the RAL are made, 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 2019 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 

EUR million 
31.12.2019  31.12.2018 
235 836 

249 686 

72 832 

143 883 

13 941 
336 459 

18 126 
397 845 

74 

 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

5.1.  OUTSTANDING BUDGETARY COMMITMENTS NOT YET 

EXPENSED 

Outstanding budgetary commitments not yet expensed 

31.12.2019 
249 686 

EUR million 
31.12.2018 
235 836 

The  amount  disclosed  above  is  the  budgetary  RAL  (‘Reste  à  Liquider’)  of  EUR 297 693 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 2019 totalled EUR 51 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 
relevant  contractual  obligations  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 
according to 
latest 
Commission 
Decision (B) 

EUR million 

Budget 
commitments 
including 
decommitments 
(C) 

Legal 
commitments 
pending 
implementation 
(B-C) 

262 585 

262 407 

220 447 

92 912 

92 751 

78 841 

– 

– 

– 

3 814 

3 813 

3 235 

41 960 

13 910 

– 

 578 

359 310 

358 971 

302 524 

56 448 

100 079 

100 079 

85 404 

14 675 

5 749 

5 687 

4 828 

 859 

105 829 

105 766 

90 232 

15 534 

4 575 
3 159 

7 733 

4 482 
3 095 

7 577 

4 032 
2 695 

6 727 

 450 
 401 

 851 

Total 

472 872 

472 315 

399 483 

72 832 

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 constitutes 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: 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

‘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.’ 

The  table  above  provides an  overview  of  the  legal  and  budgetary  commitments  related  to  the  headings 
1B,  2  and  3  of  the  MFF  2014-2020.  The  table  starts  by  disclosing  the  total  MFF  amounts  voted  for  the 
period  (column  A).  Column  B  shows  the  legal  commitments  concluded  by  the  EU  at  year-end,  some  of 
which  are  not  yet  covered  by  budgetary  commitments.  Column  C  contains  the  budgetary  commitments 
already  made  to  cover  the  above  mentioned  legal  commitments.  The  difference  between  these  two 
columns  represents  the  outstanding  amounts  that  the  EU  will  commit  budgetarily  and  then  pay  after 
31 December 2019. As the end of the MFF period approaches, the difference between legal commitments 
and  budgetary  commitments  reduces  significantly  (EUR 72.8  billion  compared  to  EUR 143.8 billion  in 
2018). 

5.3.  SIGNIFICANT LEGAL COMMITMENTS IN OTHER AREAS 

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

31.12.2019 
7 680 
1 676 
 601 
 438 
 223 
2 535 
 788 
13 941 

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

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  2013/1316  of  the  EP  and  of  the  Council  of  11 December  2013  establishing  the 
Connecting  Europe  Facility,  amending  Regulation  (EU)  No  2010/913  and  repealing  Regulations  (EC)  No 
2007/680 and (EC) No 2010/67 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) 2014/377 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 2014/377 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 

76 

 
 
 
 
Annual accounts of the European Union 2019 

basis  of  Council  decision  (Euratom)  2013/791  of  13 December 2013  amending  decision  (Euratom) 
2007/198  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. 

Galileo 

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)  2013/1285  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) 2013/1285 authorises the use of annual instalments. 

Fisheries agreements 

These  represent  commitments  entered  into  with  third  countries  for  operations  under  international 
fisheries agreements up to 2025. The commitments made are based on Council decisions for each third 
country  (e.g.  Agreement  between  the  EU  and  the  Kingdom  of  Morocco,  the  Implementation  Protocol 
thereto  and  the  Exchange  of  Letters  accompanying  the  Agreement;  OJ  L  77,  20.3.2019)  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: 

Buildings 
IT materials and other equipment 
Total 

Minimum lease payments 

< 1 year 
 429 
 10 
 439 

1- 5 years 
 981 
 26 
1 008 

> 5 years 
1 079 
 9 
1 088 

EUR million 

Total 
2 490 
 45 
2 535 

In March 2019, in the context of the United Kingdom’s notification of its intention to withdraw from the 
EU,  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 2004/726, the seat of the European Medicines Agency 
(EMA) was relocated from London to Amsterdam. On 2 July 2019, the Agency reached an agreement with 
its  landlord  and  since  then  has  sublet  its  premises  to  a  subtenant  under  conditions  that  are  consistent 
with  the  ones  of  the  headlease,  including  the  sublease  term  that  extends  until  the  expiry  of  EMA’s 
headlease in June 2039. 

The amounts disclosed in the table above include EUR 418 million still due under the headlease contract. 
An  equal  amount  of  payments  is  expected  to  be  received  by  the  subtenant  under  the  non-cancellable 
sublease. 

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 a building contract (JMO2) of the 
Commission in Luxembourg (EUR 381 million). 

77 

 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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; 

 

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 opened by the financial institution in its name but on behalf of the 
Commission  (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. 

78 

 
Measurement of financial instruments 

Annual accounts of the European Union 2019 

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  are  carried  out  by  the  EU  according  to  the  respective  Council 
Regulations, Council and EP Decisions, and, if applicable, internal guidelines. Written procedure manuals 
covering specific areas such as borrowings and loans 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  2014/609  (as  amended  by  Council  Regulation  2016/804)  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  cash  held  in  those 
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  regulate  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. 

79 

 
 
 
Annual accounts of the European Union 2019 

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 entities by applying a guaranteed return calculated on the same 
basis to the nominal amount of fines. However, the guaranteed return applied to entities fined before the 
entry into force of the new Financial Regulation in August 2018 is floored at zero. 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  imposed  by  the  Commission  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. 

Financial 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.  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  the  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  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 managed assets shall provide sufficient liquidity 
in  relation  to  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. 

80 

 
EFSD Guarantee Fund 

Annual accounts of the European Union 2019 

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  Commission  is  authorised  to  invest  the  assets  of  the 
EFSD Guarantee Fund on the financial markets following the principle of sound financial management and 
appropriate prudential rules. 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 

USD 

GBP 

31.12.2019 
SEK 

DKK 

EUR  Other 

Total 

EUR million 

 577 

 62 

 17 

 (393) 

– 

– 

 32 
 17 
 804 
 30 
 100 
 311 
 332  1 209 

– 
 62 
 319 
 398 

 9 

– 

– 
 93 
 432 
 533 

17 723 

 21 

18 407 

 529 

– 

 137 

 7 
 65 
 233 
22 751 
16 910 
1 673 
57 979  1 934 

 121 
23 974 
19 745 
62 384 

 (0) 

– 

– 

– 

 (10) 

 (2) 

 (12) 

 (1) 
 (5) 
 (5) 
 (1) 
 326  1 208 

 (0) 
 (0) 
 398 

 (1)  (27 200) 
 (1)  (27 211) 
 532 

 (33) 
(27 241) 
 (35)  (27 254) 
35 130 

30 768  1 898 

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

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

USD 

GBP 

31.12.2018 
SEK 

DKK 

EUR  Other 

Total 

EUR million 

 619 

 57 

 18 

 (475) 

– 

– 

 6 
 19 
 49 

 0 
4 109 
1 524 
 218  5 690 

– 
 99 
 290 
 407 

 7 

– 

– 
 109 
 406 
 523 

14 725 

 17 

15 443 

 491 

– 

 16 

 5 
 56 
 303 
20 026 
14 338 
1 505 
49 635  1 830 

 67 
24 664 
18 113 
58 303 

– 

– 

– 

– 

 (20) 

 (2) 

 (22) 

 (1) 
 (2) 
 (2) 
 (1) 
 216  5 689 

 (0) 
 (0) 
 407 

(32 218) 
 (0) 
 (0)  (32 238) 
 523 

(32 227) 
 (5) 
 (7)  (32 249) 
26 055 

17 397  1 824 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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

2019 
2018 

2019 
2018 

Economic result 

USD 
 (14) 
 (7) 

GBP 
 (104) 
 (512) 

DKK 
 (35) 
 (35) 

EUR million 

SEK 
 (48) 
 (47) 

Net assets 

GBP 
 (6) 
 (5) 

DKK 
 (2) 
 (2) 

EUR million 

SEK 
 (1) 
 (1) 

USD 
 (17) 
 (13) 

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

2019 
2018 

2019 
2018 

USD 
 17 
 9 

Economic result 

GBP 
 127 
 625 

DKK 
 42 
 43 

USD 
 20 
 16 

Net assets 

GBP 
 7 
 6 

DKK 
 2 
 2 

EUR million 

SEK 
 58 
 57 

EUR million 

SEK 
 1 
 1 

Borrowing and lending activities for financial assistance 

Financial assets and liabilities are currently only 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 2014/609 (as amended by Council regulation 2016/804). 
They  are  converted  into  EUR  when  they  are  needed  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 payment needs in the same currencies. Balances on these accounts are kept within their 
respective ceilings. 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fines 

Annual accounts of the European Union 2019 

All  fines  are  imposed,  paid  or  provisionally  covered  in  EUR  and  therefore  do  not  pose  any  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 
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 %). 

2019: Available for sale financial assets 

2018: Available for sale financial assets 

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

EUR million 

Effect on net assets 

 (447) 
 483 
 (348) 
 374 

Borrowing and lending activities for financial assistance 

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 charge. Accounts held with national central banks (own resources and other) may be remunerated 

83 

 
 
 
 
Annual accounts of the European Union 2019 

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

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 floored at zero for operational balances up to a specified ceiling. 

Sensitivity  to  interests  rate  changes  of  a  given  portfolio  of  money  market  instruments  and  bonds 
increases  with  its  duration.  The  duration  of  the  main  asset  portfolios  managed  by  the  Commission  is 
described below. 

Fines 

The  provisionally  cashed  fines  are  invested  in  a  portfolio  of  money  market  instruments  and  long-term 
bonds with an average portfolio duration of 2.57 years.  

Guarantee Fund for external actions 

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 2.99 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 3.07 years. 

EFSD Guarantee Fund 

The  budget  provisioned  in  the  EFSD  Guarantee  Fund  is  invested  in  a  portfolio  of  money  market 
instruments and long-term bonds with a total average portfolio duration of 2.51 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 

Loans 
Receivables and recoverables 
Financial assets at fair value 
through surplus or deficit 
Total at 31.12.2019 
Loans 
Receivables and recoverables 
Financial assets at fair value 
through surplus or deficit 
Total at 31.12.2018 

Total  Neither past 
due nor 
impaired 
52 683 
9 410 

52 684 
23 974 

 137 

 137 

76 795 
53 939 
24 664 

62 231 
53 939 
14 737 

 16 

 16 

Past due but not impaired 

EUR million 

< 1 year 

1-5 years  > 5 years 

 1 
2 726 

– 

2 727 
 0 
6 585 

– 

– 
11 543 

– 

11 543 
– 
3 209 

– 

– 
 295 

– 

 295 
– 
 134 

– 

 134 

78 620 

68 692 

6 585 

3 209 

Receivables  and  recoverables  past  due  for  less  than  1  year  include  recoverables  related  to  competition 
fines  of  EUR 1  799  million.  Receivables  and  recoverables  past  due  between  1  and  5  years  contain 
recoverables  concerning  competition  fines  of  EUR 9  212  million  and  receivables  and  recoverables  past 
due for more than 5 years contain recoverables from competition fines of EUR 257 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 

84 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

payments. In addition to these, the receivables and recoverables past due for less than 1 year and those 
past  due  between  1  and  5  years  contain  EUR 0.8  billion  receivables  and  EUR 2.1  billion  recoverables 
respectively that relate to the infringement case referred to in note 2.6.1.1. 

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

AFS*  Financial 
assets at 
FVSD** 

31.12.2019 

Loans  Receivables 
and 
recoverables 

EUR million 

Cash 

Total 

Counterparties with external 
credit rating 
Prime and high grade 
Upper medium grade 
Lower medium grade 
Non-investment grade 

8 848 
3 588 
2 298 
 264 
14 998 

Counterparties without external 
credit rating 
Group 1 
Group 2 

– 
– 
– 
14 998 

Total 

 137 
– 
– 
– 
 137 

– 
– 
– 
 137 

 32 
23 013 
24 711 
4 855 
52 610 

 73 
– 
 73 
52 683 

3 632 
1 444 
1 867 
 478 

15 452 
3 688 
 322 
 262 
7 422  19 724 

 21 
1 987 
– 
 2 
1 989 
 21 
9 410  19 745 

28 101 
31 734 
29 198 
5 858 
94 891 

2 082 
 2 
2 083 
96 974 

AFS*  Financial 
assets at 
FVSD** 

31.12.2018 

Loans  Receivables 
and 
recoverables 

EUR million 

Cash 

Total 

Counterparties with external 
credit rating 
Prime and high grade 
Upper medium grade 
Lower medium grade 
Non-investment grade 

9 019 
3 209 
1 765 
– 
13 993 

Counterparties without external 
credit rating 
Group 1 
Group 2 

– 
– 
– 
13 993 

Total 

 16 
– 
– 
– 
 16 

– 
– 
– 
 16 

 98 
23 513 
25 775 
4 488 
53 874 

 64 
 2 
 66 
53 939 

9 064 
 755 
1 456 
 200 

14 950 
2 740 
 181 
 221 
11 475  18 092 

33 146 
30 217 
29 177 
4 909 
97 449 

3 262 
 0 
3 262 

 21 
– 
 21 
14 737  18 113 

3 347 
 2 
3 349 
100 797 

*   Available for sale financial assets (excluding investments in money market funds and equity instruments). 
**  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 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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  categorised  in  non-investment  grade  relate  primarily  to 
financial  support  loans  disbursed  by  the  Commission  to  partner  countries  in  financial  difficulties.  The 
amount under receivables and recoverables relates to recoverables against certain Members States based 
on  own  resources  regulations  or  other  legal  basis.  The  amount  under  cash  relates  mainly  to  own 
resources bank accounts opened in the treasury or in the central banks of certain 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 for the implementation 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 EU budget. 

The Own Resources legislation fixes the ceiling for own resources payments at 1.20 % of Member States' 
GNI and during 2019 0.88 % was actually used to cover payment appropriations. This means that at 31 
December 2019 there existed an available margin of 0.32 % to cover these guarantees. To this end, the 
EU is entitled to call upon 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 70  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  2019  between  EUR 6  billion  and  EUR 40  billion,  and  with  an  overall  amount  of  payments 
made from Commission accounts in 2019 that exceeded EUR 158 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. 

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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  20  %  of  the  portfolio.  The  five  countries  with  the  highest  exposure  (Spain,  Italy,  Germany, 
France and Belgium) represent altogether 52 % of the investment portfolio. The weighted average credit 
rating of the portfolio is A (S&P or equivalent). 

Financial guarantees 

The risk management policy applied for the acceptance of such guarantees ensures a high credit quality 
for  the  Commission.  The  policy  includes  defining  a  maximum  credit  exposure  towards  a  particular 
financial sector entity based on its credit rating and the level of an entity’s capital as accounted for in its 
IFRS  financial  statements.  The  compliance  of  the  outstanding  guarantees  with  the  applicable  policy 
requirements is reviewed regularly. 

Guarantee Fund for external actions 

The  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 limited to investment grade, except for 
EU  Member  States  exposure.  The  weighted  average  credit  rating  of  the  portfolio  is  BBB+  (S&P  or 
equivalent). 

As the sole counterparty for all outstanding currency forwards as of 31 December 2019 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 limited to investment grade, except for 
EU  Member  States  exposure.  The  weighted  average  credit  rating  of  the  portfolio  is  BBB+  (S&P  or 
equivalent). 

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Annual accounts of the European Union 2019 

6.6.  LIQUIDITY RISK 

Maturity analysis of financial liabilities by remaining contractual maturity 

Borrowings 
Payables 
Financial guarantee liabilities 
Other 
Total at 31.12.2019 
Borrowings 
Payables 
Other 
Total at 31.12.2018 

< 1 year 
(1 273) 
(27 241) 
 (20) 
 (149) 
(28 684) 
(2 350) 
(32 227) 
 (252) 
(34 829) 

1-5 years 
(19 312) 
– 
– 
 (640) 
(19 952) 
(17 363) 

> 5 years 
(31 978) 
– 
– 
(1 132) 
(33 110) 
(34 158) 

 (648) 
(18 011) 

(1 112) 
(35 270) 

Financial instruments at fair value through surplus or deficit  

Derivative pay leg 
Derivative receive leg 
Net cash flows at 31.12.2019 
Derivative pay leg 
Derivative receive leg 
Net cash flows at 31.12.2018 

< 1 year 
 (397) 
 395 
 (2) 
 (490) 
 477 
 (14) 

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

> 5 years 
 (7) 
– 
 (7) 
 (6) 
– 
 (6) 

Borrowing and lending activities for financial assistance 

EUR million 
Total 
(52 564) 
(27 241) 
 (20) 
(1 921) 
(81 746) 
(53 872) 
(32 227) 
(2 012) 
(88 110) 

EUR million 
Total 
 (406) 
 395 
 (10) 
 (498) 
 477 
 (21) 

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  2009/431  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 2010/407 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 
revenue  equal  the  amount  of  payment  appropriations  for  the  budgetary  year.  Member  States’ 
contributions, however, are received in twelve monthly instalments throughout the year and based on the 
adopted  budget,  while  payments  are  subject  to  operational  needs.  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. Operational needs 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 

The BUFI fund where provisionally paid fines are invested is managed according to the principle that the 
assets shall have a sufficient degree of liquidity and mobilisation in relation to the relevant commitments. 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

The  portfolio  is  composed  of  mostly  highly  liquid  securities  that  can  be  sold  to  meet  short-term  cash 
outflows. In addition, the share of cash, cash equivalents and securities maturing within 1 year is 24 %. 

Guarantee Fund for external actions 

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 cash outflows. The share of cash, cash equivalents and 
securities maturing within 1 year is 11 %. 

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  short-term  cash  outflows  if  necessary.  In  addition  the  share  of 
cash, cash equivalents and securities maturing within 1 year is 23 %. 

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 liquid assets that can be sold to meet short-term cash outflows, if necessary. 
In addition the share of cash, cash equivalents and securities maturing within 1 year is 42 %. 

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 under Eastern Partnership SME 
Finance Facility programme (see note 2.11.2). Moreover, the EU guarantee on equity portfolios held by 
the  EIB  Group  led  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. 

89 

 
 
Annual accounts of the European Union 2019 

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 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. 

90 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

KEY MANAGEMENT FINANCIAL ENTITLEMENTS  

Entitlement (per employee) 

Category 1 

Category 2 

Category 3 

Category 4 

EUR 
Category 5 

Basic salary (per month) 

28 461.39 

25 780.25 - 

20 624.20 - 

22 274.14 - 

13 113.98 - 

26 811.47 

23 202.23 

23 717.84 

20 624.20 

Residential/Expatriation 
allowance  

Family allowances: 

Household (% salary) 

Dependent child 

Pre-school 

Education, or 

Education outside place of work 

Presiding judges allowance 

15% 

15% 

15% 

15% 

0-4%-16% 

2% + 191.44  2% + 191.44  2% + 191.44  2% + 191.44  2% + 191.44 

 418.31 

 102.18 

 283.82 

 567.38 

N/A 

 418.31 

 102.18 

 283.82 

 567.38 

N/A 

 418.31 

 102.18 

 283.82 

 567.38 

 651.20 

 418.31 

 102.18 

 283.82 

 567.38 

N/A 

 418.31 

 102.18 

 283.82 

 567.38 

N/A 

Representation allowance 

1 542.36 

 991.26 

 651.20 

Annual travel costs 

N/A 

N/A 

N/A 

Transfers to Member State: 

Education allowance* 

% of salary* 

Yes 

5% 

Yes 

5% 

Yes 

5% 

N/A 

N/A 

Yes 

5% 

N/A 

N/A 

Yes 

5% 

% of salary with no cc 

max 25% 

max 25% 

max 25% 

max 25% 

max 25% 

Representation expenses 

Reimbursed 

Reimbursed 

Reimbursed 

N/A 

N/A 

Taking up duty: 

Installation expenses 

56 922.77 

51 560.49 

41 248.39 

44 548.28 

- 53 622.93 

- 46 404.45 

- 47 435.67 

Reimbursed 

Family travel expenses 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Moving expenses 

Leaving office: 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Resettlement expenses 

28 461.39 

25 780.25 - 

20 624.20 - 

22 274.14 - 

26 811.47 

23 202.23 

23 717.84 

Reimbursed 

Family travel expenses 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Moving expenses 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Reimbursed 

Transition (% salary)** 

40% - 65% 

40% - 65% 

40% - 65% 

40% - 65% 

N/A 

Sickness insurance 

Covered 

Covered 

Covered 

Covered 

Covered 

Pension (% salary, before tax) 

Max 70% 

Max 70% 

Max 70% 

Max 70% 

Max 70% 

Deductions: 

Tax on salary 

Sickness insurance (% salary) 

Special levy on salary 

Pension deduction 

Number of persons at year-end 

* With correction coefficient (‘CC’) applied. 

** Paid for the first 3 years following departure. 

8% - 45% 

8% - 45% 

8% - 45% 

8% - 45% 

8% - 45% 

1.7% 

7% 

N/A 

3 

1.7% 

7% 

N/A 

8 

1.7% 

7% 

N/A 

93 

1.7% 

7% 

N/A 

28 

1.7% 

6-7% 

9.7% 

112 

91 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

8. 

EVENTS AFTER THE BALANCE SHEET DATE 

The annual accounts and related notes were prepared using the most recently available information and 
this is reflected in the information presented above. At the date of signature of these accounts two key 
material matters are disclosed below, the departure of the United Kingdom from the European Union and 
the EU reaction to the coronavirus outbreak. No further 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. 

Coronavirus disease 2019 (COVID-19) 

During the first half of 2020, the coronavirus outbreak has had huge global impacts. As a non-adjusting 
event,  the  outbreak  of  the  coronavirus  does  not  require  any  adjustments  to  the  figures  reported.  For 
subsequent reporting periods, the implementation of the immediate response initiatives proposed by the 
Commission  (including  the  reactivation  of  the  Emergency  Support  Instrument  (ESI)  and  further 
reinforcement  of  the  Union  Civil  Protection  Mechanism  (UCPM/rescEU),  the  Coronavirus  Response 
Investment  Initiative  (CRII  and  CRII+)  and  the  support  to  mitigate  Unemployment  Risks  in  an 
Emergency  (SURE)  following  the  COVID-19  outbreak)  will  affect  the  recognition,  measurement  or 
reclassification of some assets and liabilities in the financial statements:  

  Activation  of  the  Emergency  Support  Instrument  (ESI)  and  further  reinforcement  of  the  Union 

Civil Protection Mechanism (UCPM/rescEU): 

Given the depth of the crisis following the COVID-19 outbreak as well as the extent and nature of 
the  needs  requiring  support  from  the  EU  budget,  the  EU  reactivated  the  ESI  instrument.  This 
instrument,  originally  established  in  March  2016  to  address  the  emergency  situation  which  had 
arisen following the massive influx of refugees in Greece (see Council Regulation (EU) 2016/369 
of 15 March 2016), has been reactivated for a period of 3 years (2020-22) to finance expenditure 
necessary to address the COVID‐19 pandemic for the period 1 February 2020 to 31 January 2022 
(see  Council  regulation  (EU)  2020/521  of  14  April  2020).  To  further  this  objective,  the  2020 
budget was amended to include EUR 2.7 billion in commitment appropriations and EUR 1.4 billion 
in payment appropriations (see Definitive Adoption (EU, Euratom) 2020/537 of Amending budget 
No  2  of  the  European  Union  for  the  financial  year  2020  of  17  April  2020).  The  reactivation  will 
allow  the  Union  to  deploy  measures  preventing  and  mitigating  severe  consequences  in  one  or 
more Member States and to address in a coordinated manner the needs related to the COVID-19 
disaster, by complementing any assistance provided under other EU instruments. The instrument 
is  centrally  managed  by  the  Commission  and  mainly  focuses  on  direct  procurement  and  grants, 
whilst  in  certain  cases  actions  will  be  implemented  through  partners  such  as  international 
organisations. 

As  a  complementary  measure  to  the  ESI,  the  Union  Civil  Protection  Mechanism/rescEU  was 
reinforced  to  allow  wider  stock-piling  and  coordination  of  essential  resource  distribution  across 
Europe  (see  Commission  Implementing  Decision  (EU)  2019/570,  as  amended  by  Commission 
Implementing Decision 2020/414 of 19 March 2020 and Commission Implementing Decision (EU) 
2020/452 of 26 March 2020). To this purpose the 2020 budget was amended to include a further 
EUR 0.3 billion in commitment appropriations and EUR 0.2 billion in payment appropriations. The 
reinforcement of the UCPM/rescEU will support Member States in purchasing some of the needed 
equipment (including therapeutics, medical equipment, Personal Protective Equipment, laboratory 
supplies),  thus  increasing  the  volume  as  well  as  complementing  and  widening  the  scope  of 
priority items purchased through the joint procurement under the Joint Procurement Agreement, 
a  coordinated  approach  giving  Member  States  a  strong  position  when  negotiating  with  the 
industry on availability and price of medical products. The rescEU direct grants will provide 100 % 
financing  from  the  EU  budget,  which  includes  full  financing  for  development  of  these  capacities 
and full financing of deployment of equipment. The equipment purchased will be hosted by one or 
more  Member  States,  while  decision  making  is  organised  at  EU  level,  providing  emergency 
supplies  over  and  beyond  national  stocks.  It  will  be  available  to  all  Member  States  and  will  be 
used in case of insufficient national availability. 

  Coronavirus Response Investment Initiative (CRII and CRIIplus):  

CRII,  implemented  by  Regulation  2020/460  of  the  European  Parliament  and  the  Council  of  30 
March  2020,  introduced  specific  measures  to  mobilise  investments  in  the  healthcare  systems  of 
Member States and in other sectors of their economies in response to the COVID-19 outbreak by 
providing  immediate  liquidity  to  accelerate  up  to  EUR  37  billion  of  European  public  investment, 

92 

 
Annual accounts of the European Union 2019 

introducing flexibility in applying EU spending rules and extending the scope of the EU Solidarity 
Fund. CRIIplus, implemented by Regulation 2020/558 of the European Parliament and the Council 
of 23 April 2020, introduced further measures to provide exceptional flexibility for the use of the 
European Structural and Investments Funds. The 2019 balance sheet includes EUR 6.8 billion as 
current pre-financing since these amounts were originally intended to be recovered during 2020. 
However, as a consequence of the CRII, the amounts will now remain with the Member States so 
as to be used to accelerate investments related to the COVID-19 outbreak. As the CRII foresees 
the clearance or recovery of pre-financing at closure, and eligibility periods may end in 2022, this 
EUR  6.8  billion  of  current  pre-financing  will  likely  all  be  reclassified,  in  conformity  with  the 
accounting rules, to non-current in the 2020 financial statements.  

 

European  instrument  for  temporary  Support  to  mitigate  Unemployment  Risks  in  an  Emergency 
(SURE) following the COVID-19 outbreak: 

As part of its emergency support package to tackle the economic impact of the COVID-19 crisis, 
the  EU  adopted  on  19  May  2020  Council  Regulation  (EU)  2020/672  establishing  the  SURE 
instrument to help workers keep their jobs during the crisis. SURE is a temporary scheme which 
can  provide  up  to  EUR  100  billion  of  financial  assistance  (loans  under  favourable  terms)  to 
Member States. The instrument enables Member States to request EU financial assistance to help 
finance the sudden and severe increases of national public expenditure, as from 1 February 2020, 
related  to  national  short-time  work  schemes  and  similar  measures,  including  for  self-employed 
persons,  or  to  some  health-related  measures,  in  particular  at the  work  place in  response  to  the 
crisis.  To  enable  the  EU  to  provide  financial  assistance  under  SURE,  the  Commission  shall  be 
empowered to borrow on the capital markets or with financial institutions on behalf of the EU to a 
maximum  amount  of  EUR  100  billion.  SURE  loans  will  be  backed  by  the  EU  budget  and 
guarantees  provided  by  Member  States  according  to  their  share  in  the  EU's  GNI.  The  total 
amount of guarantees will be EUR 25 billion and the instrument will become active only when all 
guarantees have been provided. The instrument is limited until 31 December 2022. 

  Next Generation EU: 

Furthermore, on 27 May 2020 President von der Leyen presented a new proposal for the EU long-
term  budget (multiannual  financial  framework)  2021-2027  and  sectoral programmes  boosted  by 
‘Next  Generation  EU’13,  an  emergency  temporary  recovery  instrument,  to  help  repair  the 
immediate  economic  and  social  damage  brought  about  by  the  coronavirus  pandemic,  kickstart 
the  recovery  and  prepare  for  a  better  future  for  the  next  generation.  This  proposal  is  currently 
being  discussed  with  Member  States  and  the  European  Parliament.  Should  an  agreement  be 
reached  based  on  this  proposal,  many  EU  budget  programmes  would  be  topped-up  by  funds 
raised  through  borrowings  by  the  EU.  Given  the  size  of  the  proposed  amounts,  it  would  have  a 
significant  impact  on  the  content  of  future  EU  balance  sheets;  the  specific  impact  can  only  be 
assessed  once  the  final  proposal  has  been  approved  by  the  budget  authority  and  its 
implementation starts. 

Departure of United Kingdom from the European Union 

On 1 February 2020 the United Kingdom ceased to be a Member State of the European Union. Following 
the conclusion of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern 
Ireland  from  the  European  Union  and  the  European  Atomic  Energy  Community  (the  ‘Withdrawal 
Agreement’) between the two parties, the United Kingdom committed to pay all its obligations under the 
current MFF and previous financial perspectives following from its membership of the Union.  

At  the  date  of  signature  of  these  accounts,  and  based  on  the  Withdrawal  Agreement  concluded  and 
already in operation, there is no financial impact to be reported in these accounts. 

13 https://ec.europa.eu/info/strategy/eu-budget/eu-long-term-budget/2021-2027_en 

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Annual accounts of the European Union 2019 

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 

2. EU Agencies (39) 
2.1. Executive Agencies (6) 
Education, Audiovisual and Culture Executive 
Agency (EACEA) 
Consumers, Health, Agriculture and Food Executive 
Agency (CHAFEA) 
Research Executive Agency (REA) 

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

Executive Agency for Small and Medium-sized 
Enterprises (EASME) 
European Research Council Executive Agency 
(ERCEA) 
Innovation and Networks Executive Agency (INEA) 

European Food Safety Authority (EFSA) 
European Union Agency for Railways (RAIL) 
Community Plant Variety Office (CPVO) 
European Fisheries Control Agency (EFCA) 
European Union Intellectual Property Office (EUIPO) 
European Union Aviation Safety Agency (EASA) 
European Securities and Markets Authority (ESMA) 

2.2. Decentralised Agencies (33) 
European Maritime Safety Agency (EMSA) 
European Medicines Agency (EMA) 
European Chemicals Agency (ECHA) 
European Institute for Gender Equality (EIGE) 
European Environment Agency (EEA) 
European Banking Authority (EBA) 
European Asylum Support Office (EASO) 
European Border and Coast Guard Agency (Frontex)  European Training Foundation (ETF) 
European Union Agency for Law Enforcement 
Training (CEPOL) 
European Global Navigation Satellite Systems 
Agency (GSA) 
European Union Agency for Criminal Justice 
Cooperation (Eurojust) 
European Agency for Safety and Health at Work 
(EU-OSHA) 
European Centre for Disease Prevention and Control 
(ECDC) 
European Centre for the Development of Vocational 
Training (CEDEFOP) 
European Union Agency for the Cooperation of 
Energy Regulators (ACER) 
Agency for Support for the Body of European 
Regulators for Electronic Communications (BEREC 
Office) 
European Union Agency for Cybersecurity (ENISA) 

European Foundation for the Improvement of Living 
and Working Conditions (Eurofound) 
European Monitoring Centre for Drugs and Drug 
Addiction (EMCDDA) 
European Union Agency for Law Enforcement 
Cooperation (EUROPOL) 
European Union Agency for Fundamental Rights 
(FRA) 
European Insurance and Occupational Pensions 
Authority (EIOPA) 
Translation Centre for the Bodies of the European 
Union 
Fusion for Energy (European Joint Undertaking for 
ITER and the Development of Fusion Energy) 
European Union Agency for the Operational 
Management of Large-Scale IT Systems in the Area 
of Freedom, Security and Justice (eu-LISA) 

3. Other controlled entities (2) 
European Coal and Steel Community in Liquidation 
(ECSC i.L.) 

European Institute of Innovation and Technology 
(EIT) 

B. ASSOCIATES (1) 
European Investment Fund (EIF) 

94 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MINOR ENTITIES 

Annual accounts of the European Union 2019 

The entities listed below have not been consolidated using the equity method in the 2019 EU consolidated 
financial statements on the basis of immateriality: 

Bio Based Industries Joint Undertaking (BBI) 

BBI is a Public-Private Partnership (PPP) between the EU and the Bio-based Industries Consortium (BIC). 
The  objectives  of  the  BBI  are  to  contribute  to  a  more  resource  efficient  and  sustainable  low-carbon 
economy and to increasing economic growth and employment by developing sustainable and competitive 
bio-based industries in Europe. 

Clean Sky Joint Undertaking (Clean Sky) 

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, a partnership between the European Union and the European pharmaceutical industry, is the world’s 
biggest  public  private  partnership  in  life  sciences  and  working  to  improve  health  by  speeding  up  the 
development  of,  and  patient  access  to,  innovative  medicines,  particularly  in  areas  where  there  is  an 
unmet medical or social need. 

Electronic Components and Systems for European Leadership Joint Undertaking (ECSEL) 

ECSEL,  a  PPP  in  electronic  components  and  systems,  funds  research,  development  and  innovation 
projects  for  world-class  expertise  in  electronic  components  and  systems,  thus  contributing  to  the 
development  of  a  strong  and  globally  competitive  electronics  components  and  systems  industry  in  the 
European Union. 

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) 

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. 

95 

 
 
Annual accounts of the European Union 2019 

FINANCIAL STATEMENT DISCUSSION AND 
ANALYSIS 

FINANCIAL YEAR 2019 

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. 

96 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

CONTENTS 

1. 

CONSOLIDATED FINANCIAL STATEMENTS OF THE EU: 
FINANCIAL SITUATION 2019 ..................................................................... 98 

1.1. 

1.2. 

1.3. 

1.4. 

REVENUE .......................................................................................... 98 

EXPENSES ......................................................................................... 99 

ASSETS .......................................................................................... 100 

LIABILITIES .................................................................................... 106 

2. 

MANAGEMENT OF RISKS AND UNCERTAINTIES OF EU BUDGET 
IMPLEMENTATION ................................................................................. 107 

2.1.  MACRO-ECONOMIC ENVIRONMENT .................................................... 107 

2.2. 

2.3. 

2.4. 

BUDGETARY CONTINGENT LIABILITIES FOR FINANCIAL ASSISTANCE .... 107 

BUDGETARY GUARANTEES ................................................................ 108 

NEW ENTRANTS' RESERVE (NER) 300................................................. 109 

97 

 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 2019 

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. 

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 2019, the consolidated revenue amounted to EUR 160.3 billion, a slight decrease of EUR 2.6 billion or 
1.6 % from the previous year figure of EUR 162.9 billion, which was mainly due to an increase in GNI and 
VAT resources being overcompensated by a decrease in other revenue categories: 

  Revenue from GNI (gross  national income), the primary element of the EU’s  operating revenue, 
and  VAT  resources  increased  from  EUR 123.4  billion  in  2018  to  EUR 126.9 billion  in  2019.  The 
increase of EUR 3.5 billion or 2.8 % was primarily caused by adjustments made for past amounts 
(mainly for the years 2012 to 2017) as GNI/VAT bases were updated with real data. 

 

The  increase  in  recovery  of  expenses  from  EUR 2.2  billion  to  EUR 2.6  billion  (an  increase  of 
EUR 0.4 billion or 18.2%) further contributed to an increase in revenues. 

  At  the  same  time,  revenue  from  fines,  which  amounted  to  EUR 6.7  billion  in  2018,  fell  by 
EUR 2.4 billion  or  35.8  %  to  EUR 4.3  billion  due  to  the  lower  magnitude  of  the  amount  of  fines 
imposed. Whereas in 2018 the three biggest fines imposed amounted to EUR 5.7 billion, the three 
biggest cases in 2019 amounted to EUR 3.1 billion. 

The  above  changes  were  accompanied  by  a  decrease  in  revenue  from  traditional  own  resources,  which 
fell from EUR 22.8 billion in 2018 to EUR 21.2 billion in 2019 (a decrease of EUR 1.6 billion or 7.0%) and 
the  decrease  in  financial  revenue,  which  fell  from  EUR 3.1  billion  in  2018  to  EUR 1.8  billion  in  2019  (a 
decrease of EUR 1.3 billion or 41.9 %), due to a late payment interest revenue related to UK TOR cases 
which was recognised in 2018 (EUR 1.3 billion). 

98 

 
 
 
Annual accounts of the European Union 2019 

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  66.8 %  of  total  expenses  in  2019 
(2018: 66.3 %) – 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 2019 

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  EUR  29.0  billion  or  18.7 %  of  total 
expenses  and  remained  stable  compared  to  the  previous  financial  year  (2018:  EUR 28.5  billion  or 
19.1 %). 

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,  Members  of  the  EU 
institutions and staff (see note 2.9). 

Overall, expenses increased by 4.4 % or EUR 6.5 billion from EUR 149.0 billion to EUR 155.5 billion when 
compared  with  2018,  mainly  resulting  from  expenses  from  programmes  implemented  under  shared 
management  by  Member  States  which  rose  by  EUR 4.8  billion  or  4.7  %  from  EUR 101.7  billion  to 
EUR 106.5 billion led by implementation of programmes under ERDF & Cohesion fund as the current MFF 
advances. 

99 

 
 
 
 
Annual accounts of the European Union 2019 

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 79.6 % of the assets 
of the EU (2018: 78.8 %) 

Composition of the consolidated assets of the EU 

As at 31 December 2019 the total assets were EUR 178.9 billion, reflecting an increase of EUR 4.5 billion 
or 2.6 % over the previous year (2018: EUR 174.4 billion). The key changes were: 

 

 

 

 

an  increase  of  EUR 3.0  billion  (19.2  %)  in  available  for  sale  financial  assets  reflecting  the 
continued funding of the EFSI & EFSD guarantee funds, as well as Horizon 2020; 

an increase of EUR 1.6 billion (9.0 %) in cash and cash equivalents (see below); 

pre-financing, i.e. advances paid to beneficiaries of EU funds, remained essentially stable with a 
slight increase of EUR 1.1 billion (2.5 %); 

the  above  effects  were  partially  compensated  by  a  decrease  of  EUR 1.3  billion  (2.3  %)  in  loans 
mainly due to the repayment of BOP loans by Romania (EUR 1 billion) and Latvia (EUR 0.5 billion) 
during 2019, the effect of which was partially offset by new MFA loans. 

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 19.7 billion  at  year-end  is  made  up  of  the  following  main 
elements: 

  An amount of EUR 2.6 billion of fines imposed by the Commission for breach of competition rules, 
definitively  cashed  in  2019  and  not  yet  included  in  an  amending  budget  is  included  in  the 
year-end treasury balance. 

 

The  treasury  balance  also  includes  not  yet  used  assigned  revenue  and  other  payment 
appropriations of EUR 9.7 billion of the 2019 budget. 

100 

 
 
 
 
Pre-financing 

Annual accounts of the European Union 2019 

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  and  these  amounts  remain  available  to  the  Member  States  until  closure  of  the 
programmes.  An  annual  pre-financing  is  also  paid  out,  which  must  be  used  within  the  year  or  be 
recovered the following year as part of the annual closure of the accounts cycle. 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 44.4 billion (2018: EUR 43.4 billion), almost 
all  of  which  relates  to  Commission  activities.  Some  56 %  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  the  shared  management  mode  relates  to  ERDF  & 
Cohesion Fund (EUR 14.4 billion), which is at a similar level to 2018 (EUR 14.6 billion). 

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, debt securities or investment in money market funds or 
pooled portfolios of assets) 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  of 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 

101 

 
 
Annual accounts of the European Union 2019 

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, 
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 2019: 

Related to more than one MFF 

Assets* 

Liabilities** 

EUR million 
Contingent     
Liabilities*** 

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 

European Progress Microfinance Fund 

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 

36 

36 

166 

71 

53 

44 

17 

10 

9 

370 

406 

(40) 

(40) 

- 

- 

- 

- 

- 

- 

- 

- 

(40) 

- 

-  

- 

- 

- 

- 

- 

- 

- 

-  

- 

Assets 

Liabilities 

Contingent 
Liabilities 

Guarantee and risk-sharing instruments: 

Horizon 2020 – InnovFin Loan & Guarantee Service for R&I 

1 237 

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 

Transferability & Convertibility (T&C) Facility 

102 

936 

708 

401 

44 

37 

25 

16 

(33) 

(557) 

(4) 

(758) 

(2) 

(28) 

- 

(1) 

(1 091) 

(361) 

(684) 

(2) 

(8) 

- 

(12) 

- 

 
 
 
 
 
 
 
  
  
 
 
  
  
 
 
 
 
 
 
  
Annual accounts of the European Union 2019 

MFF 2014-2020 

(continuing from previous page) 

Student Loan Guarantee Facility 

Eastern Partnership SME Finance facilities 

Natural Capital Financing Facility 

Other Guarantee and risk-sharing instruments 

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 

Other Equity instruments 

Mixed instruments: 
Employment and Social Innovation (EaSI) Guarantee Facility and 
Capacity Building 

EU Deep and Comprehensive Free Trade Area facilities 

Facility for Energy Inclusion 

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 

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 

Marguerite Fund 

European Technology Start up Facility 1998 (ETF) 

Mixed instruments: 

European Neighbourhood and Partnership Instrument (ENPI) 

Instrument of economic and financial cooperation MEDA 

Assets 

Liabilities 

Contingent 
Liabilities 

14 

13 

11 

8 

(1) 

(4) 

(0) 

(1) 

- 

(2) 

(7) 

(6) 

3 451 

(1 387) 

(2 175) 

515 

86 

24 

15 

12 

11 

16 

679 

81 

62 

37 

30 

21 

(17) 

(2) 

- 

- 

- 

- 

(1) 

(20) 

(72) 

(24) 

(3) 

- 

- 

232 

4 362 

(98) 

(1 505) 

Assets 

Liabilities 

609 

71 

32 

4 

716 

448 

196 

105 

79 

54 

3 

885 

124 

119 

243 

(58) 

(140) 

(31) 

(4) 

(233) 

(4) 

- 

- 

(4) 

- 

(0) 

(8) 

(2) 

(2) 

(4) 

(131) 

- 

- 

- 

- 

- 

- 

(131) 

- 

- 

- 

- 

- 

- 

(2 306) 

Contingent 
Liabilities 

(110) 

- 

- 

- 

(110) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total  

Overall Total 

1 844 

(244) 

(110) 

6 612 

(1 790) 

(2 416) 

* 

The assets presented in this table include several items of the financial statements (Available for sale financial assets of 
EUR 5 028 million; Cash and cash equivalents of EUR 1 485 million; Loans of EUR 73 million and other items of EUR 24 million). 
**  The liabilities presented in this table include several items of the financial statements (Provisions of EUR 1 702 million; Payables of 

EUR 75 million and other items in the amount of EUR 12 million). 

*** For certain guarantees the risk taken by the EU is fully covered by the provisions made.  

103 

 
 
 
 
  
 
 
  
  
 
 
  
  
 
 
 
 
 
 
  
  
 
 
  
  
 
 
  
  
 
 
 
 
 
 
Financial assets held in guarantee funds for budgetary guarantees 

Annual accounts of the European Union 2019 

The Commission has set up guarantee funds to cover budgetary guarantees given to the EIB group and 
other  financial  institutions  (see  note  4.1.1  of  the  consolidated  financial  statements).  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 
term  deposits. 
instruments 
At 31 December 2019, the Commission holds financial assets in the: 

securities,  money  market 

including  debt 

cash  and 

funds, 

  Guarantee Fund for external actions of EUR 2.6 billion; 

 

 

EFSI Guarantee Fund of EUR 6.7 billion; and 

EFSD Guarantee Fund of EUR 0.6 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 2019, the nominal amount of the loans granted for financial assistance under the EFSM 
and BOP were: 

BOP 

Romania 
5.0** 

5.0 

(5.0) 

Latvia 

3.1 

2.9 

(2.7) 

EFSM* 

EUR billion 

TOTAL 

Total 

Ireland 

Portugal 

Total 

8.1 

7.9 

(7.7) 

22.5 

22.5 

- 

26.0 

24.3 

- 

48.5 

46.8 

- 

56.6 

54.7 

(7.7) 

0.2 

0 

0.2 

22.5 

24.3 

46.8 

47.0 

Total granted 

Total disbursed at 31.12.2019 

Total repaid at 31.12.2019 
Outstanding amount at 
31.12.2019 

*   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. 

The main points of the EFSM programme are as follows: 

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. 

In 2019, no repayments of principal were scheduled. All requested interests payments were fully 
made on time. 

104 

 
 
 
 
 
 
 
 
 
Portugal 

Annual accounts of the European Union 2019 

 

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. 

  As  in  the  case  of  Ireland,  there  were  no  scheduled  repayments  of  principal  in  2019  and  all  the 

interests payments have been fully made on time. 

 

Portugal has formally requested that the EU waives its rights under the ’mandatory prepayment 
clause‘ of the EFSM Loan Facility Agreement, to allow Portugal to repay in advance an amount of 
EUR 2 billion to the European Financial Stability Facility (EFSF). An early repayment to the EFSF 
triggers  a  mandatory  proportionate  repayment  of  EFSM  loans.  A  Commission  Decision  has 
authorised the waiver subject to some specific conditions. 

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 main points are as follows: 

  During 2019, the beneficiary Member States of BOP have reimbursed on time and in  full a total 
amount  of  EUR 1.5  billion  out  of  which  EUR 1.0  billion  related  to  a  capital  reimbursement  from 
Romania and EUR 0.5 billion capital reimbursement from Latvia. In addition, both Member States 
paid the amount of interest due in 2019 on time. 

 

The outstanding amount at end 2019 is EUR 0.2 billion relating only to Latvia and scheduled for 
repayment in 2025. Romania has repaid all principal and interest so its BOP financial assistance 
programme can be closed. 

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. 

As at 31 December  2019,  the  total  outstanding  loan  volume  under  the  MFA  loan  programme  (nominal 
value) thus stood at EUR 4.7 billion. 

Ukraine 

Tunisia 

Jordan 

Others 

Total 

MFA 

Total granted 

Total disbursed at 31.12.2019 

Total repaid at 31.12.2019 

Outstanding amount at 31.12.2019 

3.8 

3.3 

0.0 

3.3 

0.8 

0.8 

0.0 

0.8 

0.4 

0.4 

0.0 

0.4 

0.5 

0.4 

(0.2) 

0.2 

5.5 

4.9 

(0.2) 

4.7 

The main points are as follows: 

 

In 2019 new loans were disbursed for a total amount of EUR 0.4 billion, being EUR 0.3 billion to 
Tunisia, EUR 0.1 billion to Jordan and EUR 0.02 billion to Moldova. 

The  largest  loan  beneficiary  under  MFA  is  Ukraine,  which  has  been  granted  loans  to  the  amount  of 
EUR 3.3  billion,  and  another  EUR 0.5  billion  has  been  committed  under  a  loan  agreement  but  not  yet 
disbursed. All payment obligations were honoured throughout the year 2019 by Ukraine. 

105 

 
 
 
 
Annual accounts of the European Union 2019 

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 

As  at  31  December  2019  the  total  liabilities  were  EUR 251.5  billion,  an  increase  of  EUR 15.6  billion  or 
6.6 % compared to the previous year (EUR 235.9 billion). 

The key changes were related to the following effects: 

 

Pensions and other post-employee benefits increased by EUR 17.2 billion or 21.4 %. The increase 
is mainly due to the actuarial loss from financial assumptions caused by the significant decrease 
in the discount rate which became negative for the first time; 

  Borrowings  decreased  by  EUR 1.3  billion  or  2.4  %,  mainly  due  to  the  repayment  of  BOP  loans 
(EUR 1  billion  relating  to  Romania  and  EUR 0.5  billion  to  Latvia),  and  partly  offset  by  new  MFA 
loans amounting to EUR 0.4 billion; 

 

Looking  at  payables  (decrease  of  EUR 5.0  billion)  and  accrued  charges  (increase  of  EUR 4.0 
billion) together, the overall level of liabilities remains the same. As the same level of cost claims 
have not been received by year-end in the field of cohesion policy (ERDF, CF and ESF), this leads 
to  payables  being  lower;  however  accrued  charges  will  increase,  indicating  that  the 
implementation of the programmes is progressing. 

Total cost claims and invoices received and recognised under the payables heading of the balance sheet 

106 

 
 
 
Net assets 

Annual accounts of the European Union 2019 

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 

Given  the  current  global  situation  concerning  the  spread  of  the  coronavirus  disease  during  the  first 
quarter  of  2020, it is  not possible to  accurately  assess  its  undoubted  significant  negative impact  on  the 
EU macro-economic environment at the time of transmission of these accounts. 

The  macro-economic  environment  of  the  EU  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. 

Euro area and EU GDP is estimated to have grown by 1.2 % and 1.5 % in 2019, respectively. The overall 
inflation in the Euro area averaged 1.2 % in 2019, a sharp decline from the previous year’s inflation rate 
of 1.7 %, which can be linked to the fall in energy prices and the lack of pass-through from robust wage 
growth  to  core  inflation.  The  euro  area  labour  market  proved  to  be  fairly  resilient  in  2019  given  the 
background  of  relatively  moderate  economic  growth.  The  unemployment  rate  has  stayed  close  to  or  at 
7.4% towards the end of the year, which is the lowest rate recorded since May 2008. In December 2019, 
the  number  of  unemployed  persons  was  4.6%  lower  than  one  year  before  and  36.8%  below  the  April 
2013 peak. 

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  2014/609),  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 

107 

 
 
Annual accounts of the European Union 2019 

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. 

The  following  table  provides  an  overview  of  the  planned  reimbursement  schedule  in  nominal  value  for 
outstanding EFSM and BOP loan amounts at 31 December 2019: 

BOP 

EFSM 

Latvia 

Romania 

Total 

Ireland 

Portugal 

Total 

EUR billion 

TOTAL 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2031 

2032 

2033 

2035 

2036 

2038 

2042 

- 

- 

- 

- 

0.2 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Total 

0.2 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

0.2 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

0.2 

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 

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 

47.0 

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  2019,  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 and financial guarantee liabilities in 
the  financial  statements  (see  respectively  notes  2.10  and  2.11.3  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 2019, the total asset value of EUR 2.6 billion covers an exposure of amounts disbursed 
of EUR 20.2 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 total assets that make up the EFSI Guarantee Fund at 31 December 2019 
is EUR 6.7 billion and that covers an exposure of disbursed amounts of EUR 17.7 billion. 

108 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Pursuant  to  EFSD  Regulation  (Regulation  EU  2017/1601),  the  EFSD  Guarantee  of  up  to  EUR 1.5  billion 
(further  increased  by  external  contributions)  is  to  be  made  available  to  support  investments  in  partner 
countries  in  Africa  and  in  the  European  Neighbourhood.  The  EU  discloses  the  EFSD  Guarantee  in  the 
notes  to  its  consolidated  financial  statements  (see  note  4.1.1)  as  a  contingent  liability.  As  at 
31 December 2019,  one  EFSD  guarantee  agreement  was  effective,  for  a  total  cover  limit  of 
EUR 50 million,  but  no  underlying  operations  were  signed  by  the  implementing  partner.  The  EFSD 
Guarantee  Fund  has  been  established  in  order  to  cover  potential  future  guarantee  calls.  Total 
contributions received into the fund as at 31 December 2019 amount to EUR 0.6 billion. 

2.4.  NEW ENTRANTS' RESERVE (NER) 300 

The  NER  300  fund  originated  from  the  sale  of  the  Emission  Trading  Scheme  allowances  based  on 
Directive  2003/87/EC  establishing  a  system  for  greenhouse  gas  emission  allowance  trading  within  the 
Union.  The  fund  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.  Given  the  limited  role of  the 
Commission  in  the  decision-making  process  in  NER  300  programme  and  the  fact  that  the  funds  arising 
from the sale of the allowances are not due to the EU Budget, the NER 300 is excluded from the EU scope 
of consolidation (i.e. neither the revenues from the allowances nor the expenses for the projects financed 
are included in the EU accounts). 

In 2017, the Member States decided (Commission Decision (EU) 2017/2172) that the NER 300 revenues, 
which  were  not  fully  used  for  low-carbon  energy  demonstration  projects  through  grants,  should  be 
partially  chanelled  through  financial  instruments.  In  particular,  NER  300  funds  are  used  to  provide 
guarantee  to  the  EIB  in  relation  to  their  loans  for  energy  demonstration  projects,  in  addition  to  the  EU 
budget guarantee under H2020 and CEF financial instruments. Although those NER 300 funds have been 
pooled by the EIB together with the EU budget funds for asset management purposes, they continue to 
constitute  an  integral  part  of  the  NER  300  programme  and  the  EU  did  not  obtain  control  over  them. 
Hence, the EU recognises only its share in those asset portfolios as available for sale financial assets (see 
note 2.4.1 of the consolidated financial statements). 

The  remaining  NER  300  assets,  not  having  been  deployed  for  the  low-carbon  energy  demonstration 
projects,  shall  -  according  to  the  Directive  2003/87/EC  as  amended  in  2018  by  the  Directive  (EU) 
2018/410  -  be  used  for  innovation  support  in  low-carbon  technologies  and  processes,  in  addition  to  a 
pool  of  allowances  that  are  to  be  made  available  for  creation  of  an  ‘Innovation  Fund’.  Following  the 
Commission  Delegated  Regulation  (EU)  2019/856,  the  Innovation  Fund  shall  be  managed  by  the 
Commission  and  the  contribution  from  NER  300  when  transferred  to  the  EU  budget  will  constitute 
external  assigned  revenue.  Given  that  the  Innovation  Fund  has  not  started  its  activities,  nor  have  the 
NER  300  unused  funds  been  transferred  to  the  Commission  in  2019,  those  funds  have  not  been 
recognised as assets in the 2019 EU consolidated financial statements. 

109 

 
 
Annual accounts of the European Union 2019 

EUROPEAN UNION 
FINANCIAL YEAR 2019 

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.

110 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

CONTENTS 

EU BUDGET RESULT ....................................................................................... 112 

STATEMENTS OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS .................... 113 

NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS ................................... 115 

1.

THE EU BUDGET FRAMEWORK ................................................................. 115 

1.1.  MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020 ............................. 115 

1.2.  MFF DETAILED HEADINGS (PROGRAMMES) ......................................... 116 

1.3. 

1.4. 

1.5. 

1.6. 

ANNUAL BUDGET ............................................................................. 117 

REVENUE ........................................................................................ 118 

CALCULATION OF THE BUDGET RESULT .............................................. 119 

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT .......... 120 

2.

IMPLEMENTATION OF THE 2019 EU BUDGET – COMMENTARY ..................... 122 

2.1. 

2.2. 

REVENUE ........................................................................................ 122 

EXPENDITURE ................................................................................. 122 

3.

IMPLEMENTATION OF EU BUDGET REVENUE ............................................. 124 

3.1. 

SUMMARY OF THE IMPLEMENTATION OF EU BUDGET REVENUE ............. 124 

4.

IMPLEMENTATION OF EU BUDGET EXPENDITURE ...................................... 125 

4.1.  MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 

APPROPRIATIONS ............................................................................ 125 

4.2.  MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS ................. 126 

4.3.  MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS ....................... 127 

4.4.  MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL) .................. 128 

4.5.  MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN ..................... 129 

4.6. 

4.7. 

4.8. 

4.9. 

DETAILED MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 
APPROPRIATIONS ............................................................................ 130 

DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS .. 135 

DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS ........ 140 

DETAILED MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL) ... 146 

4.10.  DETAILED MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN ...... 151 

5.

IMPLEMENTATION OF THE BUDGET BY INSTITUTION ................................. 155 

5.1. 

5.2. 

5.3. 

IMPLEMENTATION OF BUDGET REVENUE ............................................ 155 

IMPLEMENTATION OF COMMITMENT APPROPRIATIONS......................... 156 

IMPLEMENTATION OF PAYMENT APPROPRIATIONS ............................... 157 

6.

IMPLEMENTATION OF THE AGENCIES' BUDGET ......................................... 158 

6.1. 

6.2. 

BUDGET REVENUE ........................................................................... 158 

COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY ................. 160 

111 

 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

EU BUDGET RESULT 

Note 

a 

b 

c 

d 

e 

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 (B)-(A) 

     Unused appropriations at the end of current year (A) 

     Unused appropriations at the end of previous year (B) 

f 

Exchange rate differences for the year 

Budget result 

EUR million 

2019 

2018 

163 918 

159 318 

(157 428) 

(154 833) 

(1 615) 

(1 675) 

 75 

 106 

(1 736) 

(1 114) 

9 144 

7 408 

4 

3 217 

7 408 

6 295 

 (1) 

1 802 

The budget result of the EU is returned to the Member States in 2020 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. 

a.  Revenue for the financial year: refers to table 3.1 “Summary of the implementation of EU Budget 

Revenue”, column 8 “Total Revenue”. 

b.  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”. 

c.  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. 

d.  Cancellation  of  unused  payment  appropriations  carried  over  from  year  N-1:  takes  into  account 
the amount of payment appropriations carried over (automatically 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”. 

e.  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. 

f.  Exchange rate differences include realised and non-realised exchange rate differences. 

112 

 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

146 305 

144 795 

147 056 

144 766 

– 

21 471 

17 739 

– 

21 471 

17 739 

 (1) 

23 656 

17 775 

 (1) 

21 365 

17 775 

107 095 

105 585 

105 700 

105 700 

– 

– 

– 

– 

– 

 (81) 

 (81) 

 7 

 7 

1 803 

1 811 

1 805 

1 607 

1 607 

1 585 

1 576 

 25 

 25 

 589 

 558 

 130 

 115 

 3 

 15 

 130 

 115 

 3 

 15 

14 134 

12 577 

18 575 

2 625 

 3 

 17 

 3 

 8 

148 199 

148 492 

183 771 

163 918 

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 

80 527 

80 627 

23 335 

23 435 

57 192 

57 192 

59 642 

59 642 

43 192 

43 192 

3 787 

3 787 

11 319 

11 625 

9 943 

4 115 

9 943 

4 115 

– 

– 

– 

– 

92 794 

27 826 

64 969 

62 846 

44 806 

4 065 

13 454 

10 776 

4 550 

– 

– 

90 536 

25 782 

64 754 

60 600 

43 962 

3 874 

13 111 

10 371 

4 371 

– 

– 

9  Special Instruments 

  Total 

 577 

 565 

 618 

 295 

165 796 

166 189 

184 554 

178 787 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

67 557 

20 522 

47 035 

57 400 

67 823 

20 261 

47 561 

57 837 

82 553 

26 044 

56 510 

61 252 

EUR million 

Payments 
made 

75 535 

21 748 

53 787 

59 521 

43 116 

43 113 

44 933 

43 885 

3 527 

9 358 

9 945 

4 115 

– 

– 

3 291 

8 953 

9 942 

4 115 

– 

– 

3 575 

10 933 

11 694 

3 256 

10 108 

10 381 

5 107 

4 377 

– 

– 

– 

– 

 412 

 647 

 671 

 295 

148 199 

148 492 

170 679 

159 096 

114 

 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS  

1.

  THE EU BUDGET FRAMEWORK 

The budgetary accounts are kept in accordance with the Financial Regulation (FR). 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 

  43 881 

  43 888 

  307 998 

  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 

  126 492 

  154 355 

  166 709 

  172 420 

 1 027 151 

The  above  table  shows  the  Multiannual  Financial  Framework  (MFF)  ceilings  at  current  prices.  2019  was 
the  penultimate  financial  year  covered  by  the  MFF  2014-2020.  The  overall  ceiling  for  commitment 
appropriations  for  2019  was  EUR 164  123 million,  equivalent  to  1.00 %  of  the  EU  GNI,  whilst  the 
corresponding ceiling for payment appropriations was EUR 166 709 million, or 1.01 % of the EU GNI valid 
throughout the budgetary year 2019. 

New  flexibility  provisions  have  been  agreed  for  the  2014-2020  MFF.  One  of  the  new  provisions  is  a 
possibility  to  transfer  unspent  margins  (up  until  the  caps  set  by  the  regulation)  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),  2017  (EUR 16  414 million  in  current  prices)  and  2018 
(EUR 210 million  out  of  the  calculated  EUR 11 386  million  due  to  the  capping)  was  transferred  to  the 
years  2018-2020  and  the  ceilings  of  2016-2020  were  adjusted  accordingly.  On  15  May  2019  the 
Commission  adopted  a  Communication  on  technical  adjustment  of  the  financial  framework  for  2020  in 
line with movements in GNI (ESA 2010) (COM(2019)310). 

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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: 

1a  Competitiveness  for  growth  and  jobs,  encompassing  expenditure  on  research  and  innovation, 
education  and  training,  Connecting  Europe  Facility,  social  policy,  the  internal  market  and 
accompanying policies. 

1b  Economic,  social  and  territorial  cohesion,  designed  to  enhance  convergence  of  the  least  developed 
Member States and regions, to complement the EU strategy for sustainable development outside the 
less prosperous regions and to support inter regional cooperation. 

Heading 2 – Sustainable growth: natural resources 

Heading  2  includes  the  common  agricultural  and  fisheries  policies,  and  the  environmental  measures,  in 
particular the Life + programme. 

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. 
For the Institutions other than the Commission, these costs make up the totality of their expenditure. 

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 these Member States 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). 

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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: 

–  Carry-overs 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  programmes  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. 

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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) 

Traditional own resources (TOR): usually account for +/- 14 % of own resource revenue. 

(2) 

(3) 

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  mentioned  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 

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Annual accounts of the European Union 2019 

actual  VAT  and  GNI  bases  during  the  subsequent  four  years,  unless  a  reservation  is  issued.  These 
reservations  have  to  be  seen  as  potential  claims  on  the  Member  States  for  uncertain  amounts  as  their 
financial  impact  cannot  be  estimated  with  accuracy.  When  the  exact  amount  can  be  determined,  the 
corresponding  VAT  and  GNI-based  resources  are  called  either  in  connection  with  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 quarter 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 

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implementation  reports  and  those  carried  over  to  the  following  year  in  the  year  N-1  budget 
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  carry-overs  and  carry-overs  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 i.L. 

2019 
4 796 

EUR million 
2018 
13 918 

(6 193) 
8 656 
3 341 
5 804 

8 394 
(3 832) 
(10 981) 
(3 532) 
1 924 
3 801 
(3 076) 
(7 304) 
 (79) 

(6 220) 
9 331 
(4 015) 
 (904) 

4 511 
(6 086) 
(8 634) 
(2 941) 
2 098 
3 567 
(4 175) 
(11 660) 
 448 

BUDGET RESULT OF THE YEAR 

3 217 

1 802 

In accordance with the Financial Regulation, the economic result of the year is calculated on the basis of 
accrual  accounting  principles  (EU  Accounting  Rules),  while  the  budget  result  is  based  on  modified  cash 
accounting rules. As the economic result and the budget result cover the same underlying transactions – 
the exception being the other (non-budgetary) sources of revenue and expenditure of the agencies and 
the ECSC in Liquidation which are included in the economic result only (see note 6) – the reconciliation of 
the economic result of the year with the budget result of the year serves as a useful consistency check.  

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 the reversal of accrued expenses from the previous 
year,  is  taken  into  consideration.  Payments  made  in  the  current  year  relating  to  invoices  registered  in 

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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-
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. 

Reconciling item – Economic result Agencies and ECSC in Liquidation 

The budget result of the year is a non-consolidated figure and does not include the other (non-budgetary) 
sources  of  revenue  and  expenditure  of  the  consolidated  agencies  and  the  ECSC  i.L.  (see  note  6).  To 
reconcile the economic result of the year – a consolidated figure which includes these amounts – with the 
budgetary result of the year, the whole consolidated economic result of the year of the agencies and the 
ECSC i.L. is presented as a reconciling item. 

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Annual accounts of the European Union 2019 

2.

   IMPLEMENTATION OF THE 2019 EU BUDGET – 
  COMMENTARY 

2.1.  REVENUE 

In  the  initial  adopted  EU  budget,  signed  by  the  President  of  the  European  Parliament  on  12  December 
2018, the amount of payment appropriations was EUR 148 199 million and the amount to be financed by 
own resources totalled EUR 146 305 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  2019,  three  amending  budgets  were  adopted.  Taking  them  into  account,  the  final  adopted 
revenue  for  2019  amounted  to  EUR  148  492  million  and  the  total  financed  by  own  resources  was 
EUR 144 795 million. The main factor for the reduction of Member States' contributions in 2019 was the 
surplus from the previous financial year (EUR 1 803 million) slightly counterbalanced by a net increase of 
payment appropriations (EUR 293 million). 

As far as the own resources result is concerned, the collection of traditional own resources was very close 
to the forecasted amounts. 

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. 

For  the  VAT  and  GNI  balances,  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 programmes, the clearance of accounts in agricultural funds and other contributions and refunds 
to  EU  programmes/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  2019,  these 
contributions totalled EUR 12.6 billion. 

The revenue from fines relates mainly to fines in the field of competition. 

2.2.  EXPENDITURE  

The EU budget has an important role to support the delivery of the Union's policies and priorities. Despite 
its limited amount, representing around 2 % of all public spending in the Union, it complements national 
budgets  and  has  a  clear  focus  on  investment  and  additionality.  It  is  a  key  tool  among  the  wide  set  of 
European-level  policy  and  regulatory  instruments,  to  implement  policy  priorities  which  all  EU  members 
have  agreed  upon,  translated  into  a  Multiannual  Financial  Framework  containing  the  different 
programmes and maximum expenditure ceilings. 

The  EU  budget  for  2019,  adopted  on  12  December  2018,  confirms  that  the  EU  is  directing  money  to 
where  the  needs  are.  In  2019,  and  in  line  with  the  European  Commission  proposal  of  May  2018,  the 
biggest part of the EU budget went to stimulate the creation of jobs, especially for young people, and to 
boost growth, strategic investments and convergence. The  EU has also continued supporting the efforts 
to effectively deal with the migration challenge, both inside and outside the EU. 

2019  was  the  sixth  year  of  the  current  2014-2020  Multiannual  Financial  Framework  (MFF).  The 
implementation  of  almost all  programmes  was  at  cruising  speed  except  new  programmes or  actions  for 
which the legislative process finished recently. 

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Annual accounts of the European Union 2019 

In line with the annual evolution foreseen in the MFF, appropriations proposed in the draft budget were 
set  at  EUR  165.6  billion  (3.1  %  higher  when  compared  to  the  2018  budget)  in  commitments,  and 
EUR 148.7 billion (2.7 % higher) in payments, corresponding to 1.00 % and 0.90 % of EU gross national 
income (GNI), respectively. 

All  headings  reached  high  levels  of  implementation  in  2019.  The  2019  implementation  for  all  types  of 
appropriations  (budget,  carry-overs  from  previous  year  and  assigned  revenue)  was  97  %  for 
commitments  and  93  %  for  payments.  Implementation  rates  excluding  assigned  revenue  show  full 
implementation in 2019 (99.4 % in commitments and 98.4 % in payments). 

Outstanding commitments (RAL, committed amounts not yet paid for) stood at EUR 297.7 billion at the 
end of 2019. An increase from the 2018 level had been expected, given the difference between budgeted 
commitment  and  payment  appropriations  (EUR  17.7  billion)  in  the  adopted  budget  and  taking  into 
account  the  fact  that  an  increase  in  outstanding  commitments  constitutes  a  normal  evolution,  as 
commitment appropriations increase every year as foreseen in the Multiannual Financial Framework. The 
final increase reached EUR 16.5 billion. 

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3.

  IMPLEMENTATION OF EU BUDGET REVENUE  

Annual accounts of the European Union 2019 

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  Own resources 

146 305 

144 795 

147 013 

 44 

147 056 

144 754 

 12  144 766 

 100 % 

2 291 

1 

2 

3 

4 

5=3+4 

6 

7 

8=6+7 

9=8/2 

10=5-8 

3  Surpluses, balances and adjustments 

– 

1 803 

1 811 

– 

1 811 

1 805 

– 

1 805 

 100 % 

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 

1 607 

1 607 

1 576 

 10 

1 585 

1 566 

 10 

1 576 

 98 % 

 25 

 25 

 570 

 19 

 589 

 546 

 12 

 558 

2 229 % 

 130 

 115 

 3 

 15 

 130 

13 564 

 569 

14 134 

12 279 

 298 

12 577 

9 674 % 

1 557 

 115 

5 456 

13 119 

18 575 

2 355 

 271 

2 625 

2 283 % 

15 949 

 3 

 15 

 3 

 8 

– 

 9 

 3 

 17 

 3 

 7 

– 

 1 

 3 

 8 

 110 % 

 52 % 

– 

 9 

 7 

 10 

 31 

Total 

148 199  148 492  170 001 

13 770  183 771 

163 314 

 604  163 918 

110 % 

19 853 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.

  IMPLEMENTATION OF EU BUDGET EXPENDITURE  

Annual accounts of the European Union 2019 

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 

80 527 

 100 

80 627 

23 335 

 100 

23 435 

 0 

 0 

12 166 

92 794 

67 557 

 266 

67 823 

 131 

14 600 

82 553 

4 390 

27 826 

20 522 

 (260) 

20 261 

 118 

5 664 

26 044 

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 

57 192 

59 642 

43 192 

– 

– 

– 

57 192 

– 

7 777 

64 969 

47 035 

 526 

47 561 

 13 

8 935 

56 510 

59 642 

 460 

2 745 

62 846 

57 400 

 437 

57 837 

 672 

2 743 

61 252 

43 192 

 460 

1 155 

44 806 

43 116 

 (3) 

43 113 

 665 

1 155 

44 933 

3  Security and citizenship 

3 787 

 0 

3 787 

– 

 279 

4 065 

3 527 

 (237) 

3 291 

 9 

 276 

3 575 

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  

11 319 

 306 

11 625 

 34 

1 795 

13 454 

9 358 

 (406) 

8 953 

 64 

1 916 

10 933 

9 943 

4 115 

– 

– 

 0 

9 943 

 1 

 832 

10 776 

9 945 

 (2) 

9 942 

 916 

 836 

11 694 

– 

– 

– 

4 115 

 435 

4 550 

4 115 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

4 115 

 554 

 437 

5 107 

– 

– 

– 

– 

– 

– 

– 

– 

9  Special Instruments 

 577 

 (12) 

 565 

 30 

 24 

 618 

 412 

 236 

 647 

 0 

 24 

 671 

  Total 

165 796 

 394  166 189 

 525 

17 840  184 554  148 199 

 294  148 492  1 792 

20 394 

170 679 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.2.  MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2019 

MFF Heading 

Total 
appropr.  
available 

from 
final 
adopted 
budget 

Commitments made 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over to 
2020 

assigned 
revenue 

carry-
overs by 
decision 

Total 

1 

2 

3 

4 

5=2+3 
+4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

1  Smart and inclusive growth 

92 794 

80 540 

27 826 

23 406 

 0 

 0 

9 996 

90 536 

 98 % 

2 074 

 36 

2 110 

2 376 

25 782 

 93 % 

2 013 

 3 

2 016 

 52 

 27 

EUR million 

Appropriations lapsing 

from 
final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

13=10+ 
11+12 

 149 

 28 

 121 

– 

– 

– 

 97 

 1 

 96 

64 969 

57 134 

– 

7 620 

64 754 

 100 % 

 60 

 33 

 93 

 25 

62 846 

59 161 

 438 

1 001 

60 600 

 96 % 

1 330 

 467 

1 797 

 14 

 21 

 414 

 449 

44 806 

42 718 

 438 

 807 

43 962 

 98 % 

 348 

 467 

 815 

 8 

 21 

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 

of which: Administrative 
expenditure of the 
institutions 

6  Compensations 

8 

Negative reserve and deficit 
carried over from the 
previous financial year  

3  Security and citizenship 

4 065 

3 737 

– 

 137 

3 874 

 95 % 

 142 

4  Global Europe 

13 454 

11 622 

 34 

1 454 

13 111 

 97 % 

 340 

5  Administration 

10 776 

9 797 

 1 

 574 

10 371 

 96 % 

 255 

4 550 

4 033 

 338 

4 371 

 96 % 

 94 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

– 

0 

– 

– 

 142 

 341 

 50 

 2 

 255 

 146 

 94 

 82 

– 

– 

– 

– 

– 

– 

 0 

0 

– 

– 

– 

 0 

 0 

 3 

 3 

– 

– 

 29 

 50 

 2 

 149 

 85 

– 

– 

9  Special Instruments 

 618 

 295 

 295 

 48 % 

 8 

 94 

 102 

 175 

 30 

 16 

 221 

Total 

184 554  165 153 

 473  13 161  178 787 

97 % 

4 149 

 598 

4 747 

 438 

 51 

 530 

1 019 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.3.  MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS 

Annual accounts of the European Union 2019 

MFF Heading 

Total 
appropr. 
available 

Payments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over to 
2020 

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 
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 

3 

Sustainable growth: 
natural resources 
of which: Market 
related expenditure 
and direct payments 
Security and 
citizenship 

of which: 
Administrative 
expenditure of the 
institutions 

6  Compensations 

8 

Negative reserve and 
deficit carried over 
from the previous 
financial year  

82 553 

67 637 

 113 

7 785 

75 535 

 91 % 

 151 

26 044 

20 090 

 102 

1 555 

21 748 

 84 % 

 138 

 3 

 3 

6 813 

6 967 

 32 

 18 

4 108 

4 249 

 30 

 16 

56 510 

47 547 

 10 

6 230 

53 787 

 95 % 

 13 

– 

2 705 

2 718 

 2 

 2 

61 252 

57 163 

 637 

1 721 

59 521 

 97 % 

 198 

 467 

1 023 

1 687 

 9 

 35 

44 933 

42 449 

 631 

 806 

43 885 

 98 % 

 190 

 467 

 349 

1 006 

 7 

 34 

4  Global Europe 

10 933 

8 908 

 60 

1 140 

10 108 

 92 % 

3 575 

3 153 

 7 

 96 

3 256 

 91 % 

 9 

 39 

– 

– 

 180 

 188 

 129 

 772 

 811 

 6 

 2 

 4 

5  Administration 

11 694 

9 048 

 850 

 482 

10 381 

 89 % 

 748 

 0 

 349 

1 098 

 146 

 66 

5 107 

3 571 

 515 

 291 

4 377 

 86 % 

 463 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

0 

 295 

 44 % 

 1 

0 

– 

– 

– 

 143 

 605 

 82 

 39 

– 

– 

– 

– 

– 

– 

– 

– 

 8 

 9 

 352 

 0 

9  Special Instruments 

 671 

 295 

 0 

  Total 

170 679  146 203 

1 667  11 225  159 096  93 % 

1 145 

 470 

9 144  10 759 

 675 

 125 

127 

 1 

 1 

 0 

– 

– 

 0 

 4 

 4 

 3 

– 

– 

 52 

 48 

 4 

 44 

 42 

 131 

 14 

 216 

 124 

– 

– 

 16 

 25 

 368 

 825 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.4.  MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL) 

Annual accounts of the European Union 2019 

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 

206 991 

(1 360) 

(66 413) 

139 217 

90 536 

(9 122) 

37 006 

 (738) 

(13 367) 

22 901 

25 782 

(8 380) 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

8=5+6+7 

9=4+8 

 (4) 

 (4) 

81 410 

220 627 

17 397 

40 298 

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 

169 985 

 (622) 

(53 046) 

116 317 

64 754 

 (742) 

 (0) 

64 012 

180 329 

40 047 

 (253) 

(15 133) 

24 661 

60 600 

(44 387) 

 (0) 

16 213 

40 874 

 359 

5 834 

 (6) 

 (235) 

 117 

43 962 

(43 650) 

 (269) 

(1 934) 

3 632 

3 874 

(1 323) 

27 352 

(1 200) 

(6 918) 

19 234 

13 111 

(3 190) 

 961 

 587 

– 

– 

 0 

 (97) 

 (69) 

– 

– 

 (859) 

 (515) 

– 

– 

 (0) 

 (0) 

 5 

 2 

– 

– 

– 

10 371 

(9 522) 

4 371 

(3 861) 

– 

– 

– 

– 

 295 

 (295) 

– 

– 

 (0) 

 (1) 

0 

– 

– 

– 

 313 

2 551 

9 920 

 849 

 510 

– 

– 

 1 

 430 

6 183 

29 154 

 854 

 511 

– 

– 

 1 

  Total 

281 185 

(3 179) 

(91 257) 

186 749 

178 787 

(67 838) 

 (5) 

110 944 

297 693 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.5.  MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN  

Annual accounts of the European Union 2019 

MFF Heading 

< 2013 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

Total 

1  Smart and inclusive growth 

1 428 

3 640 

2 139 

4 683 

12 476 

45 924 

68 924 

81 414 

220 627 

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 

 472 

 956 

 68 

– 

 33 

 921 

1 175 

1 608 

3 133 

5 427 

10 160 

17 402 

40 298 

2 719 

 130 

– 

 18 

 964 

 285 

– 

 20 

3 075 

9 343 

40 496 

58 763 

64 012 

180 329 

1 316 

2 685 

7 603 

12 575 

16 213 

40 874 

 1 

 53 

 3 

 37 

 76 

 313 

 430 

 433 

1 223 

1 851 

2 552 

6 183 

 909 

 958 

1 010 

1 851 

3 253 

4 973 

6 231 

9 970 

29 154 

– 

0 

– 

– 

0 

– 

 0 

0 

– 

– 

0 

– 

 0 

0 

– 

 1 

0 

– 

 2 

0 

 0 

 851 

 511 

 1 

 854 

 511 

 1 

2 438 

4 746 

3 453 

7 904 

18 846 

59 723 

89 583  110 999 

297 693 

EUR million 

The set up of the new Commission involved an internal re-organisation of services. Re-allocating the related transactions resulted in a shift of outstanding amount between years. 
The overall amount of outstanding commitments remains unchanged. 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.6.  DETAILED MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT 

  APPROPRIATIONS 

Annual accounts of the European Union 2019 

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 

Total 
approp. 
available 

12=9+ 
10+11 

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) 

European Defense Industrial 
Development Programme 
(EDIDP) 
Nuclear Safety and 
Decommissioning 

 187 

 691 

 407 

 861 

 143 

 245 

 144 

– 

– 

 2 

– 

– 

– 

– 

 187 

 691 

 409 

 861 

– 

– 

– 

– 

 143 

 0 

 245 

 144 

  Horizon 2020 

12 312 

 80 

12 392 

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) 

 374 

 367 

 0 

 0 

 374 

 367 

2 766 

 20 

2 786 

 136 

 135 

 949 

2 640 

 175 

– 

– 

– 

– 

– 

 136 

 135 

 949 

2 640 

 175 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 190 

 377 

1 022 

 1 

1 023 

 128 

 819 

 923 

 70 

 993 

 49 

 21 

 8 

– 

– 

 458 

 617 

 (58) 

 559 

 882 

 151 

 602 

 120 

 1 

 603 

 (12) 

 108 

 245 

 147 

 (145) 

 2 

 144 

 158 

 (1) 

 157 

– 

 2 

 0 

 2 

 7 

– 

– 

 190 

 253 

 49 

 14 

 8 

– 

– 

1 213 

1 248 

 608 

 619 

 123 

 2 

 157 

2 652 

15 043 

10 972 

 (160) 

10 812 

 73 

3 767 

14 652 

 115 

 488 

 370 

 (3) 

 367 

 19 

 153 

 47 

 414 

 252 

 25 

 277 

 484 

3 271 

2 563 

 46 

2 609 

 51 

 11 

 44 

 82 

 187 

 146 

 993 

 118 

 134 

 327 

 10 

 129 

 1 

 (1) 

 135 

 326 

2 722 

1 223 

 92 

1 314 

 5 

 180 

 152 

 (33) 

 118 

 3 

 7 

 1 

 0 

 1 

 1 

 0 

130 

 539 

 365 

 86 

 601 

3 217 

 50 

 10 

 3 

 18 

 4 

 180 

 145 

 331 

1 334 

 123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Programme 

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) 

Annual accounts of the European Union 2019 

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 

Total 
approp. 
available 

12=9+ 
10+11 

EUR million 

– 

 383 

 194 

 97 

 128 

27 875 

5 849 

– 

 (4) 

 (2) 

 (0) 

 4 

 9 

 5 

– 

 379 

 193 

 97 

 133 

27 885 

5 854 

8 649 

 27 

8 676 

 231 

9 754 

1 973 

 240 

 568 

– 

– 

– 

– 

– 

 231 

9 754 

1 973 

 240 

 568 

 309 

1 700 

 4 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 27 

 473 

 1 

 4 

 0 

 61 

 (61) 

– 

 406 

 665 

 98 

 382 

 165 

 100 

 (2) 

 (1) 

 379 

 164 

 (32) 

 68 

 137 

 115 

 3 

 118 

3 654 

31 539 

24 042 

 206 

24 248 

 806 

6 660 

4 370 

 (271) 

4 099 

1 151 

9 827 

7 442 

 28 

7 470 

 22 

 253 

 176 

 38 

 215 

1 801 

11 555 

7 706 

 400 

8 107 

 235 

2 208 

1 191 

 256 

1 447 

– 

– 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 23 

 81 

 1 

 0 

 242 

 591 

 390 

1 701 

 4 

 213 

 401 

 632 

 852 

 11 

 (25) 

 187 

 12 

 11 

 412 

 0 

 (109) 

 (8) 

 (0) 

 523 

 843 

 11 

– 

– 

– 

 35 

 27 

 391 

 1 

 4 

 35 

 406 

 556 

 69 

 122 

4 304 

28 551 

1 118 

5 217 

1 382 

8 852 

 28 

 242 

1 695 

 256 

 2 

 94 

 56 

 2 

 0 

9 801 

1 703 

 202 

 506 

 579 

 845 

 11 

  Youth Employment initiative 

 350 

 (41) 

  Connecting Europe Facility (CEF) 

1 700 

Pilot projects and preparatory 
actions 

 4 

– 

– 

  Total MFF Heading 1 

80 527 

 100 

80 627 

 0 

12 166 

92 794 

67 557 

 266 

67 823 

 131 

14 600 

82 553 

2 

European Agricultural Guarantee 
Fund (EAGF) 
Agricultural Fund Rural 
Development (EAFRD) 
European Maritime and Fisheries 
Fund (EMFF) 

43 192 

14 727 

 942 

– 

– 

– 

43 192 

 460 

1 155 

44 806 

43 116 

 (3) 

43 113 

 665 

1 155 

44 933 

14 727 

 942 

– 

– 

1 356 

16 083 

13 148 

 362 

13 510 

 218 

1 160 

 571 

 81 

 652 

 2 

 1 

1 356 

14 868 

 218 

 871 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Total 
approp. 
available 

12=9+ 
10+11 

EUR million 

 148 

– 

 148 

 558 

 61 

– 

 14 

– 

 559 

 61 

– 

 12 

– 

 1 

– 

– 

 (1) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 148 

 142 

 0 

 142 

– 

 7 

 8 

– 

 0 

– 

 567 

 342 

 13 

 354 

 4 

 70 

– 

 12 

– 

 61 

– 

 20 

– 

 (2) 

 59 

– 

 (14) 

 0 

– 

 6 

 0 

– 

– 

– 

– 

– 

 6 

 8 

– 

 0 

– 

 142 

 365 

 68 

– 

 6 

 0 

Programme 

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 

  Total MFF Heading 2 

59 642 

59 642 

 460 

2 745 

62 846 

57 400 

 437 

57 837 

 672 

2 743 

61 252 

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 

1 121 

 70 

1 191 

 29 

 245 

 0 

 533 

 0 

 45 

 66 

– 

– 

– 

 (0) 

 (0) 

 (0) 

– 

 29 

 245 

 0 

 533 

– 

 45 

 66 

  Union Civil protection Mechanism 

 150 

 (45) 

 105 

  Europe for Citizens 

  Food and feed 

  Health 

 29 

 290 

 68 

– 

– 

– 

 29 

 290 

 68 

  Decentralised agencies 

1 090 

 (25) 

1 066 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 17 

1 208 

 953 

 21 

 974 

 1 

 14 

 0 

 30 

 24 

 258 

 195 

 3 

 7 

 27 

 202 

 0 

 70 

 (10) 

 60 

 148 

 681 

 664 

 (162) 

 502 

– 

 1 

 2 

 4 

 0 

 4 

 3 

– 

 45 

 67 

 109 

 29 

– 

 38 

 58 

 82 

 29 

 294 

 239 

 71 

 61 

 0 

 9 

 4 

 (13) 

 (4) 

 2 

 3 

 0 

 47 

 62 

 69 

 25 

 242 

 64 

 85 

1 151 

 998 

 (87) 

 911 

 1 

 1 

 1 

 0 

 1 

– 

 1 

 0 

– 

 0 

 1 

 1 

– 

 17 

 1 

 14 

 0 

 146 

 0 

 1 

 2 

 3 

 0 

 5 

 2 

 85 

 992 

 28 

 217 

 60 

 649 

 0 

 48 

 64 

 72 

 25 

 247 

 67 

 996 

132 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Total 
approp. 
available 

12=9+ 
10+11 

EUR million 

Pilot projects and preparatory 
actions 

  Specific Actions 

  Total MFF Heading 3 

 15 

 106 

3 787 

– 

– 

 0 

 15 

 106 

3 787 

4  Pre-accession assistance (IPA II) 

2 423 

 (29) 

2 394 

  Macro-financial Assistance (MFA) 

 27 

 (27) 

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) 

– 

 24 

 20 

 25 

– 

 (11) 

 (1) 

– 

 0 

– 

 13 

 19 

 25 

2 677 

 61 

2 738 

3 190 

 15 

3 205 

  Partnership Instrument (PI) 

 154 

 (5) 

Democracy and Human Rights 
(EIDHR) 

 197 

 (18) 

  Stability and Peace (IcSP) 

 377 

 0 

 149 

 179 

 377 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 0 

 15 

 18 

 (10) 

 106 

 100 

 (0) 

 8 

 99 

 279 

4 065 

3 527 

 (237) 

3 291 

 739 

3 133 

1 708 

 (325) 

1 382 

– 

 0 

 110 

 110 

 1 

 0 

 13 

 19 

 129 

 154 

 27 

– 

 21 

 16 

 25 

 41 

2 779 

2 060 

 (17) 

– 

 (10) 

 (3) 

– 

 1 

 10 

– 

 11 

 13 

 83 

 10 

 2 

 11 

 159 

 181 

 388 

 100 

 159 

 321 

 36 

 136 

 3 

 163 

 (3) 

 319 

  Humanitarian aid 

1 652 

 315 

1 966 

 34 

 424 

2 425 

1 603 

 137 

1 740 

Common Foreign and Security 
Policy (CFSP) 
Nuclear Safety Cooperation 
(INSC) 

  Decentralised agencies 

  Other actions and programmes 

Pilot projects and preparatory 
actions 

 335 

 34 

 20 

 84 

 6 

 8 

– 

– 

 (3) 

 (4) 

 343 

 34 

 20 

 81 

 2 

– 

– 

– 

– 

– 

 41 

 384 

 306 

 3 

 309 

 0 

 0 

 34 

 21 

 205 

 286 

 0 

 2 

 41 

 20 

 73 

 8 

 (6) 

– 

 4 

 (1) 

 36 

 20 

 77 

 7 

133 

– 

 1 

 9 

 5 

– 

– 

– 

– 

 0 

 0 

 276 

 562 

– 

 110 

 1 

 0 

 8 

 101 

3 575 

1 950 

 10 

 110 

 11 

 13 

 0 

 3 

 3 

 6 

 0 

 1 

– 

 0 

– 

 9 

 2 

 9 

 145 

 167 

 331 

 371 

2 117 

 53 

 362 

 0 

 0 

 36 

 21 

 206 

 282 

 1 

 7 

 25 

 25 

 429 

 479 

2 061 

 4 

 41 

2 106 

3 287 

2 796 

 (219) 

2 578 

 16 

 123 

2 716 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Total 
approp. 
available 

12=9+ 
10+11 

  Specific Actions 

 75 

 5 

 80 

– 

 0 

 81 

 74 

 (6) 

 68 

– 

 0 

 68 

  Total MFF Heading 4 

11 319 

 306 

11 625 

 34 

1 795 

13 454 

9 358 

 (406) 

8 953 

 64 

1 916 

10 933 

EUR million 

5  Pensions 

2 004 

 (2) 

2 002 

  European schools 

 191 

 (11) 

 181 

  Decentralised agencies 

Pilot projects and preparatory 
actions 
Commission administrative 
expenditure 
Administrative expenditure of 
Other Institutions 

– 

 4 

– 

– 

– 

 4 

3 629 

 12 

3 641 

4 115 

– 

4 115 

  Total MFF Heading 5 

9 943 

 (0) 

9 943 

6  Compensations 

  Total MFF Heading 6 

8  Negative reserve 

  Deficit carried over 

  Total MFF Heading 8 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

9  Emergency Aid Reserve (EAR) 

 352 

 (306) 

 46 

European Globalisation 
Adjustment Fund (EGF) 
European Union Solidarity Fund 
(EUSF) 

 176 

– 

 176 

 50 

 294 

 344 

 30 

  Total MFF Heading 9 

 577 

 (12) 

 565 

 30 

– 

– 

– 

– 

 1 

0 

 1 

– 

– 

– 

– 

– 

– 

– 

 0 

2 002 

2 004 

 (2) 

2 002 

 12 

 193 

 191 

 (11) 

 181 

– 

 0 

– 

 4 

– 

 6 

– 

 (2) 

– 

 4 

– 

 2 

– 

 1 

 0 

 12 

– 

 0 

2 002 

 195 

– 

 6 

 385 

4 027 

3 629 

 11 

3 640 

 359 

 386 

4 385 

 435 

4 550 

4 115 

– 

4 115 

 554 

 437 

5 107 

 832 

10 776 

9 945 

 (2) 

9 942 

 916 

 836 

11 694 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 46 

 352 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 352 

 24 

 199 

– 

 24 

 373 

 618 

 10 

 50 

 (9) 

 1 

 245 

 295 

 412 

 236 

 647 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

 24 

– 

 24 

– 

– 

– 

– 

– 

 352 

 25 

 295 

 671 

  Total 

165 796 

 394  166 189 

 525 

17 840  184 554  148 199 

 294  148 492  1 792 

20 394 

170 679 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.7.  DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2019 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2020 

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) 

 377 

 187 

 819 

 691 

 458 

 409 

 882 

 861 

– 

– 

– 

– 

 190 

 377 

 100 % 

– 

 82 

 773 

 94 % 

 46 

 17 

 426 

 93 % 

 32 

 21 

 882 

 100 % 

  European Solidarity Corps (ESC) 

 151 

 143 

 0 

 4 

 148 

 98 % 

Total 

13=10+ 
11+12 

 0 

 0 

 0 

– 

– 

– 

 0 

 1 

 0 

 0 

– 

 2 

 0 

 0 

 1 

 4 

 0 

 0 

 0 

– 

– 

– 

 0 

 0 

 0 

 0 

– 

 2 

 0 

 0 

 1 

 4 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 0 

 0 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

 46 

 32 

 0 

 3 

– 

– 

– 

– 

– 

– 

– 

 26 

 3 

 1 

 4 

 0 

 0 

 3 

– 

– 

 3 

 1 

 4 

 0 

– 

– 

 245 

 100 % 

 144 

 100 % 

1 417 

13 808 

 92 % 

1 234 

–  1 234 

 51 

 422 

 86 % 

 64 

 3 

 67 

 31 

 398 

 96 % 

 15 

– 

 15 

 273 

3 060 

 94 % 

 211 

– 

 211 

 159 

 85 % 

 26 

 25 

 8 

 44 

 77 

 143 

 98 % 

 992 

 100 % 

2 716 

 100 % 

 4 

 175 

 98 % 

135 

European Defense Industrial 
Development Programme 
(EDIDP) 
Nuclear Safety and 
Decommissioning 

 245 

 245 

 144 

 144 

  Horizon 2020 

15 043 

12 391 

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 

 488 

 371 

 414 

 367 

3 271 

2 786 

 187 

 135 

 146 

 993 

 135 

 949 

  CEF - Transport 

2 722 

2 639 

CEF - Information & 
Communications Technology 
(ICT) 

 180 

 171 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2020 

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 

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) 

 0 

 406 

 665 

 98 

– 

 360 

 193 

 97 

 137 

 132 

31 539 

27 877 

  Transition regions 

6 660 

5 851 

Competitiveness (More 
developed regions) 

Outermost and sparsely 
populated regions 

9 827 

8 674 

 253 

 231 

  Cohesion fund 

11 555 

9 752 

  European territorial cooperation 

2 208 

1 973 

  Technical assistance 

European Aid to the Most 
Deprived (FEAD) 

  Youth Employment initiative 

Connecting Europe Facility 
(CEF) 
Pilot projects and preparatory 
actions 

 242 

 591 

 390 

 228 

 567 

 277 

1 701 

1 700 

 4 

 4 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 16 

 376 

 93 % 

 0 

 10 

 112 

 304 

 46 % 

 361 

 1 

 2 

 98 

 100 % 

 134 

 98 % 

 0 

 2 

3 567 

31 444 

 100 % 

 43 

 806 

6 657 

 100 % 

1 130 

9 804 

 100 % 

 22 

 253 

 100 % 

 0 

 8 

– 

1 775 

11 527 

 100 % 

 (0) 

 216 

2 189 

 99 % 

 0 

 23 

 81 

– 

– 

 228 

 94 % 

 590 

 100 % 

 358 

 92 % 

1 700 

 100 % 

 4 

 97 % 

 7 

 1 

– 

– 

 1 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

– 

– 

– 

 0 

 10 

 361 

 0 

 2 

 43 

 0 

 8 

– 

 1 

 7 

 1 

– 

 32 

 32 

– 

– 

 1 

 0 

– 

 19 

 0 

 0 

 1 

 8 

 3 

 1 

– 

– 

 0 

 12 

 1 

– 

– 

– 

  Total MFF Heading 1 

92 794 

80 540 

 0 

9 996 

90 536 

98 % 

2 074 

 36  2 110 

 52 

2 

European Agricultural 
Guarantee Fund (EAGF) 

Agricultural Fund Rural 
Development (EAFRD) 

44 806 

42 718 

 438 

 807 

43 962 

 98 % 

 348 

 467 

 815 

16 083 

14 725 

– 

 40 

14 765 

 92 % 

 903 

– 

 903 

 8 

 2 

136 

Total 

13=10+ 
11+12 

– 

 19 

 0 

 0 

 1 

 51 

 3 

 15 

– 

 26 

 12 

 13 

 1 

– 

– 

– 

 149 

 29 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 21 

– 

 0 

 0 

– 

 0 

 43 

– 

 14 

– 

 26 

 12 

 1 

 0 

– 

– 

– 

 97 

– 

– 

 413 

 415 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2020 

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 

1 160 

 940 

– 

 142 

1 082 

 93 % 

 75 

– 

 75 

 2 

European Maritime and 
Fisheries Fund (EMFF) 

Fisheries Partnership 
Agreements (SFPAs) and 
Fisheries Management 
Organisations (RFMOs) 

 148 

 148 

Environment and climate action 
(LIFE) 

 567 

 559 

  Decentralised agencies 

  Other actions and measures 

Pilot projects and preparatory 
actions 

  Specific Actions 

 70 

– 

 12 

– 

 59 

– 

 12 

– 

– 

– 

– 

– 

– 

– 

– 

 148 

 100 % 

– 

 5 

 7 

– 

– 

– 

 564 

 100 % 

 67 

 95 % 

– 

– 

 12 

 100 % 

– 

– 

 2 

 1 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 1 

– 

 0 

– 

 0 

 2 

– 

 0 

– 

Total 

13=10+ 
11+12 

 3 

– 

 0 

 2 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

– 

 0 

– 

– 

– 

– 

  Total MFF Heading 2 

62 846 

59 161 

 438 

1 001 

60 600 

96 % 

1 330 

 467  1 797 

 14 

 21 

 414 

 449 

3 

Asylum, Migration and 
Integration Fund (AMF) 

  Consumer 

  Creative Europe 

Emergency Support within the 
Union (IES) 

1 208 

1 184 

 30 

 29 

 258 

 245 

 0 

 0 

Internal Security Fund 

 681 

 533 

IT systems 

Justice 

  Rights, Equality and Citizenship 

Union Civil protection 
Mechanism 

  Europe for Citizens 

– 

 45 

 67 

 109 

 29 

– 

 45 

 66 

 70 

 29 

  Food and feed 

 294 

 290 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 9 

 1 

1 192 

 99 % 

 30 

 100 % 

 10 

 255 

 99 % 

– 

 0 

 38 % 

 9 

 0 

 4 

 0 

 64 

 597 

 88 % 

 84 

– 

 0 

 1 

 3 

 0 

 3 

– 

– 

 45 

 99 % 

 67 

 99 % 

 73 

 67 % 

 29 

 99 % 

 292 

 99 % 

137 

– 

 0 

 1 

 1 

 0 

 2 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 9 

 0 

 4 

 0 

 84 

– 

 0 

 1 

 1 

 0 

 2 

 7 

 0 

 0 

 0 

 0 

– 

 0 

 0 

 35 

 0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

 0 

 0 

 0 

– 

 0 

 7 

 0 

 0 

 0 

 0 

– 

 0 

 0 

 35 

 0 

 0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2020 

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 

  Health 

 71 

 68 

  Decentralised agencies 

1 151 

1 059 

Pilot projects and preparatory 
actions 

  Specific Actions 

 15 

 15 

 106 

 106 

  Total MFF Heading 3 

4 065 

3 737 

4 

Pre-accession assistance (IPA 
II) 

3 133 

2 393 

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) 

 0 

 110 

 13 

 19 

 154 

 0 

– 

 13 

 19 

 25 

2 779 

2 738 

3 287 

3 204 

 159 

 181 

 388 

 149 

 179 

 377 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 71 

 100 % 

 44 

1 102 

 96 % 

– 

 0 

 15 

 99 % 

 106 

 100 % 

 0 

 41 

 0 

 0 

 137 

3 874 

95 % 

 142 

 601 

2 994 

 96 % 

 138 

– 

 0 

 97 % 

 103 

 103 

 94 % 

 0 

 0 

 13 

 99 % 

 19 

 100 % 

– 

 7 

 0 

 0 

 70 

 95 

 61 % 

 60 

 31 

2 769 

 100 % 

 10 

 58 

3 262 

 99 % 

 25 

 7 

 1 

 156 

 98 % 

 179 

 99 % 

 10 

 387 

 100 % 

  Humanitarian aid 

2 425 

1 966 

 34 

 412 

2 412 

 99 % 

Common Foreign and Security 
Policy (CFSP) 
Nuclear Safety Cooperation 
(INSC) 

 384 

 343 

 34 

 34 

– 

– 

 17 

 360 

 94 % 

– 

 34 

 100 % 

138 

 3 

 1 

 1 

 13 

 24 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 41 

 0 

 0 

 0 

 7 

 0 

 0 

 142 

 50 

 138 

– 

 7 

 0 

 0 

 60 

 10 

 25 

 3 

 1 

 1 

 13 

 24 

 0 

 1 

 0 

– 

– 

 0 

– 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 0 

 0 

– 

 0 

 0 

– 

– 

 0 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

Total 

13=10+ 
11+12 

 0 

 7 

 0 

 0 

 50 

 1 

 0 

– 

 0 

 0 

– 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

Total 
appropr.  
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriat. carried over 
to 2020 

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 Actions 

 21 

 286 

 2 

 81 

 20 

 81 

 1 

 80 

– 

– 

– 

– 

 0 

 21 

 100 % 

 145 

 226 

 79 % 

– 

 0 

 1 

 47 % 

 81 

 100 % 

 0 

 60 

 0 

 0 

– 

– 

 1 

– 

 0 

 60 

 1 

 0 

  Total MFF Heading 4 

13 454 

11 622 

 34 

1 454 

13 111 

97 % 

 340 

 1 

 341 

Total 

13=10+ 
11+12 

– 

 0 

 0 

– 

 2 

 12 

 0 

– 

 0 

 52 

 85 

 149 

– 

– 

– 

– 

– 

– 

 191 

 30 

 221 

– 

 0 

 0 

– 

 0 

– 

– 

– 

 0 

 0 

 3 

 3 

– 

– 

– 

– 

– 

– 

 16 

– 

 16 

– 

 0 

– 

– 

 2 

 12 

 0 

– 

– 

 51 

 82 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

0 

– 

– 

– 

– 

– 

– 

 0 

 2 

– 

– 

 159 

 94 

– 

– 

– 

– 

– 

 255 

 146 

 46 

 46 

– 

 8 

 175 

 49 

 49 

– 

 94 

 102 

 175 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

0 

 0 

– 

– 

– 

– 

– 

– 

– 

 30 

 30 

 51 

5  Pensions 

  European schools 

  Decentralised agencies 

Pilot projects and preparatory 
actions 
Commission administrative 
expenditure 
Administrative expenditure of 
Other Institutions 

2 002 

1 990 

 193 

 181 

– 

 4 

– 

 4 

4 027 

3 589 

4 550 

4 033 

  Total MFF Heading 5 

10 776 

9 797 

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 

– 

– 

– 

– 

– 

 46 

 199 

 373 

 618 

– 

– 

– 

– 

– 

– 

 1 

 295 

 295 

– 

– 

– 

– 

 1 

0 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 10 

– 

– 

1 990 

 99 % 

 191 

 99 % 

– 

– 

 4 

 100 % 

 0 

 2 

– 

– 

 225 

3 816 

 95 % 

 159 

 338 

4 371 

 96 % 

 94 

 574 

10 371 

96 % 

 255 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 0 % 

 295 

 79 % 

 295 

48 % 

– 

– 

– 

– 

– 

– 

 8 

– 

 8 

  Total 

184 554  165 153 

 473  13 161  178 787 

97 % 

4 149 

 598  4 747 

 438 

139 

 530 

1 019 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.8.  DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS 

Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

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) 
European Defense 
Industrial Development 
Programme (EDIDP) 
Nuclear Safety and 
Decommissioning 

1 213 

1 023 

– 

 163 

1 186 

 98 % 

1 248 

 991 

 2 

 48 

1 041 

 83 % 

 608 

 558 

 0 

 17 

 575 

 95 % 

 619 

 601 

 2 

 14 

 617 

 100 % 

 123 

 105 

 4 

 2 

 0 

 157 

 157 

– 

– 

 0 

– 

– 

 109 

 89 % 

 0 

 7 % 

 157 

 100 % 

0 

 2 

 1 

 2 

 3 

 2 

– 

  Horizon 2020 

14 652 

10 731 

 65 

 782 

11 578 

 79 % 

 81 

– 

– 

– 

– 

– 

– 

– 

– 

 27 

 27 

 205 

 207 

 32 

 32 

 0 

 0 

 0 

 2 

 (0) 

 0 

 7 

– 

– 

 10 

 2 

– 

2 983 

3 065 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 0 

 0 

 4 

– 

– 

 8 

 2 

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 

 539 

 331 

 17 

 42 

 390 

 72 % 

 33 

 3 

 111 

 146 

 365 

 274 

 3 

 53 

 330 

 90 % 

3 217 

2 602 

 7 

 248 

2 857 

 89 % 

 180 

 126 

 145 

 133 

 0 

 0 

 3 

 4 

 129 

 72 % 

 137 

 95 % 

 2 

 7 

 1 

 0 

– 

– 

– 

– 

 33 

 36 

 0 

 0 

 353 

 360 

 47 

 48 

 6 

 6 

 0 

 2 

 2 

 0 

 1 

 0 

140 

– 

– 

– 

– 

 0 

– 

– 

 1 

 0 

 0 

 0 

 0 

– 

 0 

 0 

 0 

 0 

 4 

 0 

 0 

 10 

 2 

 0 

 1 

 3 

 2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

EUR million 

  CEF - Energy 

 331 

 325 

  CEF - Transport 

1 334 

1 312 

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 

 1 

 1 

 0 

– 

– 

 3 

 330 

 100 % 

 14 

1 327 

 100 % 

 4 

 122 

 99 % 

 35 

 16 

 35 

 99 % 

 377 

 93 % 

 123 

 118 

 35 

– 

 406 

 361 

 556 

 162 

 1 

 106 

 268 

 48 % 

 69 

 64 

 122 

 116 

28 551 

24 248 

5 217 

4 099 

8 852 

7 470 

 242 

 215 

9 801 

8 107 

1 703 

1 447 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 3 

 65 

 94 % 

 119 

 97 % 

3 281 

27 529 

 96 % 

1 053 

5 151 

 99 % 

 982 

8 452 

 95 % 

 9 

 223 

 92 % 

 686 

8 793 

 90 % 

 99 

1 546 

 91 % 

 1 

 2 

 0 

0 

0 

 1 

0 

0 

0 

0 

0 

0 

0 

0 

  Technical assistance 

 202 

 173 

 10 

 1 

 184 

 91 % 

 13 

European Aid to the 
Most Deprived (FEAD) 
Youth Employment 
initiative 

 506 

 412 

 579 

 523 

 0 

– 

 92 

 26 

 504 

 100 % 

 549 

 95 % 

 0 

0 

141 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 4 

 0 

 0 

 1 

 6 

 1 

 0 

 0 

 0 

 0 

– 

 10 

 10 

 19 

 285 

 287 

 0 

 1 

 0 

 1 

1 023 

1 023 

 66 

 66 

 400 

 400 

 19 

 19 

1 008 

1 008 

 157 

 157 

 1 

 2 

 14 

 2 

 30 

 30 

 1 

 4 

 2 

– 

– 

– 

– 

– 

– 

 1 

 0 

– 

 0 

 0 

 0 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

 2 

 0 

– 

– 

– 

 0 

– 

 0 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

 0 

 0 

– 

 0 

 1 

 0 

– 

 19 

 1 

 4 

 2 

– 

– 

– 

– 

– 

– 

 4 

 0 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

EUR million 

Connecting Europe 
Facility (CEF) 
Pilot projects and 
preparatory actions 

 845 

 843 

 11 

 11 

– 

– 

 2 

 0 

 845 

 100 % 

 11 

 96 % 

– 

0 

– 

– 

 0 

 0 

 0 

 0 

– 

 0 

– 

– 

  Total MFF Heading 1 

82 553 

67 637 

 113 

7 785 

75 535 

91 % 

 151 

 3 

6 813 

6 967 

 32 

 18 

2 

European Agricultural 
Guarantee Fund 
(EAGF) 
Agricultural Fund Rural 
Development (EAFRD) 

European Maritime and 
Fisheries Fund (EMFF) 

Fisheries Partnership 
Agreements (SFPAs) 
and Fisheries 
Environment and 
Management 
climate action (LIFE) 
Organisations (RFMOs) 
  Decentralised agencies 

Other actions and 
measures 
Pilot projects and 
preparatory actions 

  Specific Actions 

44 933 

42 449 

 631 

 806 

43 885 

 98 % 

 190 

 467 

 349 

1 006 

14 868 

13 505 

 2 

 705 

14 213 

 96 % 

 871 

 651 

 1 

 197 

 848 

 97 % 

 142 

 142 

 365 

 350 

 68 

 59 

– 

 6 

 0 

– 

 6 

 0 

– 

 4 

– 

– 

– 

– 

– 

 5 

 7 

– 

– 

– 

 142 

 100 % 

 359 

 99 % 

 67 

 98 % 

– 

– 

 6 

 100 % 

 0 

 100 % 

 2 

 1 

0 

 4 

0 

0 

0 

0 

– 

– 

– 

– 

– 

– 

– 

– 

 650 

 652 

 21 

 22 

– 

 1 

 1 

– 

 0 

– 

– 

 5 

 1 

– 

 0 

– 

  Total MFF Heading 2 

61 252 

57 163 

 637 

1 721 

59 521 

97 % 

 198 

 467 

1 023 

1 687 

 7 

 2 

 0 

– 

 0 

 0 

– 

– 

 0 

 9 

3 

Asylum, Migration and 
Integration Fund (AMF) 

 992 

 878 

  Consumer 

 28 

 26 

  Creative Europe 

 217 

 200 

Emergency Support 
within the Union (IES) 

 60 

 60 

Internal Security Fund 

 649 

 500 

 1 

 0 

 1 

 0 

 1 

 8 

 1 

 8 

 0 

 886 

 89 % 

 27 

 97 % 

 209 

 96 % 

 60 

 100 % 

 27 

 529 

 81 % 

 1 

 1 

 2 

 0 

 1 

– 

– 

– 

– 

– 

142 

 9 

 0 

 6 

 0 

 11 

 95 

 1 

 8 

 0 

 0 

 0 

 0 

 0 

 118 

 120 

 34 

 0 

 0 

– 

 0 

– 

– 

– 

– 

 35 

 1 

 0 

 0 

 0 

 0 

– 

– 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

 0 

– 

 (0) 

– 

 0 

 52 

 42 

 2 

 0 

– 

 0 

 0 

– 

– 

 0 

 44 

 95 

 0 

 0 

 0 

 0 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

EUR million 

IT systems 

Justice 

Rights, Equality and 
Citizenship 
Union Civil protection 
Mechanism 

  Europe for Citizens 

 0 

 48 

 64 

 72 

 25 

 0 

 46 

 61 

 42 

 25 

  Food and feed 

 247 

 241 

  Health 

 67 

 63 

  Decentralised agencies 

 996 

 905 

Pilot projects and 
preparatory actions 

  Specific Actions 

 8 

 101 

 7 

 99 

  Total MFF Heading 3 

3 575 

3 153 

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) 

1 950 

1 375 

 10 

 10 

 110 

 11 

 13 

– 

 9 

 13 

– 

 0 

 0 

– 

 0 

 1 

 1 

– 

– 

 1 

 7 

 5 

– 

– 

– 

– 

 0 

 0 

 1 

 2 

 0 

 4 

 2 

 0 

 100 % 

 47 

 96 % 

 62 

 98 % 

 44 

 61 % 

 25 

 98 % 

 246 

 99 % 

 65 

 97 % 

 44 

 949 

 95 % 

– 

 0 

 7 

 84 % 

 100 

 99 % 

 96 

3 256 

91 % 

 202 

1 583 

 81 % 

– 

 10 

 100 % 

 103 

 103 

 94 % 

 1 

 0 

 9 

 82 % 

 13 

 100 % 

 479 

 25 

 25 

 275 

 325 

 68 % 

143 

0 

 0 

 0 

0 

 0 

 1 

 1 

0 

0 

 1 

 9 

 6 

0 

– 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 1 

 1 

 0 

 1 

 1 

– 

 1 

 1 

 1 

 0 

 1 

 2 

 41 

 41 

 0 

 0 

 0 

 1 

– 

 0 

 0 

 27 

 0 

 0 

 0 

 6 

 1 

 0 

 180 

 188 

 129 

 360 

 366 

 1 

– 

 7 

– 

 0 

– 

 7 

– 

 0 

 154 

 154 

– 

– 

 2 

– 

– 

– 

 0 

 0 

– 

– 

 0 

 0 

– 

– 

 0 

 2 

 1 

– 

– 

– 

– 

– 

– 

 0 

 0 

 0 

– 

 0 

 0 

 0 

 0 

– 

 0 

 0 

– 

– 

– 

– 

– 

– 

 1 

 0 

 27 

 0 

 0 

 0 

 6 

 1 

 0 

 131 

 2 

– 

– 

 2 

– 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

EUR million 

2 106 

2 055 

 4 

 22 

2 080 

 99 % 

 6 

– 

 19 

 25 

 0 

 0 

– 

European 
Neighbourhood 
Instrument (ENI) 

Development 
Cooperation 
Instrument (DCI) 

2 716 

2 564 

 14 

 48 

2 627 

 97 % 

 13 

Partnership Instrument 
(PI) 

Democracy and Human 
Rights (EIDHR) 
Stability and Peace 
(IcSP) 

 145 

 134 

 167 

 159 

 331 

 315 

  Humanitarian aid 

2 117 

1 734 

Common Foreign and 
Security Policy (CFSP) 
Nuclear Safety 
Cooperation (INSC) 

 362 

 308 

 36 

 35 

  Decentralised agencies 

 21 

 20 

 0 

 3 

 3 

 5 

 0 

 0 

– 

 4 

 0 

 7 

 138 

 95 % 

 162 

 97 % 

 324 

 98 % 

 324 

2 064 

 97 % 

 31 

 340 

 94 % 

– 

 0 

 36 

 98 % 

 21 

 100 % 

Other actions and 
programmes 
Pilot projects and 
preparatory actions 

  Specific Actions 

 282 

 76 

 0 

 123 

 199 

 71 % 

 7 

 68 

 7 

 68 

– 

– 

– 

 0 

 7 

 93 % 

 68 

 100 % 

 0 

 3 

 4 

 6 

 0 

 1 

0 

 0 

0 

0 

  Total MFF Heading 4 

10 933 

8 908 

 60 

1 140 

10 108 

92 % 

 39 

5  Pensions 

2 002 

1 990 

  European schools 

 195 

 181 

  Decentralised agencies 

– 

– 

– 

 2 

– 

– 

1 990 

 99 % 

 10 

 192 

 99 % 

– 

– 

– 

 0 

 0 

– 

144 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 73 

 86 

 0 

 2 

 1 

 3 

 1 

 2 

 47 

 22 

 0 

 0 

 3 

 4 

 6 

 53 

 22 

 1 

 0 

 83 

 83 

 0 

 0 

 0 

 0 

 772 

 811 

 0 

 3 

– 

 0 

 3 

– 

 1 

 1 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 0 

 6 

 12 

 0 

– 

 0 

 1 

 1 

 0 

– 

 0 

– 

 0 

– 

– 

 4 

– 

– 

– 

 2 

 0 

 0 

– 

– 

– 

– 

– 

 1 

 0 

 4 

– 

– 

– 

 1 

 3 

 3 

 2 

 1 

 0 

 0 

 0 

 0 

 0 

 1 

 0 

 14 

 12 

 0 

– 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Payments made 

Appropriations carried over to 
2020 

Appropriations lapsing 

Programme 

Total 
appropr. 
available 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

automat
. carry 
overs 

carry-
overs 
by 
decis. 

assigned 
revenue 

Total 

from 
final 
adopted 
budge 

from 
carry-
overs 

from 
assigned 
revenue 

1 

2 

3 

4 

5=2+ 
3+4 

6=5/1 

7 

8 

9 

10=7+ 
8+9 

11 

12 

13 

Total 

14=11+ 
12+13 

EUR million 

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) 

 6 

 4 

 1 

 0 

 4 

 77 % 

0 

 0 

– 

 0 

4 385 

3 303 

 332 

 182 

3 817 

 87 % 

 285 

5 107 

3 571 

 515 

 291 

4 377 

 86 % 

 463 

– 

0 

 204 

 489 

 143 

 605 

 0 

 52 

 82 

11 694 

9 048 

 850 

 482 

10 381 

89 % 

 748 

 0 

 349 

1 098 

 146 

– 

– 

– 

– 

– 

 352 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

- 

– 

– 

- 

– 

 0 

 1 % 

 295 

 100 % 

 295 

44 % 

– 

– 

0 

0 

0 

0 

 1 

0 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 8 

– 

 8 

– 

– 

– 

– 

– 

– 

 9 

– 

 9 

– 

– 

– 

– 

– 

 352 

 0 

 1 

 352 

 1 

 26 

 39 

 66 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

 1 

 3 

 4 

– 

– 

– 

– 

– 

– 

 16 

– 

 16 

 1 

 79 

 124 

 216 

– 

– 

– 

– 

– 

 352 

 16 

 1 

 368 

European Globalisation 
Adjustment Fund (EGF) 
European Union 
Solidarity Fund (EUSF) 

 25 

 0 

 295 

 295 

  Total MFF Heading 9 

 671 

 295 

  Total 

170 679  146 203  1 667  11 225  159 096  93 % 

1 145 

 470 

9 144  10 759 

 675 

 125 

 25 

 825 

145 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.9.  DETAILED MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL) 

Annual accounts of the European Union 2019 

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 

Cancellation 
of commitm. 
which cannot 
be carried 
over 

Commitm. 
outstanding 
at year-end 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

1 

2 

3 

4=1+2+3 

5 

6 

7 

8=5+6+7 

9=4+8 

1 

European Fund  Strategic 
Investments (EFSI) 
European satellite navigation 
(EGNOS/Galileo) 
International Thermonuclear Reactor 
(ITER) 
European Earth Observation Progr 
(Copernicus) 

  European Solidarity Corps (ESC) 

European Defense Industrial 
Development Programme (EDIDP) 

  Nuclear Safety and Decommissioning 

2 714 

1 224 

1 454 

 243 

 17 

– 

 596 

 (0) 

(1 015) 

1 698 

 377 

 (171) 

 (0) 

 (724) 

 (0) 

 (519) 

 (1) 

 (230) 

 (0) 

 (6) 

– 

– 

 500 

 935 

 12 

 10 

– 

 773 

 (316) 

 426 

 (56) 

 (0) 

 882 

 (387) 

 148 

 (103) 

 245 

 (0) 

 (0) 

 (128) 

 468 

 144 

 (29) 

  Horizon 2020 

20 541 

 (412) 

(7 640) 

12 490 

13 808 

(3 938) 

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 

 275 

 943 

 855 

 222 

 175 

2 072 

4 241 

 448 

 254 

 52 

 404 

 (11) 

 (145) 

 (19) 

 (296) 

 119 

 628 

 422 

 (245) 

 398 

 (33) 

 (62) 

 (387) 

 406 

3 060 

(2 469) 

 (22) 

 (95) 

 (6) 

 (98) 

 105 

 71 

 (14) 

 (320) 

1 738 

 159 

 (34) 

 143 

 992 

 (39) 

 (9) 

 (75) 

(1 277) 

2 890 

2 716 

 (51) 

 (12) 

 (116) 

 (48) 

 (35) 

– 

 (36) 

 (30) 

 (173) 

 321 

 172 

 15 

 200 

 175 

 (7) 

– 

– 

 376 

 (341) 

 304 

 (95) 

146 

– 

– 

– 

– 

– 

– 

 (4) 

 (0) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 206 

 456 

 370 

 495 

 45 

 245 

 115 

1 905 

 957 

1 305 

 507 

 55 

 245 

 583 

9 866 

22 356 

 176 

 365 

 591 

 125 

 103 

 983 

2 666 

 169 

– 

 36 

 210 

 295 

 993 

 997 

 230 

 175 

2 721 

5 556 

 490 

 172 

 51 

 410 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Cancellation 
of commitm. 
which cannot 
be carried 
over 

Commitm. 
outstanding 
at year-end 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

1 

2 

3 

4=1+2+3 

5 

6 

7 

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 

 107 

 169 

85 194 

18 502 

26 523 

 588 

25 851 

4 502 

 251 

1 304 

1 655 

5 595 

 20 

 (8) 

 (48) 

 (18) 

 (80) 

 51 

 72 

 98 

 (17) 

 134 

 (39) 

 (494) 

(27 428) 

57 272 

31 444 

 (101) 

 (24) 

(5 139) 

13 338 

6 657 

 (12) 

 (52) 

(8 380) 

18 092 

9 804 

 (72) 

– 

 (205) 

 384 

 253 

 (18) 

 (3) 

(8 404) 

17 444 

11 527 

 (389) 

 (2) 

(1 536) 

2 964 

2 189 

 (10) 

– 

– 

– 

– 

– 

– 

– 

– 

 (21) 

 (96) 

 (1) 

 (483) 

 134 

 820 

 228 

 (89) 

 (0) 

 590 

 (21) 

 (13) 

 (527) 

1 114 

 358 

 (22) 

 (11) 

 (838) 

4 745 

1 700 

 (1) 

 (10) 

 8 

 4 

 (7) 

 (0) 

– 

– 

– 

– 

 81 

 95 

 131 

 166 

31 343 

88 615 

6 645 

9 732 

 234 

19 984 

27 824 

 618 

11 138 

28 582 

2 178 

 139 

 569 

 337 

1 694 

 3 

5 142 

 273 

1 390 

1 450 

6 439 

 12 

  Total MFF Heading 1 

206 991 

(1 360) 

(66 413) 

139 217 

90 536 

(9 122) 

 (4) 

81 410 

220 627 

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) 

 359 

 (6) 

 (235) 

 117 

43 962 

(43 650) 

34 594 

 (38) 

(13 714) 

20 842 

14 765 

 (499) 

– 

– 

 313 

 430 

14 266 

35 108 

3 280 

 (73) 

 (826) 

2 382 

1 082 

 (22) 

 (0) 

1 059 

3 441 

 15 

 (2) 

 (6) 

 8 

 148 

 (136) 

1 768 

 (131) 

 (342) 

1 294 

 564 

 (17) 

– 

– 

– 

 12 

 548 

 3 

 19 

1 841 

 3 

  Decentralised agencies 

 3 

 (0) 

 (3) 

– 

 67 

 (64) 

147 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Cancellation 
of commitm. 
which cannot 
be carried 
over 

Commitm. 
outstanding 
at year-end 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

1 

2 

3 

4=1+2+3 

5 

6 

7 

8=5+6+7 

9=4+8 

  Other actions and measures 

Pilot projects and preparatory 
actions 

  Specific Actions 

– 

 28 

 0 

– 

 (3) 

 (0) 

– 

 (6) 

 (0) 

– 

 19 

– 

– 

 12 

– 

– 

 (0) 

– 

– 

– 

– 

– 

 12 

– 

– 

 31 

– 

  Total MFF Heading 2 

40 047 

 (253) 

(15 133) 

24 661 

60 600 

(44 387) 

 (0) 

16 213 

40 874 

3 

Asylum, Migration and Integration 
Fund (AMF) 

  Consumer 

  Creative Europe 

Emergency Support within the Union 
(IES) 

2 662 

 (98) 

 (750) 

1 814 

1 192 

 (136) 

 40 

 219 

 62 

 (1) 

 (8) 

 (0) 

 (18) 

 (96) 

 (60) 

 22 

 115 

 2 

 30 

 (10) 

 255 

 (113) 

Internal Security Fund 

1 746 

 (103) 

 (525) 

1 118 

 597 

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) 

 46 

 90 

 105 

 43 

 21 

 319 

 133 

 242 

 24 

 82 

 (36) 

 (0) 

 (2) 

 (1) 

 (3) 

 (1) 

 (30) 

 (45) 

 (17) 

 (11) 

 (9) 

 (178) 

 (1) 

 (0) 

 (3) 

 (2) 

 (51) 

 (85) 

 (7) 

 (63) 

 10 

 58 

 59 

 22 

 9 

 132 

 82 

 157 

 14 

 17 

5 834 

7 425 

 (269) 

(1 934) 

 (355) 

(1 414) 

3 632 

5 656 

148 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

1 057 

2 870 

 20 

 141 

 0 

 593 

– 

 29 

 49 

 45 

 15 

 225 

 56 

 238 

 14 

 69 

 43 

 256 

 2 

1 711 

 10 

 87 

 108 

 67 

 24 

 357 

 138 

 395 

 29 

 86 

2 551 

2 826 

6 183 

8 481 

 0 

– 

 45 

 67 

 73 

 29 

 (0) 

 (4) 

– 

 (16) 

 (18) 

 (27) 

 (14) 

 292 

 (68) 

 71 

 (14) 

1 102 

 (864) 

 15 

 (1) 

 106 

 (37) 

3 874 

(1 323) 

2 994 

 (169) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Cancellation 
of commitm. 
which cannot 
be carried 
over 

Commitm. 
outstanding 
at year-end 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

1 

2 

3 

4=1+2+3 

5 

6 

7 

8=5+6+7 

9=4+8 

  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 

  Specific Actions 

 45 

– 

 15 

 22 

 325 

7 833 

8 755 

 386 

 358 

 627 

 893 

 266 

 107 

– 

 152 

 16 

 126 

 (0) 

 (10) 

– 

 (2) 

 (0) 

– 

 (4) 

 (3) 

– 

 (241) 

 35 

– 

 9 

 19 

 84 

 0 

– 

 103 

 (103) 

 13 

 19 

 95 

 (5) 

 (10) 

 (84) 

 (526) 

(1 713) 

5 594 

2 769 

 (367) 

 (187) 

(2 298) 

6 269 

3 262 

 (329) 

 (3) 

 (118) 

 (8) 

 (115) 

 (13) 

 (206) 

 (36) 

 (552) 

 (49) 

 (130) 

 (3) 

 (24) 

– 

 (8) 

 (3) 

 (4) 

– 

 (38) 

 (6) 

 (46) 

 264 

 235 

 408 

 305 

 88 

 80 

– 

 156 

 (21) 

 179 

 (47) 

 387 

 (118) 

2 412 

(1 511) 

 360 

 (210) 

 34 

 21 

 (12) 

 (21) 

 105 

 226 

 (161) 

 6 

 76 

 1 

 81 

 (0) 

 (21) 

  Total MFF Heading 4 

27 352 

(1 200) 

(6 918) 

19 234 

13 111 

(3 190) 

5  Pensions 

  European schools 

  Decentralised agencies 

– 

 2 

– 

– 

– 

– 

– 

 (2) 

– 

– 

– 

– 

1 990 

(1 990) 

 191 

 (190) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 (0) 

 (0) 

– 

– 

– 

– 

– 

– 

 (0) 

 (0) 

– 

– 

 0 

– 

 8 

 9 

 10 

2 401 

2 933 

 135 

 133 

 268 

 901 

 150 

 22 

 0 

 65 

 1 

 59 

 35 

– 

 17 

 28 

 95 

7 995 

9 203 

 400 

 367 

 676 

1 205 

 238 

 102 

 0 

 171 

 7 

 135 

9 920 

29 154 

– 

 0 

– 

– 

 0 

– 

149 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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 

Cancellation 
of commitm. 
which cannot 
be carried 
over 

Commitm. 
outstanding 
at year-end 

EUR million 

Total 
commitm. 
outstanding 
at the end of 
the year 

1 

2 

3 

4=1+2+3 

5 

6 

7 

8=5+6+7 

9=4+8 

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 

 6 

 366 

 587 

 961 

– 

– 

– 

– 

– 

– 

 0 

– 

 0 

– 

 (4) 

 (28) 

 (337) 

 (69) 

 (515) 

 (97) 

 (859) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 (0) 

 (0) 

– 

– 

 (0) 

 (0) 

 2 

 0 

 2 

 5 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 4 

 (0) 

3 816 

(3 480) 

4 371 

(3 861) 

10 371 

(9 522) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 1 

 (0) 

 295 

 (295) 

 295 

 (295) 

– 

 (1) 

0 

 (1) 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 4 

 335 

 510 

 849 

– 

– 

– 

– 

– 

– 

 1 

– 

 1 

 6 

 335 

 511 

 854 

– 

– 

– 

– 

– 

– 

 1 

– 

 1 

  Total 

281 185 

(3 179)  (91 257) 

186 749 

178 787  (67 838) 

 (5) 

110 944 

297 693 

150 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.10.   DETAILED MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN 

Annual accounts of the European Union 2019 

Programme 

< 2013 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

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) 

European Defense Industrial Development Programme (EDIDP) 

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 

– 

 0 

– 

– 

– 

– 

– 

 271 

 8 

 5 

 0 

– 

– 

 2 

 2 

 0 

 172 

– 

 11 

 0 

 0 

– 

– 

 348 

– 

– 

– 

 35 

 385 

 1 

 137 

 0 

 0 

– 

– 

 3 

– 

– 

– 

 10 

 1 

 0 

– 

– 

– 

– 

– 

– 

– 

 30 

– 

 0 

– 

– 

 4 

 11 

– 

 3 

– 

– 

 4 

1 691 

 121 

 266 

 3 

– 

– 

 338 

 321 

 6 

 10 

– 

 41 

 77 

 103 

 105 

 107 

 206 

 456 

 370 

 495 

 45 

 245 

 115 

1 905 

 957 

1 305 

 507 

 55 

 245 

 583 

 823 

1 187 

1 988 

3 219 

4 615 

9 866 

22 356 

 2 

 4 

 1 

 1 

 0 

 19 

 13 

 20 

 7 

 1 

 183 

 182 

 91 

 20 

– 

– 

 8 

– 

 1 

 41 

 12 

– 

– 

 16 

 1 

 3 

 9 

 84 

 41 

 6 

 7 

 256 

 487 

 110 

– 

– 

 15 

 4 

 5 

 30 

 153 

 106 

 27 

 12 

 513 

 724 

 60 

– 

 15 

 41 

 9 

 19 

 51 

 231 

 237 

 64 

 52 

 601 

 176 

 365 

 591 

 125 

 103 

 983 

1 543 

2 666 

 115 

 172 

– 

 0 

 99 

 36 

 43 

– 

 36 

 210 

 81 

 95 

 295 

 993 

 997 

 230 

 175 

2 721 

5 556 

 490 

 172 

 51 

 410 

 131 

 166 

Regional convergence (Less developed regions) 

 665 

2 184 

 424 

1 388 

4 259 

19 724 

28 628 

31 343 

88 615 

Transition regions 

Competitiveness (More developed regions) 

Outermost and sparsely populated regions 

Cohesion fund 

 37 

 53 

– 

– 

 363 

– 

 85 

 129 

 6 

 154 

 122 

 122 

 314 

 532 

 16 

 252 

1 382 

5 230 

6 291 

6 645 

19 984 

1 114 

6 502 

9 398 

9 732 

27 824 

 27 

 113 

 221 

 234 

 618 

 793 

6 061 

9 940 

11 138 

28 582 

151 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

< 2013 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

Total 

EUR million 

European territorial cooperation 

 48 

 50 

Technical assistance 

European Aid to the Most Deprived (FEAD) 

Youth Employment initiative 

Connecting Europe Facility (CEF) 

Pilot projects and preparatory actions 

– 

– 

– 

– 

 0 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

 197 

– 

 0 

 24 

 3 

 105 

 441 

 0 

 9 

 17 

 96 

 400 

 29 

 334 

 228 

 63 

 388 

 381 

 139 

 569 

 337 

1 245 

1 283 

1 579 

1 694 

 1 

 4 

 3 

 3 

 273 

1 390 

1 450 

6 439 

 12 

 986 

1 871 

2 178 

5 142 

Total MFF Heading 1 

1 428 

3 640 

2 139 

4 683 

12 476 

45 924 

68 924 

81 414 

220 627 

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 

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 

– 

 0 

 12 

– 

 56 

– 

– 

– 

– 

– 

– 

 87 

– 

 43 

– 

– 

 0 

– 

– 

 1 

 3 

 37 

 76 

 313 

 430 

 198 

1 149 

2 148 

6 413 

10 934 

14 266 

35 108 

 2 

– 

 5 

– 

 342 

 911 

1 022 

1 059 

3 441 

– 

 3 

 5 

 12 

 19 

 84 

 162 

 190 

 236 

 524 

 548 

1 841 

– 

– 

 1 

– 

– 

– 

 0 

– 

– 

– 

 2 

– 

– 

– 

 3 

– 

– 

– 

 13 

– 

 3 

– 

 12 

– 

 3 

– 

 31 

– 

 68 

 130 

 285 

1 316 

2 685 

7 603 

12 575 

16 213 

40 874 

 1 

 1 

 0 

– 

 3 

– 

 3 

 3 

 1 

 0 

 3 

 23 

 267 

 724 

 796 

1 057 

2 870 

 1 

 1 

– 

 6 

– 

 5 

 4 

 1 

 0 

 5 

 1 

 9 

 2 

 7 

 20 

 0 

 12 

 85 

 0 

 20 

 141 

 0 

 43 

 256 

 2 

 101 

 337 

 651 

 593 

1 711 

 0 

 12 

 9 

 2 

 0 

 14 

– 

 15 

 13 

 5 

 2 

 34 

 10 

 16 

 21 

 14 

 7 

 73 

– 

 29 

 49 

 45 

 15 

 10 

 87 

 108 

 67 

 24 

 225 

 357 

 3 

 0 

– 

– 

 15 

– 

 2 

 7 

– 

 0 

 1 

 1 

 0 

 1 

– 

 7 

– 

 4 

 2 

– 

 0 

 2 

152 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

< 2013 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

Total 

EUR million 

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 

Specific Actions 

Total MFF Heading 4 

5  Pensions 

European schools 

Decentralised agencies 

Pilot projects and preparatory actions 

 4 

– 

 0 

 0 

 2 

– 

 0 

– 

 3 

– 

 1 

 0 

 5 

 0 

 2 

 0 

 13 

– 

 2 

 1 

 23 

 42 

 1 

 2 

 31 

 115 

 7 

 14 

 56 

 238 

 14 

 69 

 33 

 179 

 18 

 356 

 20 

 219 

 53 

 433 

1 223 

1 851 

2 552 

 646 

1 096 

1 518 

1 642 

2 826 

– 

– 

– 

– 

– 

 455 

 247 

 5 

 4 

 10 

– 

 1 

 3 

– 

 4 

 1 

 0 

– 

– 

– 

– 

– 

 266 

 303 

 9 

 5 

 13 

– 

– 

 5 

– 

 0 

– 

 1 

– 

– 

 2 

 6 

– 

– 

– 

 2 

 3 

– 

– 

– 

 1 

 1 

– 

 30 

– 

 2 

 4 

– 

 5 

– 

 3 

 4 

 0 

– 

 8 

 9 

 84 

 10 

 345 

 339 

 452 

 608 

 981 

 962 

1 302 

1 770 

2 424 

1 738 

2 049 

2 956 

 21 

 14 

 23 

 8 

 18 

 7 

– 

 7 

 0 

 1 

 23 

 23 

 36 

 10 

 18 

 11 

– 

 15 

 2 

 3 

 46 

 31 

 57 

 18 

 5 

 13 

– 

 28 

 0 

 11 

 62 

 56 

 97 

 75 

 29 

 14 

– 

 21 

 2 

 22 

 98 

 98 

 172 

 194 

 17 

 27 

 (0) 

 30 

 1 

 37 

 135 

 137 

 268 

 901 

 150 

 22 

 0 

 65 

 1 

 59 

 138 

 395 

 29 

 86 

6 183 

8 481 

 35 

– 

 17 

 28 

 95 

7 995 

9 203 

 400 

 367 

 676 

1 205 

 238 

 102 

 0 

 171 

 7 

 135 

 909 

 958 

1 010 

1 851 

3 253 

4 973 

6 231 

9 970 

29 154 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

– 

– 

– 

 1 

– 

 0 

– 

 2 

– 

 0 

– 

 4 

– 

 0 

– 

 6 

– 

– 

– 

– 

– 

– 

– 

– 

153 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

Programme 

< 2013 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

Total 

EUR million 

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 

– 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

0 

 0 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

0 

 1 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 0 

0 

 2 

– 

– 

– 

– 

– 

– 

– 

– 

– 

 335 

 511 

 851 

 335 

 511 

 854 

– 

– 

– 

– 

– 

– 

 1 

– 

 1 

– 

– 

– 

– 

– 

– 

 1 

– 

 1 

2 438 

4 746 

3 453 

7 904 

18 846 

59 723 

89 583  110 999 

297 693 

The set up of the new Commission involved an internal re-organisation of services. Re-allocating the related transactions resulted in a shift of outstanding amount between years. 
The overall amount of outstanding commitments remains unchanged. 

154 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.

  IMPLEMENTATION OF THE BUDGET BY INSTITUTION 

Annual accounts of the European Union 2019 

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 

 171 

 55 

 171 

 55 

 207 

 73 

 22 

 1 

 228 

 75 

 201 

 72 

 6 

 1 

 208 

 121 % 

 73 

 132 % 

 21 

 2 

Commission 

Court of Justice 

Court of Auditors 

Economic and Social Committee 

Committee of the Regions 

Ombudsman 

European Data Protection Supervisor 

European External Action Service 

147 824 

148 117 

169 322 

13 747 

183 069 

162 644 

 596 

163 240 

 110 % 

19 829 

 56 

 22 

 12 

 10 

 1 

 1 

 46 

 56 

 22 

 12 

 10 

 1 

 1 

 46 

 55 

 22 

 17 

 12 

 1 

 1 

 290 

 0 

– 

 0 

 0 

 0 

 0 

 1 

 55 

 22 

 17 

 12 

 1 

 1 

 55 

 22 

 17 

 12 

 1 

 1 

 290 

 288 

 0 

 0 

 0 

 0 

 0 

 0 

 1 

 55 

 22 

 17 

 12 

 1 

 1 

 98 % 

 103 % 

 134 % 

 121 % 

 90 % 

 87 % 

 289 

 623 % 

 0 

 0 

 0 

 0 

– 

– 

 2 

Total 

148 199 

148 492 

170 001 

13 770 

183 771 

163 314 

 604 

163 918 

110 % 

19 853 

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 are not consolidated within the EU budget and are not included in the EU budget reports. The Commission subsidy 
paid to the agencies however is part of the EU budget. In this budgetary part of the annual accounts, only the subsidy paid from the Commission budget to the 
Agencies is taken into consideration. 

Concerning the EEAS, it should be noted that, in addition to its own budget, it also receives contributions from the  Commission of EUR 152.7 million (2018: 
EUR 141.7 million) and the EDF and the Trust Funds of EUR 63.1 million (2018: EUR 70.1 million). These contributions cover 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)  to  cover  primarily  the  costs of  Commission  staff  working  in  the  EU  delegations,  these  delegations 
being administratively managed by the EEAS.   

155 

 
 
 
 
 
 
 
 
 
 
 
 
 
5.2.  IMPLEMENTATION OF COMMITMENT APPROPRIATIONS 

Annual accounts of the European Union 2019 

Institution 

Total 
appropriat. 
available 

Commitments made 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

% 

Appropriations carried over 
to 2020 
carry-
overs by 
decision 

from 
assigned 
revenue 

Total 

EUR million 

Appropriations lapsing 

from final 
adopted 
budget 

from 
carry-
overs 

from 
assigned 
revenue 

Total 

13=10+ 
11+12 

1 

2 

3 

4 

5=2+3+
4 

6=5/1 

7 

8 

9=7+8 

10 

11 

12 

European Parliament 

2 083 

1 973 

European Council and 
Council 

 621 

 537 

0 

0 

 60 

2 033 

 98 % 

 25 

 562 

 91 % 

 23 

 14 

0 

0 

 23 

 14 

 24 

 45 

0 

0 

 2 

 0 

 26 

 45 

Commission 

180 004 

161 120 

 473 

12 823  174 416 

 97 % 

4 055 

 598 

4 653 

 356 

 51 

 527 

 934 

Court of Justice 

Court of Auditors 

Economic and Social 
Committee 

Committee of Regions 

Ombudsman 

European Data-
protection Supervisor 

European External 
Action Service 

 431 

 147 

 143 

 101 

 11 

 17 

 424 

 144 

 136 

 98 

 11 

 15 

 996 

 694 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 4 

 2 

0 

 0 

 425 

 99 % 

 144 

 98 % 

 140 

 98 % 

 100 

 99 % 

 11 

 92 % 

 15 

 92 % 

 1 

 0 

 0 

 1 

0 

 0 

 246 

 940 

 94 % 

 55 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 0 

 1 

0 

 0 

 55 

 6 

 3 

 3 

 0 

 1 

 1 

 0 

0 

0 

0 

0 

0 

0 

0 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 6 

 3 

 3 

 0 

 1 

 1 

 1 

Sum: 

184 554  165 153 

 473  13 161  178 787 

97 % 

4 149 

 598 

4 747 

 438 

 51 

 530 

1 019 

156 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       
5.3.  IMPLEMENTATION OF PAYMENT APPROPRIATIONS  

Annual accounts of the European Union 2019 

Institution 

Total 
approp. 
availabl
e 

Payments made 

Appropriations carried over to 2020 

Appropriations lapsing 

EUR million 

from 
final 
adopted 
budget 

from 
carry- 
overs 

from 
assigned 
revenue 

Total 

% 

1 

2 

3 

4 

5=2+3+4 

6=5/
1 

automatic 
carry-
overs 

carry- 
overs 
by 
decision 

from 
assigned 
revenue 

7 

8 

9 

Total 

10=7+8
+9 

from 
final 
adopted 
budget 

from 
carry- 
overs 

from 
assigne
d 
revenue 

11 

12 

13 

Total 

14=11+12
+13 

European Parliament 

2 382 

1 699 

 284 

European Council and 
Council 

 682 

 484 

 53 

 52 

 24 

2 035   85 % 

 274 

 562   82 % 

 53 

0 

0 

 31 

 15 

 305 

 24 

 15 

 67 

 45 

 7 

 2 

 0 

 41 

 53 

Commission 

165 573 

142 633  1 152 

10 934 

154 719   93 % 

 682 

 470 

9 001 

10 154 

 592 

 86 

 22 

 700 

Court of Justice 

Court of Auditors 

Economic and Social 
Committee 

 452 

 155 

 151 

Committee of Regions 

 110 

Ombudsman 

European Data-
protection Supervisor 

European External 
Action Service 

 12 

 19 

 399 

 18 

 138 

 128 

 88 

 10 

 13 

 7 

 7 

 8 

 0 

 2 

 1 

 0 

 3 

 1 

0 

 0 

 418   93 % 

 25 

 144   93 % 

 138   91 % 

 7 

 8 

 97   88 % 

 11 

 11   90 % 

 15   81 % 

 0 

 2 

0 

0 

0 

0 

0 

0 

0 

 1 

 0 

 1 

 2 

0 

 0 

 25 

 7 

 9 

 13 

 0 

 2 

 6 

 3 

 3 

 0 

 1 

 1 

 3 

 1 

 2 

 1 

 0 

 0 

 93 

 177 

 0 

 10 

 0 

 0 

 0 

 0 

 0 

– 

 0 

 8 

 3 

 4 

 1 

 1 

 2 

 11 

1 143 

 610 

 135 

 210 

 956   84 % 

 84 

Total 

170 679  146 203  1 667  11 225  159 096  93 % 

1 145 

 470 

9 144  10 759 

 675 

 125 

 25 

 825 

157 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

6.

  IMPLEMENTATION OF THE AGENCIES' BUDGET 

The agencies’ revenue and expenditure, as shown in the reports 6.1 and 6.2 below, are not consolidated 
as such within the EU budget. In this budgetary part of the annual accounts, only the subsidy paid from 
the Commission budget to the Agencies is taken into consideration. 

The  EU  budget  implementation  reports  do  indeed  include  the  subsidy  paid  from  the  EU  budget  to  the 
agencies as commitment and payment appropriations, when applicable. 

The  agencies’  reports  below  show  an  overview  of  the  Agencies,  both  decentralised  (also  known  as 
traditional agencies) and executive agencies, and of their revenue (6.1) and expenditure (6.2). 

Other sources of revenue and their related expenditure are not added into the EU budget accounts. Each 
agency presents its own set of annual accounts. 

Funding MFF 
sub-heading 
3 

Final adopted 
budget 

EUR million 
Revenue 
received 

 138 

 140 

6.1.  BUDGET REVENUE  

Agency 

Agency for Operational Management of Large-Scale IT Systems 

Agency for the Cooperation of Energy Regulators 

Body of European Regulators for Electronic Communications 

Community Plant Variety Office 

Consumers, Health, Agriculture and Food Executive Agency 

1a 

1a 

N/A 

3 

Education, Audiovisual and Culture Executive Agency 

1a, 3, 4 

European Agency for Safety and Health at Work 

European Asylum Support Office 

European Banking Authority 

European Border and Coast Guard Agency 

European Centre for Disease Prevention and Control 

European Centre for the Development of Vocational Training 

European Chemicals Agency 

European Environment Agency 

European Fisheries Control Agency 

European Food Safety Authority 

European Global Navigation Satellite Systems (GNSS) Agency 

European Institute for Gender Equality 

European Institute of Innovation and Technology 

European Insurance and Occupational Pensions Authority 

European Maritime Safety Agency 

European Medicines Agency 

European Monitoring Centre for Drugs and Drug Addiction 

European Research Council 

European Securities and Markets Authority 

European Training Foundation 

European Union Agency for Criminal Justice Cooperation 

European Union Agency for Cybersecurity 

European Union Agency for Law Enforcement Cooperation 

European Union Agency for Law Enforcement Training 

European Union Agency for Railways 

European Union Aviation Safety Agency 

European Union Fundamental Rights Agency 

158 

1a 

3 

1a 

3 

3 

1a 

1a, 2 

2 

2 

3 

1a 

3 

1a 

1a 

1a 

3 

3 

1a 

1a 

4 

3 

1a 

3 

3 

1a 

1a 

3 

 16 

 6 

 18 

 11 

 51 

 16 

 103 

 45 

 333 

 59 

 19 

 116 

 52 

 17 

 80 

 36 

 8 

 416 

 27 

 79 

 347 

 16 

 52 

 45 

 21 

 39 

 16 

 138 

 9 

 28 

 196 

 22 

 16 

 6 

 18 

 11 

 51 

 16 

 103 

 46 

 350 

 59 

 19 

 112 

 52 

 17 

 80 

 768 

 8 

 416 

 27 

 97 

 340 

 18 

 52 

 47 

 21 

 40 

 17 

 143 

 17 

 29 

 171 

 23 

 
 
 
 
Annual accounts of the European Union 2019 

Agency 

European Union Intellectual Property Office 

Executive Agency for Small and Medium-sized Enterprises 

Foundation for Improvement of Living and Working Conditions 

Fusion for Energy Joint Undertaking 

Innovation and Networks Executive Agency 

Research Executive Agency 

Translation Centre for the Bodies of the European Union 

Funding MFF 
sub-heading 
N/A 

1a 

1a 

1a 

1a 

5 

5 

Final adopted 
budget 

EUR million 
Revenue 
received 

 252 

 49 

 21 

 576 

 29 

 76 

 47 

 259 

 49 

 22 

 729 

 29 

 76 

 37 

Total 

3 626 

4 533 

Type of revenue 

Commission subsidy 

Fee income 

Other income 

Total 

Final adopted 
budget 

Amounts 
received 

1 459 

1 471 

 726 

 732 

1 441 

2 331 

3 626 

4 533 

159 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

6.2.  COMMITMENT AND PAYMENT APPROPRIATIONS BY 

  AGENCY  

Agency 

EUR million 

Commitment 
appropriations 
Total 
appropr. 
available 

Commit. 
made 

Payment 
appropriations 
Total 
appropr. 
available 

Payments 
made 

Agency for Operational Management of Large-Scale IT Systems 

 355 

 178 

 219 

 133 

Agency for the Cooperation of Energy Regulators 

Body of European Regulators for Electronic Communications 

Community Plant Variety Office 

Consumers, Health, Agriculture and Food Executive Agency 

Education, Audiovisual and Culture Executive Agency 

European Agency for Safety and Health at Work 

European Asylum Support Office 

European Banking Authority 

European Border and Coast Guard Agency 

European Centre for Disease Prevention and Control 

European Centre for the Development of Vocational Training 

European Chemicals Agency 

European Environment Agency 

European Fisheries Control Agency 

European Food Safety Authority 

 16 

 6 

 20 

 11 

 51 

 16 

 109 

 48 

 357 

 59 

 18 

 16 

 6 

 19 

 11 

 51 

 15 

 94 

 45 

 346 

 59 

 18 

 19 

 6 

 19 

 13 

 56 

 21 

 118 

 54 

 446 

 70 

 20 

 16 

 5 

 16 

 11 

 49 

 17 

 96 

 46 

 318 

 58 

 19 

 115 

 112 

 130 

 110 

 73 

 17 

 81 

 60 

 17 

 81 

 92 

 20 

 88 

 59 

 17 

 79 

European Global Navigation Satellite Systems (GNSS) Agency 

1 164 

 325 

1 211 

 560 

European Institute for Gender Equality 

European Institute of Innovation and Technology 

European Insurance and Occupational Pensions Authority 

European Maritime Safety Agency 

European Medicines Agency 

European Monitoring Centre for Drugs and Drug Addiction 

European Research Council 

European Securities and Markets Authority 

European Training Foundation 

European Union Agency for Criminal Justice Cooperation 

European Union Agency for Cybersecurity 

 8 

 558 

 27 

 111 

 375 

 18 

 52 

 48 

 21 

 39 

 17 

 8 

 481 

 27 

 105 

 362 

 17 

 52 

 47 

 21 

 39 

 16 

 10 

 425 

 31 

 121 

 412 

 19 

 54 

 53 

 21 

 44 

 18 

 8 

 415 

 27 

 98 

 345 

 17 

 51 

 47 

 20 

 40 

 13 

European Union Agency for Law Enforcement Cooperation 

 155 

 150 

 169 

 144 

European Union Agency for Law Enforcement Training 

European Union Agency for Railways 

European Union Aviation Safety Agency 

European Union Fundamental Rights Agency 

European Union Intellectual Property Office 

Executive Agency for Small and Medium-sized Enterprises 

 17 

 30 

 256 

 24 

 455 

 49 

 12 

 30 

 189 

 23 

 249 

 48 

 21 

 32 

 267 

 29 

 477 

 52 

 14 

 29 

 163 

 23 

 240 

 47 

160 

 
 
 
 
 
 
Annual accounts of the European Union 2019 

Agency 

Foundation for Improvement of Living and Working Conditions 

Fusion for Energy Joint Undertaking 

Innovation and Networks Executive Agency 

Research Executive Agency 

Translation Centre for the Bodies of the European Union 

EUR million 

Commitment 
appropriations 
Total 
appropr. 
available 

Commit. 
made 

Payment 
appropriations 
Total 
appropr. 
available 

Payments 
made 

 23 

 730 

 29 

 76 

 46 

 22 

 728 

 29 

 76 

 43 

 26 

 761 

 30 

 82 

 49 

 21 

 739 

 29 

 75 

 42 

Total 

5 678 

4 225 

5 806 

4 253 

Type of expenditure 

Staff 

Administrative 

Operational 

Total 

EUR 
million 

Commitment 
appropriations 

Payment 
appropriations 

Total 
appropr. 
available 

Commit. 
made 

Total 
appropr. 
available 

Payments 
made 

1 269 

1 251 

1 288 

1 246 

 430 

 414 

 502 

 387 

3 979 

2 561 

4 016 

2 621 

5 678 

4 225 

5 806 

4 253 

161 

 
 
 
 
 
 
 
 
 
 
 
 
 
Annual accounts of the European Union 2019 

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. 

162 

 
 
 
Available for sale financial assets 

Annual accounts of the European Union 2019 

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. 

163 

 
Effective interest rate 

Annual accounts of the European Union 2019 

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" 

Outstanding commitments 

As  the  Reste  à  Liquider  (RAL),  they  represent  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. 

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Own resources 

Annual accounts of the European Union 2019 

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. 

Pre-financing 

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) 

As  the  Outstanding  commitments,  it  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. 

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Annual accounts of the European Union 2019 

LIST OF ABBREVIATIONS  

AAR 

Annual Activity Report 

AMIF  

Asylum, Migration and Integration Fund 

AOD  

Authorising Officers by Delegation 

ATM 

BOP 

Air Traffic Management 

Balance of Payments 

BUFI Fund 

Budget Fines Fund 

CAP 

Common Agricultural Policy 

CCS LGF 

Cultural and Creative Sector Guarantee Facility 

CEF 

Connecting Europe Facility 

CEF DI 

Connecting Europe Facility Debt Instrument 

CF 

CIP 

Cohesion Fund 

Competitiveness and Innovation Framework Programme 

COM 

European Commission 

COSME 

Competitiveness of Enterprises and Small and Medium-sized Enterprises 

COSO 

Committee of Sponsoring Organizations of the Treadway Commission 

CPR 

Common Provisions Regulation 

D&WM 

Decommissioning and Waste Management 

EAFRD 

European Agricultural Fund for Rural Development 

EAGF  

European Agricultural Guarantee Fund 

EAR 

EaSI 

European Union Accounting Rule 

Employment and Social Innovation 

EBRD 

European Bank for Reconstruction and Development 

ECA 

ECB  

European Court of Auditors 

European Central Bank 

ECOFIN 

Economic and Financial Affairs Council 

ECSC i.L.  

European Coal and Steel Community in Liquidation 

EDF 

EDIF 

European Development Fund 

Guarantee Facility under the Western Balkan 

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Annual accounts of the European Union 2019 

EEA 

EEAS 

EFSD 

European Economic Area 

European External Action Service 

European Fund for Sustainable Development 

EFSE  

European Fund for Southeast Europe 

EFSF  

European Financial Stability Facility 

EFSI 

EFSM 

European Fund for Strategic Investments 

European Financial Stabilisation Mechanism 

EFTA  

European Free Trade Association 

EGNOS  

European Geostationary Navigation Overlay System 

EIB  

EIF  

European Investment Bank 

European Investment Fund 

ElectriFI 

Electrification Financing Initiative  

ELM 

External Lending Mandate 

EMFF  

European Maritime and Fisheries Fund 

EMU  

Economic and Monetary Union 

ENEF  

Enterprise Expansion Fund 

ENIF  

ENPI  

EP  

Enterprise Innovation Fund 

European Neighbourhood and Partnership Instrument 

European Parliament 

ERDF  

European Regional Development Fund 

ERI 

ESA  

ESF  

ESIF  

ESM  

ETF  

EU  

EIB Resilience Initiative 

European Space Agency 

European Social Fund 

European Structural and Investment Funds 

European Stability Mechanism 

European Technology Start up Facility 1998 

European Union 

EUMETSAT  

European Organisation for the Exploitation of Meteorological Satellites 

Euratom 

European Atomic Energy Community 

FIFO 

FP7  

First-in, First-out 

7th Research Framework Programme for Research and Technological Development 

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Annual accounts of the European Union 2019 

FR  

EU Financial Regulation 

FSDA  

Financial Statement Discussion and Analysis 

GDP 

GNI  

Gross Domestic Product 

Gross National Income 

GNSS  

Global Navigation Satellite Systems 

H2020  

Horizon 2020 

IIW  

IMF  

Infrastructure and Innovation Window 

International Monetary Fund 

IPSAS 

International Public Sector Accounting Standards 

IT  

Information Technology 

ITER  

International Thermonuclear Experimental Reactor 

JRC  

JU  

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 

ORD  

PBI  

Own Resources Decision 

Project Bond Initiative 

PF4EE  

Private Finance for Energy Efficiency Instrument 

PGF  

PPP  

Participants Guarantee Fund 

Public-Private Partnership 

PSEO  

Pension Scheme of European Officials  

RAL 

"Reste à Liquider" (Outstanding Commitments) 

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  

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Annual accounts of the European Union 2019 

SEMED  

Southern and Eastern Mediterranean Micro, Small and Middle sized Entreprises Financial 
Inclusion Programme 

SIUGI  

SME Initiative Uncapped Guarantee Instrument 

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  

Value Added Tax 

169