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 2022
Date: 2023-10-12
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




C_202300002EN.000101.fmx.xml












Official Journal of the European Union


EN
Series C













C/2023/2


12.10.2023







            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 2022
(C/2023/2)


CONTENTS






FOREWORD
2








FINANCIAL HIGHLIGHTS OF THE YEAR
3








NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS
33








CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
34








BALANCE SHEET
35








STATEMENT OF FINANCIAL PERFORMANCE
36








CASHFLOW STATEMENT
37








STATEMENT OF CHANGES IN NET ASSETS
38








NOTES TO THE FINANCIAL STATEMENTS
39








BUDGETARY IMPLEMENTATION REPORTS AND EXPLANATORY NOTES
140








GLOSSARY
226








LIST OF ABBREVIATIONS
230



FOREWORD
In 2022, the European Union proved once again its power of unity to respond to unprecedented challenges. European solidarity was our response to Russia’s brutal war. On one hand, we have stood by our Ukrainian partners and sought to mitigate the impact of this unlawful and arbitrary war, which affected the daily lives of millions of Ukrainians. On the other hand, we have addressed the direct and indirect consequences for our citizens, businesses and Member States. That is why we have mobilised all available means in the EU budget and under the European Peace Facility to complement support directly provided by the Member States.
The current geopolitical situation has emphasised the importance of a sustainable and diversified source of energy supply. In this context, our dedicated recovery instrument NextGenerationEU proved to be an important tool to further accelerate the green and the digital transition. At the same time, NextGenerationEU has been instrumental for the growth of the EU into the large scale-sovereign style issuer. By implementing unified EU borrowing strategy, the Commission sent a very important signal to financial markets: it showed EU solidarity and has generated confidence in the resilience of the euro area.
In addition, the SURE programme (Support to Mitigate Unemployment Risks in an Emergency) continued to support Member States to maintain people in work and help jobs affected by the pandemic. At the end of 2022, its final year, Member States had signed loan facility agreements of EUR 98,4 billion Euro, all of which were disbursed supporting more than 30 million people and 2,5 million companies across 19 different Member States.
On top of tackling the crisis with rapid responses and ongoing adjustments to the political and financial situation, the European Union kept its promise and delivered on its overall policy objectives. In 2022, the second year of the MFF 2021–2027, it made the best use of the 2022 budget, with commitment implementation amounting to 357,1 billion Euro.
Thanks to the EU budget, the European Union could stand up to its challenges. Therefore, it is my pleasure to present the 2022 annual accounts of the European Union, which will illustrate this in detail. They provide a complete overview of EU finances, including information on contingent liabilities, financial commitments and other obligations of the Union, as well as on the implementation of the EU budget for the past year. The consolidated annual accounts of the European Union are part of the Commission’s integrated financial and accountability reporting package and form an essential part of our highly developed system of fiscal transparency and accountability.



Johannes HAHN
                  

Commissioner for Budget and Human Resources





FINANCIAL HIGHLIGHTS OF THE YEAR







The objective of this Financial Highlights section, which has been prepared on the basis of the principles outlined in the IPSASB Recommended Practice Guideline (RPG) 2 ‘Financial Statement Discussion and Analysis’ is to assist readers to understand how the operational, financial and investment activities of the EU are reflected in the different elements of the consolidated financial statements of the EU. The information presented in this section has not been audited.


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





CONTENTS







1.

KEY FIGURES AND HIGHLIGHTS OF THE YEAR
4










2.

THE 2021–2027 MULTIANNUAL FINANCIAL FRAMEWORK AND NextGenerationEU
6










2.1.

MFF 2021–2027 & NextGenerationEU — Key Figures
6










2.2.

NextGenerationEU — overview
7










2.3.

Financial situation of NGEU at 31 December 2022
8










3.

SUMMARY OF BUDGET IMPLEMENTATION
13










3.1.

Revenue
13










3.2.

Expenditure
14










4.

FINANCIAL INSTRUMENTS AND BUDGETARY GUARANTEES
16










4.1.

Financial instruments financed by the EU budget
16










4.2.

Budgetary guarantees: Financial assets held in guarantee funds
16










4.3.

Loans and related borrowings for financial assistance programmes
17










4.4.

Budgetary contingent liabilities for financial assistance programmes
21










5.

FINANCIAL STATEMENTS ANALYSIS
21










5.1.

REVENUE
21










5.2.

EXPENSES
22










5.3.

ASSETS
23










5.4.

LIABILITIES
26










6.

EU POLITICAL AND FINANCIAL FRAMEWORK, GOVERNANCE AND ACCOUNTABILITY
28










6.1.

POLITICAL AND FINANCIAL FRAMEWORK
28










6.2.

GOVERNANCE AND ACCOUNTABILITY
30



1.   KEY FIGURES AND HIGHLIGHTS OF THE YEAR

Consolidated financial statements

The consolidated ﬁnancial statements of the EU comprise more than 50 entities (including the European Parliament, the Council, the Commission and EU agencies). They are prepared on the basis of accrual-based accounting rules adopted by the Accounting Officer of the Commission, these rules being based on International Public Sector Accounting Standards (IPSAS).
As can be seen on the balance sheet below and further detailed in the Financial Statements Analysis (Section 5), the 2022 EU consolidated financial statements were particularly marked by an increase of borrowings due to the continued implementation of NextGenerationEU and the Support to mitigate Unemployment Risks in an Emergency (SURE) instrument, as well as the additional financial support provided to Ukraine:







(EUR billion)




 


2022


2021





ASSETS



 


 




Financial Assets


235,4 


188,6 




Pre-financing


100,5 


93,4 




Receivables


48,2 


72,4 




Cash and cash equivalents


46,5 


44,9 




Property, Plant and Equipment and other assets


15,2 


14,7 





Total




445,9 




414,1 






LIABILITIES



 


 




Post-employment benefits


80,6 


122,5 




Financial liabilities


352,3 


246,1 




Payables


55,3 


46,4 




Accruals


86,2 


78,1 




Other liabilities


2,8 


3,3 





Total




577,2 




496,4 






NET ASSETS



 


 




Reserves


1,3 


1,3 




Amounts to be called from Member States


(132,6 )


(83,6 )





Total




(131,3 )




(82,3 )











⇨


see Financial Statement Analysis, Section 5










Key developments in 2022


Continuing the successful track record of bond issuances










⇨


see Section 4













Delivering on the NGEU obectives



 



Providing financial assistance to Ukraine












 

















⇨


see Section 2







 








⇨


see Section 4









2.   THE 2021–2027 MULTIANNUAL FINANCIAL FRAMEWORK AND NextGenerationEU
2.1.   MFF 2021–2027 & NextGenerationEU — KEY FIGURES

The EU’s 2021–2027 long-term budget, together with the NextGenerationEU (NGEU) recovery instrument, amounts to EUR 2,018 trillion in current prices (EUR 1,8 trillion in 2018 prices).
The package consists of the long-term budget, the 2021–2027 multiannual financial framework (MFF), made up of EUR 1,211 trillion in current prices (EUR 1,074 trillion in 2018 prices), combined with the temporary recovery instrument, NGEU of up to EUR 806,9 billion in current prices (EUR 750 billion in 2018 prices).





The budget has been designed as a response to Europe’s priorities and most urgent needs:






—


More than 50 % of the total amount of the next long-term budget and NGEU will support the modernisation of the European Union through research and innovation, fair climate and digital transitions, preparedness, and recovery and resilience actions;










—


30 % of the EU budget will be spent to fight climate change — the highest share of the largest EU budget ever;










—


20 % of the Recovery and Resilience Facility (RRF) — which accounts for 90 % of NGEU — will be invested in digital transformation;










—


In 2026 and 2027, 10 % of the annual spending under the long-term budget will contribute to halting and reversing the decline of biodiversity; and










—


For the first time ever, new and reinforced priorities have the highest share within the long-term budget, 32 %.




Following Russia’s war of agression against Ukraine, the EU budget turned into a key instrument to support the EU’s crisis response and strategic autonomy building. More concretely, in a ‘Team Europe’ approach, the EU, its Member States and financial institutions, had by the end of 2022 together mobilised close to EUR 50 billion in overall support for Ukraine, in a clear expression of the EU’s continued solidarity with the people of Ukraine.
This included:






—


EUR 18,9 billion in financial assistance, budget support and humanitarian assistance, enabled by the EU budget and directly from EU Member States in grants, loans and guarantees;










—


An EUR 18 billion package to support Ukraine’s economy, to be paid out in 2023; and










—


EUR 3,2 billion in military assistance under the European Peace Facility and EUR 7 billion directly by the EU Member States (both the European Peace Facility and the direct support by Member States are not part of the EU budget).




2.2.   NextGenerationEU — OVERVIEW

With a budget of EUR 806,9 billion, NGEU is designed to help repair the immediate economic and social damage brought about by the coronavirus pandemic, thus building a post-COVID-19 Europe that is greener, more digital, more resilient and better fit for the current and forthcoming challenges.
A majority of the funds is channeled through the Recovery and Resilience Facility (RRF). Part of the funds, up to EUR 338,0 billion, are provided in the form of non-repayable support, or grants. The other part, up to EUR 385,8 billion, is used to provide loans from the Union to individual Member States. These loans will be repaid by those Member States starting only after the current MFF period and extending over a long time period, with the final maturity of the loans outstanding at 31 December 2022 ending only as from 2052 (see Section 2.3.3).
In addition, NGEU reinforces several existing EU programmes and policies, as follows:






—


The Cohesion policy under the recovery assistance for cohesion and the territories of Europe (REACT-EU), to help address the economic consequences of COVID-19 in the first years of the recovery;










—


The Just Transition Fund, to guarantee that the transition to climate neutrality works for all;










—


The European Agricultural Fund for Rural Development, to further support farmers;










—


InvestEU, to support the investment efforts of our businesses;










—


Horizon Europe, to make sure the EU has the capacity to fund more excellence in research; and










—


RescEU, safeguards that the EU Civil Protection Mechanism has the capacity to respond to largescale emergencies.









In addition, following Russia’s war of aggression against Ukraine and the resulting energy crisis, the Commission put forward REPowerEU, the European Commission’s plan to make Europe independent from Russian fossil fuels well before 2030. Under REPowerEU, Member States add a REPowerEU chapter to their national Recovery and Resilience Plans (RRPs) — the roadmaps to funding under the Recovery and Resilience Facility — to finance key investments and reforms in diversifying energy supplies and reducing dependence on Russian fossil fuels. REPowerEU does not increase the overall envelope for the RRF, but will accelerate the deployment of the current borrowing capacity by offering Member States the possibility to request additional loans under NGEU for REPowerEU objectives. REPowerEU is complemented by grants financed by the auctioning of ETS allowances and transfers from the Brexit Adjustment Reserve.
2.3.   FINANCIAL SITUATION OF NGEU AT 31 DECEMBER 2022
                           

2.3.1.   Overview

From the launch of the NGEU funding operations on 15 June 2021 to the end of 2022, the Commission has raised EUR 170,8 billion of long-term funding (nominal amount), mainly by issuing bonds in syndicated transactions (2021: EUR 71,0 billion). In addition, as of December 2022, the Commission has EUR 17,0 billion of short-term EU-Bills outstanding. Up to year-end 2022, the Commission had disbursed a total of EUR 162,0 billion of financial support (2021: EUR 71,6 billion). The majority of this amount, EUR 138,7 billion, was disbursed under the RRF, with EUR 93,5 billion disbursed as non-repayable support and EUR 45,2 billion disbursed as financial loan support. A further EUR 23,3 billion (net of recoveries of EUR 0,2 billion) was disbursed as MFF payments under existing programmes. Furthermore, liquidity of EUR 20,5 billion is held in the NGEU bank account with the ECB and in the Commission’s central treasury account, pending disbursement to the budget for MFF programmes.
NGEU — Outstanding Borrowings and Disbursements at 31 December 2022
                           





2.3.2.   Borrowings

To meet the NGEU funding needs, the Commission issues securities on the international capital markets. Based on a unified funding approach, the Commission combines the use of different funding instruments and funding techniques with an open and transparent communication to market participants.
In 2022, the annual Borrowing Decision allowed the Commission to issue up to a maximum amount of EUR 140 billion in long-term funding and to have up to a maximum outstanding amount of EUR 60 billion in short-term funding (1).

Long-term funding — Syndicated transactions and auctioning of EU bonds

As of 31 December 2022, the outstanding (nominal) amount of long-term funding was EUR 170,8 billion (2021: EUR 71,0 billion). Out of this amount, EUR 36,4 billion related to green bonds (2021: EUR 12 billion). The borrowings will mature between 2025 and 2052 as follows:








(EUR billion)




Maturity


Issued/Raised


Total repaid at year-end


Outstanding at year-end




2025


11,2 


0,0 


11,2 




2026


18,9 


0,0 


18,9 




2027


9,3 


0,0 


9,3 




2028


14,0 


0,0 


14,0 




2029


10,0 


0,0 


10,0 




2031


20,0 


0,0 


20,0 




2032


14,9 


0,0 


14,9 




2033


6,0 


0,0 


6,0 




2037


18,4 


0,0 


18,4 




2041


13,0 


0,0 


13,0 




2042


4,0 


0,0 


4,0 




2043


7,0 


0,0 


7,0 




2048


5,0 


0,0 


5,0 




2051


14,0 


0,0 


14,0 




2052


5,0 


0,0 


5,0 




 



170,8 




0,0 




170,8 






Short-term funding — Auctioning of EU-Bills

The auctioning of EU-Bills gives extra flexibility to the Commission as an issuer, and is supporting the liquidity of its securities. As of 31 December 2022, the outstanding (nominal) amount of short-term funding, raised via the auctioning of EU-bills with a maturity of three or six months, amounted to EUR 17,0 billion (2021: EUR 20,0 billion).
2.3.3.   Disbursements

During 2022 the Commission positively assessed the five remaining Member States’ recovery and resilience plans (Bulgaria, Hungary, Netherlands, Poland and Sweden), which were subsequently approved by the Council. As a consequence, all 27 Member States’ recovery and resilience plans were endorsed by year-end 2022. The total non-repayable support approved under the 27 Member States’ plans amounted to EUR 335,1 billion (2021: EUR 291,2 billion), corresponding to almost the whole financial envelope of NGEU non-repayable support of EUR 338,0 billion (2). Out of this amount, EUR 234,4 billion were covered by financing agreements signed with Member States (2021: EUR 195,4 billion). The total financial loan support approved under the plans amounted to EUR 165,3 billion (2021: EUR 153,9 billion), of which the loan agreements signed by year-end covered EUR 153,9 billion (2021: EUR 153,2 billion).

Non-repayable support

By year-end 2022, the Commission had disbursed a total of EUR 93,5 billion of non-repayable support to 22 Member States (2021: EUR 46,4 billion to 20 Member States). Out of this amount, EUR 36,6 billion related to pre-financing (2021: EUR 36,4 billion) and EUR 56,9 billion related to payments made following the fulfilment of milestones and targets by Member States (2021: EUR 10,0 billion):










(EUR billion)




Member State


Maximum non-repayable support (1)



Signed commitments and budgetary commitments 31.12.2022 (†)



Disbursed as pre-financing 31.12.2022


Milestone payments 31.12.2022


Total disbursed at 31.12.2022




Austria


3,8 


2,2 


0,4 


—


0,4 




Belgium


4,5 


3,6 


0,8 


—


0,8 




Bulgaria


5,7 


4,6 


—


1,4 


1,4 




Croatia


5,5 


4,6 


0,8 


1,4 


2,2 




Cyprus


0,9 


0,8 


0,1 


0,1 


0,2 




Czechia


7,7 


3,5 


0,9 


—


0,9 




Denmark


1,4 


1,3 


0,2 


—


0,2 




Estonia


0,9 


0,8 


0,1 


—


0,1 




Finland


1,8 


1,7 


0,3 


—


0,3 




France


37,5 


24,3 


5,1 


7,4 


12,5 




Germany


28,0 


16,3 


2,3 


—


2,3 




Greece


17,4 


13,5 


2,3 


1,7 


4,0 




Hungary


5,8 


4,6 


—


—


—




Ireland


0,9 


0,9 


—


—


—




Italy


69,0 


47,9 


9,0 


20,0 


29,0 




Latvia


1,8 


1,6 


0,2 


0,2 


0,4 




Lithuania


2,1 


2,1 


0,3 


—


0,3 




Luxembourg


0,1 


0,1 


0,0 


—


0,0 




Malta


0,3 


0,2 


0,0 


—


0,0 




Netherlands


4,7 


3,9 


—


—


—




Poland


22,5 


20,3 


—


—


—




Portugal


15,5 


9,8 


1,8 


0,6 


2,4 




Romania


12,1 


10,2 


1,9 


1,8 


3,6 




Slovakia


6,0 


4,6 


0,8 


0,4 


1,2 




Slovenia


1,5 


1,3 


0,2 


—


0,2 




Spain


77,2 


46,6 


9,0 


22,0 


31,0 




Sweden


3,2 


2,9 


—


—


—





Total




338,0 




234,4 




36,6 




56,9 




93,5 





During 2022 the Commission disbursed non-repayable support totalling EUR 47,2 billion. This amount mainly comprised the first milestone payment to France (EUR 7,4 billion), the first and second milestone payments to Italy (EUR 10,0 billion each), and the second milestone payment to Spain (EUR 12,0 billion).

Loans

By year-end 2022, the Commission had disbursed EUR 45,2 billion of financial loan support to five Member States (2021: EUR 18,0 billion to four Member States). Out of this amount, EUR 19,9 billion related to pre-financing (2021: EUR 18,0 billion) and EUR 25,2 billion related to loan instalments made following the fulfilment of milestones and targets by Member States (2021: nil):










(EUR billion)




Member State


Maximum financial loan support


Total signed at 31.12.2022


Disbursed as prefinancing 31.12.2022


Milestone payments 31.12.2022


Total outstanding at 31.12.2022




Cyprus


0,2 


0,2 


0,0 


—


0,0 




Greece


12,7 


12,7 


1,7 


1,8 


3,5 




Italy


122,6 


122,6 


15,9 


22,0 


37,9 




Portugal


2,7 


2,7 


0,4 


0,6 


1,0 




Romania


14,9 


14,9 


1,9 


0,8 


2,7 




Poland


11,5 


0,0 


—


—


—




Slovenia


0,7 


0,7 


—


—


—





Approved




165,3 




153,9 




19,9 




25,2 




45,2 






Reserve




220,5 



—


—


—


—




 



385,8 




153,9 




19,9 




25,2 




45,2 





During 2022 the Commission provided financial loan support totalling EUR 27,2 billion. This amount comprised the loan pre-financing of EUR 1,9 billion to Romania, the payment of the first loan instalments to Greece (EUR 1,8 billion), Italy (EUR 11,0 billion), Portugal (EUR 0,6 billion) and Romania (EUR 0,8 billion), as well as the payment of the second loan instalment to Italy (EUR 11,0 billion).
According to the loan agreements, Member States will make annual repayments of 5 % of the disbursed amounts starting ten years after the disbursement date. Thus Cyprus, Greece, Italy and Portugal will start repaying the loans as from 2032 and Romania as from 2033. The repayment schedule for the nominal amounts outstanding at year-end is as follows:








(EUR million)




Member State


Repayment period


Annual repayment


Total repayment




Cyprus


2032–2051


1


26




Greece


2032–2052


175


3 500 




Italy


2032–2052


1 897 


37 938 




Portugal


2032–2052


48


960




Romania


2033–2052


137


2 732 




 


 



2 258 




45 156 






NGEU contribution to other programmes under the EU budget

By year-end 2022, the total net payments disbursed to other programmes under the MFF amounted to EUR 23,3 billion (2021: EUR 7,2 billion). This contribution, which is net of recoveries of EUR 0,2 billion, mainly related to REACT-EU which finances the European Regional Development Fund (ERDF) and the European Social Fund (ESF, including FEAD):








(EUR billion)




MFF-Programme


Total allocation


Total net commitments 31.12.2022†


Total net payments 31.12.2022




REACT-EU


50,6 


50,5 


18,2 










—


of which ERDF






30,0 


29,9 


13,6 










—


of which ESF (incl. FEAD)






20,6 


20,6 


4,6 




Just Transition Fund


10,9 


5,0 


0,2 




Rural Development (EAFRD)


8,1 


8,1 


1,3 




InvestEU


6,1 


3,6 


1,4 




Horizon Europe


5,4 


3,5 


1,9 




RescEU


2,0 


0,9 


0,3 





Total




83,1 




71,6 




23,3 





During 2022, the Commission disbursed payments to other MFF programmes totalling EUR 16,1 billion. This amount comprised mainly the payments relating to REACT-EU (EUR 11,2 billion, of which EUR 8,7 billion under the ERDF and EUR 2,5 billion under the ESF, including FEAD), Horizon Europe (EUR 1,9 billion), InvestEU (EUR 1,2 billion) as well as Rural Development (EUR 1,2 billion).
2.3.4.   Liquidity

Loans provided under NGEU do not follow the strict back-to-back principle used in the past. Instead, a diversified and pooled funding strategy has been developed for the NGEU that has required the implementation of an efficient liquidity management. The objective of the NGEU liquidity management is to ensure that the amounts held on the NGEU bank account are sufficient to meet all upcoming disbursement needs and to maintain a defined safety buffer, while avoiding any excess balances. For the liquidity management, the Commission has developed an IT tool that allows for the monitoring of the NGEU account on a daily basis. At year-end 2022 the funds held in the NGEU off-budget account amounted to EUR 19,9 billion. In addition, EUR 0,6 billion of funds were held in the Commission’s central treasury account pending disbursement to the budget for MFF-programmes (including EUR 0,2 billion of recovered NGEU funds previously paid).
Following the success of the diversified funding strategy for NGEU and the growing recurrence to borrowing to secure funding for EU policy priorities, the Commission decided in 2022 to start using the unified funding approach as a main funding method as of 2023. Under this approach, the Commission — on behalf of the EU — will henceforth issue only ‘EU-Bonds’ rather than separately denominated bonds for individual programmes. The NGEU recovery programme and the new Macro-Financial Assistance + programme for Ukraine of EUR 18 billion for 2023 are the first programmes to benefit from the new funding approach.








3.


SUMMARY OF BUDGET IMPLEMENTATION




3.1.   REVENUE

In the initial adopted EU budget, total payment appropriations amounted to EUR 170 603 million and the amount to be financed by own resources totalled EUR 157 701 million. The revenue and expenditure estimates in the initial budget are typically adjusted during the budgetary year by way of 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 2022, five amending budgets were adopted. Taking them into account, the final adopted revenue for 2022 amounted to EUR 170 038 million and the total amount financed by own resources amounted to EUR 153 928 million. Member States’ contributions in 2022 were mainly reduced by the surplus of the previous year (EUR 3 227 million). The level of payment appropiations remained more or less in line with the initial voted budget.
Revenue comes from six sources (titles):

Title 1: Own resources

The collection of traditional own resources was above the amounts forecasted in the budget. This was due mainly to a higher than expected collection in the last months of the year.
Member States’ final VAT, GNI and Plastics payments corresponded 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 drawing up the budget and the rates in force at the time when the Member States outside the euro area actually made their payments.

Title 2: Surpluses, balances and adjustments

The surplus of the previous financial year amounted to EUR 3 227 million. This amount was inscribed in the budget 2022 through an amending budget and the own resources contributions from the Member States were reduced accordingly.
For the VAT and GNI balances, the rules are set out in Article 10b of the Making Available Regulation (Council Regulation (EU, Euratom) No 609/2014) (3). According to these rules the total sum of the balances are calculated in order for the impact on the EU budget to be zero (‘netting system’) and the procedure does not entail a budgetary amendment. The Commission therefore directly requests the Member States to pay the net amounts in accordance with the rules of the Making Available Regulation.

Title 3: Administrative revenue

This title comprises mainly revenue from taxes and levies on the remuneration of staff.

Title 4: Financial revenue, default interest and fines

The main part of this title relates to the fines in connection with the implementation of competition rules.

Title 5: Budgetary guarantees, borrowing and lending operations

This title has increased significantly with the advent of the NextGenerationEU (NGEU). NGEU funds within this title are assigned revenue. Title 5 covers revenue related to guarantees, interest and repayments of loans granted. It also channels funds (for the NGEU non-repayable support under the Recovery and Resilience Facility and for reinforcement of MFF programmes) from earmarked revenue that Member States receive under the European Union Recovery Instrument (EURI).

Title 6: Revenue, contributions and refunds related to Union policies

This title concerns mainly revenue from financial corrections related to structural and agricultural funds (ESIF, EAGF and EAFRD). It also includes 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 gives rise to the entering of additional appropriations on the expenditure side.
Total 2022 budget revenue amounted to EUR 245 265 million:





3.2.   EXPENDITURE

3.2.1.   Budget implementation

In 2022, the second year of the MFF 2021–2027, the final adopted budget amounted to EUR 182,2 billion of commitment appropriations and EUR 170,0 billion of payment appropriations. In addition, EUR 295,0 billion of commitment appropriations were available as assigned revenue, out of which EUR 277,8 billion related to the NGEU (4), and EUR 4,5 billion of commitment appropriations were carried over from 2021. The payment appropriations related to 2022 assigned revenue amounted to EUR 87,0 billion, out of which EUR 64,3 billion related to the NGEU and EUR 4,3 billion of payment appropriations were carried over from 2021.
The implementation of the 2022 budget was still partly impacted by the late adoption of the MFF Regulation (December 2020), which led to the adoption of the legal acts of the new generation of programmes only in the course of 2021. Moreover, the implementation of the 2022 budget was heavily affected by the invasion of Ukraine by Russia and the need to take resolute actions to provide complex humanitarian and financial support to Ukraine, help refugees as well as countries hosting them, and to respond to a crisis that had consequences beyond Ukrainian borders.
The implementation of the total commitment appropriations in 2022 amounted to EUR 357,1 billion:






—


EUR 179,4 billion from the final adopted budget;










—


EUR 4,5 billion from appropriations carried-over or made available again from 2021;










—


EUR 173,2 billion from appropriations stemming from assigned revenue;






—


of which EUR 162,7 billion from NGEU.








The implementation of the total payment appropriations in 2022 amounted to EUR 243,3 billion:






—


EUR 167,3 billion from the final adopted budget;










—


EUR 4,2 billion from appropriations carried-over or made available again from 2021;










—


EUR 71,8 billion from appropriations stemming from assigned revenue;






—


of which EUR 63,5 billion from NGEU.








In cases allowed by the Financial Regulation and/or legal bases, the appropriations of the voted budget that were not implemented in 2022 were carried over to 2023: EUR 1,5 billion of commitment appropriations and EUR 2,5 billion of payment appropriations.
Likewise, EUR 121,5 billion of commitment appropriations of assigned revenue, of which EUR 115,1 billion related to the NGEU, and EUR 15,2 billion of payment appropriations of assigned revenue, of which EUR 0,8 billion related to the NGEU, were carried over to 2023 in accordance with the Financial Regulation.
Total 2022 commitment appropriations implementation per EU policy objectives were as shown below:





The 2022 implementation for all types of appropriations (budget, carry-overs from previous year and assigned revenue) was 74 % for commitments and 93 % for payments. Implementation rates including the appropriations carried over to 2023 (in accordance with the Financial Regulation and/or legal bases) reached 99 % for commitment appropriations and 100 % for payment appropriations of the voted budget for 2022.
In 2022, the annual tranche of commitments under NGEU (5) was EUR 144,6 billion. In addition, EUR 21,1 billion of commitments were carried over from 2021. In total, EUR 165,7 billion was available for commitments in 2022, out of which 162,7 billion, or 98 %, were consumed. The remaining EUR 114 billion of the NGEU total envelope are planned for implementation in 2023 (and in later years for administrative appropriations which can be implemented until 2027). In line with Art. 3(4) of EURI Regulation (EU) 2020/2094 (6), over 60 % of legal commitments for the relevant programmes under NGEU (with the exception of InvestEU and Recovery and Resilience Facility (RRF) loans) were entered into by 31 December 2022. The implementation of the NGEU payment appropriations reached 99 %.
3.2.2.   Outstanding commitments

Outstanding commitments (commonly referred to as RAL — reste à liquider), which correspond to amounts committed but not yet paid for, stood at EUR 452,8 billion at the end of 2022. The outstanding commitments increased as compared to 2021 (by EUR 111,2 billion).
The main driver of the 2022 increase of the RAL was the NGEU (non-repayable part) implementation, contributing EUR 189,1 billion (42 %) to the total RAL at the end of 2022. As the NGEU appropriations will be committed until 31 December 2023 and paid by 31 December 2026, in accordance with Articles 3(4) and 3(9) of the EURI Regulation, the trend of nominally growing RAL linked to NGEU will continue in 2023.
3.2.3.   Budget result

The budget result (surplus) decreased from EUR 3,2 billion in 2021 to EUR 2,5 billion in 2022. A major contributor to the budget result (surplus) 2022 was higher than expected revenue from the customs duties.
4.   FINANCIAL INSTRUMENTS AND BUDGETARY GUARANTEES
4.1.   FINANCIAL INSTRUMENTS FINANCED BY THE EU BUDGET

Financial instruments financed by the EU budget exist in the form of guarantee instruments, equity instruments and loan instruments. Under the 2021–2027 MFF the use of budgetary guarantees is expected to increase in comparison to the use of financial instruments fully financed or provisioned from the EU budget. In particular, under the InvestEU Programme, EUR 26,2 billion of EU guarantees will be provided to the EIB group and other financial institutions to support various policy objectives of the Union by means of financing investment operations. 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 support due to the leverage effect.
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 investments in money market funds or pooled portfolios of assets) to cover future guarantee calls or have been invested in equity. The significance and volume of financial instruments financed by the EU budget under direct and indirect management has been increasing in recent years.
4.2.   BUDGETARY GUARANTEES: FINANCIAL ASSETS HELD IN GUARANTEE FUNDS

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. This creates contingent liabilities for the EU budget, in case the provisioning is not sufficient to cover the calls. The EU has given guarantees to the EIB Group for loans granted outside of the EU (the so-called External Lending Mandate, or ELM) and on debt and equity operations covered by the EFSI guarantee. The EU has also given guarantees to the EIB Group and other financial institutions for operations covered by the EFSD, the NDICI-External Action Guarantee and InvestEU.
As of 2021, the provisioning is held in the Common Provisioning Fund (CPF). The CPF is established by the Financial Regulation (7) to hold the provisioning made (i.e. funds held) to cover financial liabilities arising from financial instruments, budgetary guarantees and financial assistance loans as of the 2021–2027 MFF. It also includes some assets of provisioning for financial liabilities from previous MFFs.
The CPF is created and functions as a single portfolio, currently combining provisioning for all the EU budgetary guarantees and some financial assistance programmes. The resources of the CPF are allocated into compartments for the purpose of tracing the amounts relating to the contributing budgetary guarantees and financial assistance programmes.
At 31 December 2022, the Commission holds financial assets in the CPF for the following compartments:






—


Guarantee Fund for external actions — EUR 2,5 billion










—


EFSI — EUR 8,5 billion










—


EFSD — EUR 0,7 billion










—


NDICI EFSD+ — EUR 1,1 billion










—


InvestEU EU compartment — EUR 1,7 billion










—


InvestEU MS compartment Czech Republic — 14 million










—


InvestEU MS compartment Finland — 18 million










—


InvestEU Blending Operations — 18 million.




In addition, EUR 342 million is held in the Commission central treasury as a liquidity buffer to cover for immediate guarantee calls.
4.3.   LOANS AND RELATED BORROWINGS FOR FINANCIAL ASSISTANCE PROGRAMMES

The EU borrowing and lending activities for financial assistance programmes are non-budget operations. Except for the NGEU, funds raised are on-lent to the beneficiary country, back-to-back i.e. with the same coupon, maturity and amount. As a result, the EU services the borrowings with the money it receives from the loans. Nevertheless, the service of the borrowings 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.
The 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. In 2022 the Commission, acting on behalf of the EU, operates six main programmes under which it may grant loans:






—


SURE assistance;










—


European Financial Stabilisation Mechanism (EFSM) assistance;










—


Macro-Financial Assistance (MFA);










—


Balance of Payments (BOP) assistance;










—


Euratom; and










—


NGEU — for further information see Section 2 above.




At 31 December 2022, the nominal amount of the loans granted for financial assistance, excluding NGEU (see Section 2), were:









(EUR billion)




 


Total granted


Total disbursed at year-end


Total repaid at year-end


Outstanding at year-end





SURE



 


 


 


 




Belgium


8,2 


8,2 


—


8,2 




Bulgaria


1,0 


1,0 


—


1,0 




Croatia


1,6 


1,6 


—


1,6 




Cyprus


0,6 


0,6 


—


0,6 




Czechia


4,5 


4,5 


—


4,5 




Estonia


0,2 


0,2 


—


0,2 




Greece


6,2 


6,2 


—


6,2 




Hungary


0,7 


0,7 


—


0,7 




Ireland


2,5 


2,5 


—


2,5 




Italy


27,4 


27,4 


—


27,4 




Latvia


0,5 


0,5 


—


0,5 




Lithuania


1,1 


1,1 


—


1,1 




Malta


0,4 


0,4 


—


0,4 




Poland


11,2 


11,2 


—


11,2 




Portugal


6,2 


6,2 


—


6,2 




Romania


3,0 


3,0 


—


3,0 




Slovakia


0,6 


0,6 


—


0,6 




Slovenia


1,1 


1,1 


—


1,1 




Spain


21,3 


21,3 


—


21,3 




 



98,4 




98,4 



—



98,4 






EFSM



 


 


 


 




Ireland


22,5 


22,5 


—


22,5 




Portugal


24,3 


24,3 


(0,5 )


23,8 




 



46,8 




46,8 




(0,5 )




46,3 






MFA



 


 


 


 




Ukraine


12,2 


12,2 


(0,6 )


11,6 




Tunisia


1,4 


1,4 


—


1,4 




Jordan


1,1 


0,9 


—


0,9 




Other


1,4 


1,3 


(0,2 )


1,1 




 



16,1 




15,8 




(0,8 )




15,0 






BOP



 


 


 


 




Latvia


2,9 


2,9 


(2,7 )


0,2 




 



2,9 




2,9 




(2,7 )




0,2 






Euratom



 


 


 


 




Energoatom and K2R4 — Ukraine


0,4 


0,4 


(0,1 )


0,3 




Other


0,4 


0,4 


(0,4 )


—




 



0,8 




0,8 




(0,5 )




0,3 






Total




165,0 




164,7 




(4,5 )




160,2 





The repayment schedule for the amounts outstanding at year-end is as follows:











(EUR billion)




 


SURE


EFSM


MFA


BOP


Euratom


TOTAL




2023


—


3,5 


0,1 


—


—


3,6 




2024


—


2,6 


0,6 


—


—


3,2 




2025


8,0 


2,4 


—


0,2 


—


10,6 




2026


8,0 


6,2 


0,1 


—


—


14,3 




2027


—


3,0 


0,2 


—


0,1 


3,3 




2028


10,0 


2,3 


0,2 


—


0,1 


12,6 




2029


8,2 


1,4 


0,9 


—


—


10,4 




2030


10,0 


—


0,1 


—


0,1 


10,2 




2031


—


7,3 


1,2 


—


0,1 


8,6 




2032


—


3,0 


0,7 


—


—


3,7 




2033


—


2,1 


0,5 


—


—


2,6 




2034


—


—


0,7 


—


—


0,7 




2035


8,5 


2,0 


2,0 


—


—


12,5 




2036


9,0 


5,7 


1,3 


—


—


16,0 




2037


8,7 


—


0,9 


—


—


9,6 




2038


—


1,8 


—


—


—


1,8 




2039


—


—


—


—


—


 




2040


7,0 


—


0,5 


—


—


7,5 




2041


 


—


—


—


—


 




2042


—


3,0 


2,0 


—


—


5,0 




2043


—


—


—


—


—


 




2044


—


—


—


—


—


 




2045


—


—


—


—


—


 




2046


5,0 


—


—


—


—


5,0 




2047


6,0 


—


—


—


—


6,0 




2048


—


—


—


—


—


 




2049


—


—


—


—


—


 




2050


10,0 


—


—


—


—


10,0 




2051


—


—


—


—


—


 




2052


—


—


0,5 


—


—


0,5 




2053


—


—


2,5 


—


—


2,5 





Total




98,4 




46,3 




15,0 




0,2 




0,3 




160,2 






SURE

SURE was established in 2020 to provide financial assistance to Member States who are experiencing, or are seriously threatened with, a severe economic disturbance caused by the COVID-19 pandemic in their territory. The instrument complements the national measures taken by affected Member States. The maximum amount of financial assistance shall not exceed EUR 100 billion for all Member States.
At the end of 2022, Member States had signed loan facility agreements of EUR 98,4 billion, all disbursed by year-end 2022. In 2022, the Commission disbursed new loans of EUR 8,7 billion. The maturity of loans varies between 5 and 30 years.

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 has expired and no additional loans can be drawn, though it remains in place for specific tasks such as the lengthening of maturities of existing loans and providing bridging loans. In 2022, loans of EUR 2,2 billion to Portugal, maturing in April 2022, were extended by 4,5 years, whilst EUR 0,5 billion were repaid.

MFA

The MFA programme is a form of financial assistance 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 International Monetary Fund (IMF) programme.

Ukraine

In 2022 the European Parliament and the Council agreed three packages of financial assistance for Ukraine (8), totalling EUR 7,2 billion, to strengthen the immediate resilience of the country subsequent to Russia’s unprovoked and unjustified war of aggression. All the loans have been disbursed to Ukraine by the end of 2022. The maturity of these new loans to Ukraine varies between 10 to 30 years.
At the end of 2022 the total MFA loans outstanding to Ukraine amounted to EUR 11,6 billion (nominal amount).
To continue the EU support for Ukraine in 2023, a new package of financial assistance of EUR 18 billion was adopted by the European Parliament and the Council on 14 December 2022 (Regulation (EU) 2022/2463 of the European Parliament and the Council (9)). The Commission and Ukraine signed a Memorandum of Understanding and a Loan Facility Agreement in early 2023 and EUR 7,5 billion of loans has been disbursed by 31 May 2023. The Commission plans to disburse the remaining amount by the end of 2023 in monthly tranches of EUR 1,5 billion.

BOP

The BOP is an assistance programme designed for Member States 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, BOP assistance from the EU is offered in cooperation with the IMF and other international institutions or countries. No new operations or loan repayments occurred in 2022.

Euratom

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.
4.4.   BUDGETARY CONTINGENT LIABILITIES FOR FINANCIAL ASSISTANCE PROGRAMMES

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 CPF. Should a beneficiary Member State default, the debt service will be drawn from the available treasury balance of the Commission, if possible. If that is not possible at that time, 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 Regulation (EU, Euratom) No 609/2014), to make available sufficient funds to meet the EU’s obligations. Thus investors are only exposed to the credit risk of the EU, not to that of the beneficiary of loans funded. ‘Back-to-back’ lending ensures that the EU budget does not assume any interest rate or foreign exchange risk.
Loans provided to Member States under the SURE instrument are underpinned by a system of voluntary guarantees from Member States amounting to 25 % of the maximum amount of financial assistance. Each Member State’s contribution to the overall amount of the guarantee corresponds to its relative share in the total gross national income (GNI) of the European Union based on the 2020 EU budget.
EUR 6 billion of loans provided to Ukraine in 2022 under the exceptional MFA financial assistance, are covered by a system of guarantees from Member States for 61 % of the exposure, with the first 9 % of any losses to be covered by the EU budget (CPF). See note 2.4.1.1 in the consolidated EU annual accounts.
For each country programme, the European Parliament, 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 country concerned 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 an EU financial assistance, which is another factor influencing the timing of funding operations. This implies that the timing and maturities of issuances are dependent on the related EU lending activity. Funding is exclusively denominated in euro and the maturity spectrum is from 3 to 30 years.
5.   FINANCIAL STATEMENTS ANALYSIS
5.1.   REVENUE

The consolidated revenue of the EU incorporates amounts related to exchange transactions and non-exchange transactions, the latter being the most significant. The five-year trend of the main non-exchange revenue categories (comprising GNI resources, Traditional own resources, VAT resources, the new Plastics own resources, Fines and Recovery of expenses) is as follows:

Five-year trend of revenue from main non-exchange transactions
                            (10)






As budget revenue should equal (or exceed) budget expenditure, the main driver in the revenue trend shown above is the payments made each year.

Consolidated revenue — main developments in 2022

In 2022, the consolidated revenue, comprising all revenue categories, amounted to EUR 171,2 billion, compared to EUR 178,9 billion the previous year. The main developments explaining the decrease of EUR 7,7 billion or 4,3 % were:






—


Traditional own resources increased from EUR 20,6 billion in 2021 to EUR 23,5 billion in 2022. The increase of 2,9 billion or 14,1 % is mainly explained by the recent economic recovery;










—


VAT contributions have increased from EUR 18,3 billion in 2021 to EUR 19,7 billion in 2022;










—


Revenue from GNI (gross national income), the primary element of the EU’s operating revenue, decreased from EUR 116,0 billion in 2021 to EUR 103,9 billion in 2022. The decrease of EUR 12,1 billion or 10,4 % is linked to the increase of the other revenue categories, as the revenue from GNI funds the part of the budget which is not covered by other sources of income; and










—


Financial revenue decreased by EUR 2,5 billion mainly due to a decrease in accrued late payment interest for custom cases.




5.2.   EXPENSES

The main component of expenses recognised in the consolidated financial statements are expenses 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 EUR 114,8 billion or 43,6 % of the total expenses of EUR 263,1 billion incurred in 2022 (2021: EUR 119,9 billion, 54,3 % of the total expenses). The split of expenses under the shared management mode and their relative weights are presented below:

Main expenses under the shared management mode for the financial year 2022






The decrease of expenses under the shared management mode is mainly due to decreased expenses relating to the ERDF and Cohesion Fund (by EUR 3,8 billion) and the ESF (by EUR 2,1 billion). This reflects the transition from the former programming period of the 2014–2020 MFF to the current MFF 2021–2027: the costs declared for the previous programming period are decreasing while the costs related to the current period are low due to the slow start of its implementation. Expenses relating to the EAFRD and other rural development instruments and the EAGF increased by EUR 0,6 billion and EUR 0,2 billion respectively.
Following the successful launch of NGEU (see Section 2) in 2021, expenses under the direct management mode, which represents budget implementation by the Commission, executive agencies and trust funds, continued to increase from EUR 63,0 billion in 2021 to EUR 94,0 billion in 2022. The increase of EUR 31,0 billion is mainly due to the non-repayable support granted under the NGEU’s RRF, which amounted to EUR 69,5 billion (2021: EUR 42,9 billion).
Expenses under the indirect management mode represent the budget implementation by EU agencies, EU bodies, third countries, international organisations and other entities. In 2022 the expenses under the indirect management mode amounted to EUR 13,6 billion (2021: EUR 10,9 billion). The increase is mainly due to the increased expenses in the External Action area.
5.3.   ASSETS

As at 31 December 2022 total assets amounted to EUR 445,9 billion (2021: EUR 414,1 billion) — the increase is due to further lending from the SURE instrument and the lending and advances paid under the NGEU instrument. The most significant items were financial assets other than cash and cash equivalents (EUR 235,4 billion), pre-financing (EUR 100,5 billion), receivables and recoverables (EUR 48,2 billon) and cash and cash equivalents (EUR 46,5 billion). Other assets, amounting to EUR 15,2 billion, mainly included property, plant and equipment and intangible assets.

Composition of assets at 31 December 2022
                           






The increase in total assets of EUR 31,8 billion or 7,7 % from the previous year was mainly due to the following effects:






—


Loans outstanding increased from EUR 163,6 billion in 2021 to EUR 204,4 billion in 2022. The increase of EUR 40,8 billion or 24,9 % mainly reflects the issuance of further loans for financial assistance programmes to Member States under the RRF (EUR 27,2 billion), SURE (EUR 8,7 billion) programmes, and new loans under the MFA financial assistance programme (EUR 7,5 billion), of which EUR 7,2 billion was disbursed to Ukraine;










—


Total pre-financing increased from EUR 93,4 billion in 2021 to EUR 100,5 billion in 2022. The decrease of EUR 7,9 billion in the non-repayable financial support granted under the RRF was more than counterbalanced by the increased pre-financing payments in the cohesion area (ERDF, ESF, CF) where, as well as the first pre-financing paid out for the 2021–2027 programming period (EUR 5,4 billion), there were new pre-financing payments made for the 2014–2020 period that relate mainly to the REACT EU initial pre-financing (EUR 3,5 billion);










—


Cash and cash equivalents increased from EUR 44,9 billion in 2021 to EUR 46,5 billion in 2022. The increase of EUR 1,6 billion or 3,6 % is mainly due to the liquidity relating to NGEU (EUR 19,9 billion held in the NGEU account, as well as EUR 0,6 billion of funds held in the Commission’s central treasury account pending disbursement to the budget for MFF programmes); and










—


Receivables and recoverables decreased from EUR 72,4 billion to EUR 48,2 billion. The decrease of EUR 24,2 billion or 33,4 % is mainly due to the decrease in the recoverable related to the UK Withdrawal Agreement.





UK Withdrawal from the EU

On 31 January 2020, the United Kingdom (UK) withdrew from the European Union. The terms of its departure are defined in an Agreement on the withdrawal of the UK from the EU and the European Atomic Energy Community, also known as the ‘Withdrawal Agreement’ or ‘WA’. As part of this deal, the UK agreed to honour all financial obligations undertaken while it was a member of the EU. The agreement entered into force on 31 January 2020. The UK will continue to contribute to the EU budget and to benefit from pre-2021 EU programmes and expenditure as if it was a Member State. The UK will also receive back certain defined monies it paid into the EU budget or monies received by the EU budget linked to its period of membership. The EU reports twice a year to the UK on the amounts due and the UK pays these on a monthly basis. The reporting is updated each year based on actual figures.
The obligations under the Withdrawal Agreement create liabilities and receivables for the EU which have to be calculated and reflected in the EU’s annual accounts and cover in particular the following areas:






—


Own resources (Article 136)










—


Outstanding commitments (Article 140)










—


Competition fines (Article 141)










—


Union Liabilities (Article 142)










—


Contingent financial liabilities and financial instruments (Articles 143 & 144)










—


Net assets of the European Coal & Steel Community (Article 145)










—


EU investment in the European Investment Fund, EIF (Article 146)










—


Contingent liabilities concerning legal cases (Article 147).














(EUR million)




 


Article 140


Article 142


Other


31.12.2022


31.12.2021





Due from the UK




17 029 




9 587 




68




26 683 




43 982 






Due to the UK



—


—



(2 812 )




(2 812 )




(2 229 )






Total




17 029 




9 587 




(2 744 )




23 871 




41 753 






Non-current




8 465 




9 298 




(2 953 )




14 810 




30 839 






Current




8 563 




288




209




9 061 




10 913 






Pre-financing

In 2022, pre-financing, excluding other advances to Member States and contributions to the trust funds Bêkou and Africa, amounted to EUR 94,1 billion (2021: EUR 86,2 billion), almost all of which related to Commission activities. The increase of EUR 7,9 billion or 9,2 % is related to the increase of pre-financing related to shared management from EUR 31,8 billion in 2021 to EUR 40,6 billion in 2022:

Commission pre-financing by management mode






The level of pre-financing granted under MFF programmes is significantly influenced by the respective MFF cycle — for example at the beginning of an MFF period large advances are expected to be paid to Member States under cohesion policy and these amounts remain available to Member States until the 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 pre-financing is maintained at an appropriate level. A balance has to be struck between ensuring sufficient funding for projects and the timely recognition of expenditure.
5.4.   LIABILITIES

As at 31 December 2022 the total liabilities were EUR 577,2 billion (2021: EUR 496,4 billion) — the increase is driven mainly by the borrowings taken out in 2022 under the SURE and NGEU instruments. The most significant liabilities were borrowings for NGEU and financial assistance (EUR 344,3 billion), accrued charges and deferred income (EUR 86,2 billion), pension obligations and other post-employment benefits liabilities (EUR 80,6 billion) and payables to third parties (EUR 55,3 billion).

Composition of liabilities at 31 December 2022
                           






The increase of EUR 80,8 billion or 16,3 % over the previous year was mainly due to the following effects:






—


Borrowings increased from EUR 236,7 billion in 2021 to EUR 344,3 billion in 2022. The increase of EUR 107,6 billion or 45,5 % mainly relates to the new issuances, net of repayments, under NGEU (EUR 96,9 billion) and to additional borrowings under SURE (EUR 8,7 billion) and MFA (EUR 7,5 billion);










—


Accrued charges and deferred income increased from EUR 78,1 billion in 2021 to EUR 86,2 billion in 2022. The increase of EUR 8,1 billion or 10,4 % mainly relates to the RRF as the Member States advance with the implementation of reforms, and investments and milestones are estimated to have been completed;










—


Payables increased from EUR 46,4 billion in 2021 to EUR 55,3 billion in 2022. The increase of EUR 8,9 billion or 19,2 % is also primarily related to RRF (increase of EUR 5,5 billion), and own resources payables (increase of EUR 3,7 billion); and










—


The increase of the above liabilities was partially counterbalanced by a decrease of EUR 41,9 billion or 34,2 % in the pension obligations and other post-employment benefits liabilities, which fell from EUR 122,5 billion in 2021 to EUR 80,6 billion in 2022. This decrease was mainly driven by the actuarial gains from changes in the underlying financial assumptions resulting from a sharp increase in the real discount rates in the year.





Total cost claims and invoices received and recognised in the Balance Sheet under the heading ‘Payables’
                           







Net assets

The excess of liabilities over assets at 31 December 2022 amounted to EUR 131,3 billion (2021: EUR 82,3 billion). The considerable increase of EUR 49,0 billion is mainly due to the borrowings in relation to non-repayable support taken out under NGEU in 2022 (resulting in direct management expenses of EUR 69,5 billion, an increase of EUR 26,6 billion against the previous year). It is noted that 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 following years and funded using future budgets; the related revenues will only be accounted for in future periods. Apart from the borrowings for NGEU, which are to be repaid between 2028 and 2052, and the employee benefits liability, which is to be paid over several decades, the most significant amounts to be highlighted are the activities relating to the EAGF, the bulk of which is usually paid in the first quarter of the following year.
6.   EU 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.
6.1.   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 principles (11) of subsidiarity and proportionality. In order 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 various instruments, one of which is the EU budget. Others are, for example, a common legislative framework or joint policy strategies.

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 and instruments. 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 MFF is adopted by the Council by unanimity of all Member States, with the consent of the European Parliament. The current 2021–2027 multiannual financial framework was adopted on 17 December 2020. The 2021–2027 multiannual financial framework is complemented by the temporary recovery instrument NextGenerationEU (see Section 2).

Annual budget

The annual budget is prepared by the Commission. The European Parliament and the Council agree (usually by mid December) on the budget for the following year, 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 budget are own resources revenues which are complemented by other revenues. There are four types of own resources: Traditional own resources (mainly custom duties), the own resource based on value added tax (VAT), the own resource based on non-recycled plastic packaging waste (introduced in 2021) 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.

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 (around 3/4 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 contribution 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 instruments and budgetary guarantees

The traditional method of budget implementation of giving grants and subsidies is complemented by issuing financial instruments in the form of guarantees as well as equity and loans. Furthermore, the EU engages in borrowing and lending activities for specific financial assistance programmes in order to support Member States and third countries in the form of bilateral
loans financed from debt issued on the capital markets with the guarantee of the EU Budget. In December 2022, Parliament and the Council established the unified funding approach to EU borrowing, under which the Commission will be issuing single branded ‘EU-Bonds’, rather than separately denominated bonds for individual programmes.

Financial Regulation

The Financial Regulation (FR) (12) 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. It also includes the specific provisions applicable to financial instruments, budgetary guarantees and financial assistance
6.2.   GOVERNANCE AND ACCOUNTABILITY

6.2.1.   Institutional structure

The EU has an institutional framework through which it 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. The Financial Regulation, together with the applicable accounting rules, defines which of these entities are included in the EU consolidated accounts (please see note 9 of the EU consolidated annual accounts 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 European Commission is the executive arm of the European Union. It promotes the Union’s general interest and takes appropriate initiatives to that end. It ensures the application of the Treaties and oversees the application of Union law by Member States under the control of the Court of Justice of the European Union. It exercises coordinating, executive and management functions, executes the budget and manages programmes.
The Commission implements the budget, in large part in cooperation with the Member States (13). 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 institutions as concerns their own expenditure.
6.2.2.   The Commission’s governance structure

The Commission’s governance arrangements and how these ensure that the Commission functions as a modern, accountable and performance-oriented institution are described in the Communication (14) on Governance in the European Commission.
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. As a College, the Commission works under the political guidance of its President, who presents, as part of his or her nomination to the European Parliament the objectives he or she intends to pursue in the form of political guidelines. The President decides on the internal organisation of the Commission, ensuring that it acts consistently, efficiently and as a collegiate body.
The College delegates the operational implementation of the budget and financial management to the Directors-General and Heads of Service who lead the administrative structure of the Commission. 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.
Under the authority of the President and in close cooperation with the Member of the Commission in charge of budget, human resources and administration, and with the involvement of the Presidential and central services, the Corporate Management Board provides coordination, oversight, advice and strategic orientations.
The internal arrangements define a coherent set of robust controls and management tools which allow the College of Commissioners to assume political responsibility for the work of the Commission (15).
6.2.3.   The Commission’s financial management

In the Commission, the roles and responsibilities in financial management are clearly defined (e.g. in the Financial Regulation and the Internal Rules (16)) 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 sub-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) detailing achievements, internal control and financial management activities 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. The Annual Management and Performance Report for the EU budget (17) 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 (IPSAS), validating accounting systems and the preparation of the Commission's and consolidated annual accounts of the EU. Furthermore, the Accounting Officer is required to sign the annual accounts declaring that they present fairly, in all material aspects, the financial position, the results of the operations and the cash flows of the Union. The annual accounts are adopted by the College of Commissioners. The Accounting Officer is an independent function and bears a major responsibility as regards financial reporting in the Commission.
The Internal Auditor of the Commission is likewise a centralised and independent function and provides independent advice, opinions and recommendations on the quality and functioning of internal control systems inside the Commission, EU agencies and other autonomous bodies.
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 services 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.
6.2.4.   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 in a proper manner.
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.
Every year the European Court of Auditors 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. As from 2021, given the considerable importance of NextGenerationEU, the European Court of Auditor’s opinion on the legality and regularity of expenditure under the traditional EU budget is complemented by a separate opinion on the legality and regularity of expenditure under the Recovery and Resilience Facility. 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 decision on the discharge is also based on the Commission’s integrated financial and accountability reporting, on hearings of Commissioners in the European Parliament and on the replies provided to written questions addressed to the Commission.
NOTE ACCOMPANYING THE CONSOLIDATED ACCOUNTS
The consolidated annual accounts of the European Union for the year 2022 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 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



                        19 June 2023
                     




CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES (2)


CONTENTS






BALANCE SHEET
35








STATEMENT OF FINANCIAL PERFORMANCE
36








CASHFLOW STATEMENT
37








STATEMENT OF CHANGES IN NET ASSETS
38








NOTES TO THE FINANCIAL STATEMENTS
39










1.

SIGNIFICANT ACCOUNTING POLICIES
39










2.

NOTES TO THE BALANCE SHEET
53










3.

NOTES TO THE STATEMENT OF FINANCIAL PERFORMANCE
94










4.

CONTINGENT LIABILITIES AND ASSETS
104










5.

BUDGETARY AND LEGAL COMMITMENTS
110










6.

FINANCIAL RISK MANAGEMENT
114










7.

RELATED PARTY DISCLOSURES
135










8.

EVENTS AFTER THE BALANCE SHEET DATE
137










9.

SCOPE OF CONSOLIDATION
137




BALANCE SHEET









(EUR million)




 


Note


31.12.2022


31.12.2021





NON-CURRENT ASSETS



 


 


 





Intangible assets




2.1




900




769






Property, plant and equipment




2.2




12 922 




12 669 






Investments accounted for using the equity method




2.3




1 313 




1 192 






Financial assets




2.4




226 431 




181 874 






Pre-financing




2.5




47 482 




60 792 






Exchange receivables and non-exchange recoverables




2.6




18 870 




40 642 





 


 



307 917 




297 938 






CURRENT ASSETS



 


 


 





Financial assets




2.4




8 981 




6 744 






Pre-financing




2.5




53 014 




32 656 






Exchange receivables and non-exchange recoverables




2.6




29 329 




31 796 






Inventories




2.7




82




84






Cash and cash equivalents




2.8




46 544 




44 860 





 


 



137 950 




116 141 






TOTAL ASSETS



 



445 867 




414 078 






NON-CURRENT LIABILITIES



 


 


 





Pension and other employee benefits




2.9




(80 617 )




(122 466 )






Provisions




2.10




(2 199 )




(2 950 )






Financial liabilities




2.11




(323 985 )




(214 974 )





 


 



(406 801 )




(340 391 )






CURRENT LIABILITIES



 


 


 





Provisions




2.10




(571)




(398)






Financial liabilities




2.11




(28 316 )




(31 149 )






Payables




2.12




(55 341 )




(46 372 )






Accrued charges and deferred income




2.13




(86 164 )




(78 068 )





 


 



(170 392 )




(155 987 )






TOTAL LIABILITIES



 



(577 193 )




(496 377 )






NET ASSETS



 



(131 325 )




(82 299 )






Reserves




2.14




1 312 




1 325 






Amounts to be called from Member States
 (3)




2.15




(132 637 )




(83 624 )






NET ASSETS



 



(131 325 )




(82 299 )






STATEMENT OF FINANCIAL PERFORMANCE









(EUR million)




 


Note


2022


2021





REVENUE



 


 


 





Revenue from non-exchange transactions



 


 


 





GNI resources




3.1




103 880 




115 955 






Traditional own resources




3.2




23 495 




20 590 






VAT resources




3.3




19 666 




18 340 






Plastics own resources




3.4




6 337 




5 831 






Fines




3.5




915




1 990 






Recovery of expenses




3.6




1 219 




1 794 






UK Withdrawal Agreement




3.7



—



1 122 






Other




3.8




11 395 




6 737 





 


 



166 908 




172 357 





 


 


 


 





Revenue from exchange transactions



 


 


 





Financial revenue




3.9




2 602 




5 092 






Other




3.10




1 669 




1 497 





 


 



4 271 




6 589 






Total Revenue



 



171 179 




178 946 






EXPENSES



 


 


 





Implemented by Member States




3.11



 


 





European Agricultural Guarantee Fund



 



(41 031 )




(40 829 )






European Agricultural Fund for Rural Development and other rural development instruments



 



(16 073 )




(15 451 )






European Regional Development Fund and Cohesion Fund



 



(43 083 )




(46 932 )






European Social Fund



 



(14 649 )




(16 727 )






Other



 



(3 482 )




(4 835 )






Implemented by the Commission, executive agencies and trust funds




3.12




(94 027 )




(63 000 )






Implemented by other EU agencies and bodies




3.13




(3 615 )




(3 154 )






Implemented by third countries and international organisations




3.13




(5 281 )




(4 512 )






Implemented by other entities




3.13




(4 738 )




(3 225 )






Staff and pension costs




3.14




(14 209 )




(12 417 )






Finance costs




3.15




(7 637 )




(4 201 )






UK Withdrawal Agreement




3.7




(6 961 )



—





Other expenses




3.16




(8 342 )




(5 762 )






Total Expenses



 



(263 128 )




(221 046 )






ECONOMIC RESULT OF THE YEAR



 



(91 949 )




(42 100 )






CASHFLOW STATEMENT








(EUR million)




 


2022


2021





Economic result of the year




(91 949 )




(42 100 )






Operating activities



 


 





Amortisation




135




116






Depreciation




1 284 




1 054 






(Reversal of) impairment losses on investments



—


—





(Increase)/decrease in loans




(40 787 )




(70 259 )






(Increase)/decrease in pre-financing




(7 049 )




(30 699 )






(Increase)/decrease in exchange receivables and non-exchange recoverables




24 239 




2 055 






(Increase)/decrease in inventories




2




(4)






Increase/(decrease) in pension and other employee benefits




(41 850 )




6 447 






Increase/(decrease) in provisions




(578)




(2 057 )






Increase/(decrease) in financial liabilities (other than NGEU borrowings)




14 050 




60 075 






Increase/(decrease) in payables




8 969 




13 964 






Increase/(decrease) in accrued charges and deferred income




8 096 




13 484 






Prior year budgetary surplus taken as non-cash revenue




(3 227 )




(1 769 )






Remeasurements in employee benefits liabilities (non-cash movement not included in statement of financial performance)




46 048 




(3 257 )






Other non-cash movements




102




(1 757 )






Investing activities



 


 





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




(1 803 )




(2 307 )






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




(121)




(604)






(Increase)/decrease in non-derivative financial assets at fair value through surplus or deficit




(5 850 )




(4 636 )






(Increase)/decrease in derivative financial assets at fair value through surplus or deficit




(156)




(629)






Financing activities



 


 





Increase/(decrease) in borrowings related to NGEU




92 128 




91 000 






NET CASHFLOW




1 684 




28 118 






Net increase/(decrease) in cash and cash equivalents




1 684 




28 118 






Cash and cash equivalents at the beginning of the year




44 860 




16 742 






Cash and cash equivalents at year-end




46 544 




44 860 






STATEMENT OF CHANGES IN NET ASSETS










(EUR million)




 


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


Other reserves


Fair value reserve


Net Assets





BALANCE AS AT 31.12.2020




(38 480 )




4 566 




496




(33 418 )






Impact of revised EAR 11 (see Note 1)




1 719 




(3 043 )




(496)




(1 820 )






BALANCE AS AT 1.1.2021




(36 761 )




1 523 



—



(35 238 )






Remeasurements in employee benefits liabilities




(3 257 )



—


—



(3 257 )






Other




262




(198)



—



63






2020 budget result credited to Member States




(1 769 )



—


—



(1 769 )






Economic result of the year




(42 100 )



—


—



(42 100 )






BALANCE AS AT 31.12.2021




(83 624 )




1 325 



—



(82 299 )






Remeasurements in employee benefits liabilities




46 048 



—


—



46 048 






Other




115




(13)



—



102






2021 budget result credited to Member States




(3 227 )



—


—



(3 227 )






Economic result of the year




(91 949 )



—


—



(91 949 )






BALANCE AS AT 31.12.2022




(132 637 )




1 312 



—



(131 325 )






NOTES TO THE FINANCIAL STATEMENTS







Note that in the following tables amounts concerning the UK in relation to MFFs up to end 2020 are still shown under the heading Member States as although the UK withdrew from the Union on 1 February 2020, in accordance with the Withdrawal Agreement, it continues to have a financial relationship with the Union equivalent to that of a Member State for these periods.





1.   SIGNIFICANT ACCOUNTING POLICIES
1.1.   LEGAL BASIS AND ACCOUNTING RULES

The accounts of the EU are kept in accordance with Regulation (EU, Euratom) 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 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)



Revised EAR effective for annual periods beginning on or after 1 January 2022
                                    


There are no new EAR which became effective for annual periods beginning on or after 1 January 2022.


New EAR adopted but not yet effective at 31 December 2022
                                    


There are no new EAR adopted but not yet effective at 31 December 2022.
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 entities falling under the scope of consolidation, which now comprises 54 controlled entities and 1 associate (2021: 55 controlled entities and 1 associate), can be found in note 9. 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 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. These entities are referred to as ‘Minor entities’ and are separately listed in note 9. In 2022, 8 entities have been classified as such minor entities (2021: 8 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 recognising in the EU’s financial statements its assets and liabilities, revenues and expenses, as well as its share of assets, liabilities, revenues and expenses 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 behalf of these entities. 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 in accordance with Article 243 of the Financial Regulation. 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.
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


31.12.2022


31.12.2021


Currency


31.12.2022


31.12.2021





BGN




1,9558 




1,9558 




PLN




4,6808 




4,5969 






CZK




24,1160 




24,8580 




RON




4,9495 




4,949 






DKK




7,4365 




7,4364 




SEK




11,1218 




10,2503 






GBP




0,8869 




0,8403 




CHF




0,9847 




1,0331 






HRK




7,5345 




7,5156 




JPY




140,6600 




130,3800 






HUF




400,8700 




369,1900 




USD




1,0666 




1,1326 





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 financial instruments, impairment allowance for financial assets at amortised cost and for financial guarantee contract liabilities, 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 that 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 life time or legal life time 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


Straight line depreciation rate





Buildings




4 % to 10 %






Space assets




8 % to 25 %






Plant and equipment




10 % to 25 %






Furniture and vehicles




10 % to 25 %






Computer hardware




25 % to 33 %






Other




10 % to 33 %





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

Leases

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 balance sheet.
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.
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 financial assets at fair value through surplus or deficit (‘FVSD’).
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 at initial recognition

The classification depends on two criteria:






—


The financial assets management model. This requires an assessment of how the EU manages the financial assets to generate cash flows and to achieve its objectives and how it evaluates the performance on financial assets.










—


The asset contractual cash-flow characteristics. This requires an assessment of whether the contractual cash flows are solely payments of principal and interest on the principal outstanding. The interest is the consideration for the time value of money, credit risk and other basic lending risks and costs.




Following assessment based on these criteria, the financial assets can be classified in three categories: Financial assets at amortised cost (‘AC’), financial assets at fair value through net assets/equity (‘FVNA’) or financial assets at fair value through surplus or deficit (‘FVSD’).
Financial assets with contractual cash flows that represent solely principal and interests are classified depending on the entity’s management model. If the management model is to hold the financial assets in order to collect contractual cash flows, the financial assets are classified at AC. If the management model is to hold the financial assets both to collect contractual cash flows and to sell the financial assets, the classification is FVNA. If the management model is different to these two models (e.g. the financial assets are held for trading or held in a portfolio managed and evaluated on a fair value basis), the financial assets are classified as FVSD.
Financial assets with contractual cash flows that do not represent only principal and interests, but introduce exposure to risks and volatility other than those present in a basic lending arrangement (e.g. changes in equity prices), are classified as FVSD regardless of the management model.
At initial recognition, the EU classifies the financial assets as follows:
(i)   Financial assets at amortised cost

The EU classifies in this category:






—


Cash and cash equivalents;










—


Loans (including term deposits with original maturity of more than three months);










—


Exchange receivables, except for the financial guarantee contract receivable leg classified as financial asset at fair value through surplus or deficit.




These non-derivative financial assets meet two conditions: The EU’s management model is to hold them in order to collect the contractual cash flows. Furthermore, on specified days, there are contractual cash flows that represent only principal and interest on the outstanding principal.
Financial assets at amortised cost are included in current assets, except for those with maturity of more than 12 months from the reporting date.
(ii)   Financial assets at fair value through net assets/equity

These non-derivatives financial assets have contractual cash flows that represent only principal and interest on the outstanding principal. In addition, the management model is to hold the financial assets both to collect contractual cash flows and to sell the financial assets.
Assets in this category are classified as current assets, if they are expected to be realised within 12 months from the reporting date.
The EU does not hold such assets at 31 December 2022.
(iii)   Financial assets at fair value through surplus or deficit

The EU classifies the following financial assets as FVSD because the contractual cash flows do not represent only principal and interests on the principal:






—


Derivatives;










—


Equity investments and investments in money market funds or in pooled portfolio funds;










—


Other equity-type investments (e.g. Risk Capital Operations).




In addition, the EU classifies the debt securities it holds as FVSD because the portfolios of debt securities are managed and evaluated on a portfolio fair value basis (e.g. Common Provisioning Fund under Article 212 of the Financial Regulation).
Assets in this category are classified as current assets, if they are expected to be realised within 12 months from the reporting date.

Initial recognition and measurement

Purchases of financial assets at fair value through net assets/equity and at fair value through surplus or deficit are recognised on their trade-date — the date on which the EU commits to purchase the asset. Cash equivalents and loans are recognised when cash is deposited in a financial institution or advanced to borrowers.
Financial assets are initially measured at fair value. For all financial assets not carried at fair value through surplus or deficit, the transactions costs are added to the fair value at initial recognition. For financial assets carried at fair value through surplus or deficit the 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 unless the transaction is not at arm’s length, i.e. at no or at nominal consideration for public policy purposes. In this case, the difference between the fair value of the financial instrument and the transaction price is a non-exchange component which is recognised as an expense in the statement of financial performance. In this case, the fair value of a financial asset is derived from current market transactions for a directly equivalent instrument. If there is no active market for the instrument, the fair value is derived from a valuation technique that uses available data from observable markets.
When a long-term loan that carries no interest or an interest below market conditions is granted, its fair value can be estimated as the present value of all future cash receipts discounted using the prevailing market rate of interest for a similar instrument with a similar credit rating.
Loans granted under the Recovery and Resilience Facility and loans for financial assistance are initially measured at their nominal amount, with the transaction price considered the fair value of the loan. This is because:






—


The ‘market environment’ for EU lending is very specific and different from the capital market used to issue commercial or government debt. As lenders in these markets have the opportunity to choose alternative investments, the opportunity of doing so is factored into market prices. However, this opportunity for alternative investments does not exist for the EU, which is not allowed to invest money in the capital markets; it only borrows funds for the purpose of lending. 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 should be the interest rate charged.





Subsequent measurement

Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method.
Financial assets at fair value through net assets/equity are subsequently measured at fair value. Gains and losses from changes in the fair value are recognised in the fair value reserve, except for foreign exchange translation differences on monetary assets, which are recognised in the statement of financial performance.
Financial assets at fair value through surplus or deficit are subsequently measured at fair value. Gains and losses from changes in the fair value (including those stemming from foreign currency translation and any interests earned) are included in the statement of financial performance in the period in which they arise.

Fair value at subsequent measurement

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

Impairment of financial assets

The EU recognises and measures an impairment loss for expected credit losses on financial assets that are measured at amortised cost and at fair value through net assets/equity.
The expected credit loss (ECL) is the present value of the difference between the contractual cash flows and the cash flows that the EU expects to receive. The ECL incorporates reasonable and supportable information that is available without undue cost or effort at the reporting date.
The ECL is measured with a three stage model that takes into account probability weighted default events during the lifetime of the financial asset and the evolution of credit risk since the origination of the financial asset. For loans, origination is the date of the irrevocable loan commitment.
If there is no significant increase in credit risk since origination (‘stage 1’), the impairment loss is the ECL from possible default events in the next 12 months from the reporting date (‘12 months ECL’). If there is a significant increase in credit risk since origination (‘stage 2’), or if there is objective evidence of a credit impairment (‘stage 3’), the impairment loss equals the ECL from possible default events over the whole lifetime of the financial asset (‘lifetime ECL’) (see note 6.5).
For assets at amortised cost, the asset’s carrying amount is reduced by the amount of the impairment loss which is recognised in the statement of financial performance. For assets at fair value through net assets/equity the loss allowance is recognised in net assets/equity and does not reduce the carrying amount of the financial asset in the balance sheet. If, in a subsequent period, the amount of the impairment loss decreases, the previously recognised impairment loss is reversed through the statement of financial performance.
(a)   Loans to sovereigns

The EU bases its assessment of loans’ impairment, in the context of the nature of the EU’s financing and its unique institutional status.
For the impairment of loans to non-Member States, the EU calculates the expected credit losses using external credit quality data, however taking into account its preferred creditor status, which reduces the credit risk. For the calculation of the present value, the discount rate is the loan’s original effective interest rate. If a loan has a variable interest rate, the discount rate is the current effective interest rate determined under the contract.
For loans to Member States, the EU has never incurred any impairment losses, nor faced any defaults on payments. For these loans, in addition to the preferred creditor status, the EU takes into account the relationships with its Member States. These two elements, in principle, guarantee the full recovery of the loans to Member States, on maturity. Therefore, the EU considers the expected credit losses from loans to Member States to be negligible, and a statistical approach to calculate expected credit losses as inappropriate for these loans. Thus no expected credit losses are recognised in the statement of financial performance for the loans to Member States.
(b)   Receivables

The EU measures the impairment loss at the amount of lifetime ECL, using practical expedients (e.g. provision matrix).
(c)   Cash and cash equivalents

The EU holds cash and cash equivalents in current bank accounts and term deposits of up to 3 months. The cash is held in banks with very high credit ratings (see note 6.5), thus having very low default probabilities. Given the short duration and low default probabilities, the expected credit losses from cash and cash equivalents are negligible. As a result, no impairment allowance is recognised for cash equivalents.

Derecognition

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. Sales of financial assets at fair value through net assets/equity and through surplus or deficit are recognised on their trade-date.
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 in accordance with the principle of sound financial management over a period defined in the particular contract, decision, agreement or basic act. The float or advance is either used for the purpose for which it was provided during the period defined in the agreement or it is repaid. If the beneficiary does not incur eligible expenditure, they have the obligation to return the pre-financing 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 contributions to EU trust funds (as established under Article 234 of the Financial Regulation) not consolidated in the European Commission, or to other unconsolidated entities, are 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 are financial assets measured at amortised cost, except for certain amounts of financial guarantee contract receivable leg which are classified as financial asset at fair value through surplus or deficit (see note 1.5.5).
Recoverables from non-exchange transactions are carried at fair value as at the date of acquisition 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-exchange 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 assets at amortised cost and include cash at hand, deposits held at call or at short notice with banks and other short-term highly liquid investments with original maturities of three months or less.
1.5.10.   Employee benefits

The 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 health insurance 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.


Pension Scheme of European Officials (PSEO): The benefits granted under this notionally funded (18) 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.










ii.


Joint Sickness Insurance Scheme (JSIS): Under this scheme, the EU provides health insurance 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 and former 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, European Court of Justice, Court of Auditors, Council, European Parliament, European Ombudsman, and the European Data Protection Supervisor. The EU provides health coverage to the members of the EU Institutions via the JSIS.
The above post-employment benefits qualify as defined benefit obligations of the EU and are calculated at each reporting date by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligation is performed annually using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.
The post-employment benefits provided to EU staff are incorporated in a single plan comprising both a pension scheme (PSEO) and a sickness insurance scheme (JSIS), with the right to coverage under the JSIS scheme being dependent on having acquired the right to coverage under the PSEO scheme. Under the terms of this single plan, as set out in the Staff Regulation, certain entitlements, such as the right to a deferred and reduced pension under the PSEO scheme, are acquired after 10 years of service. However, the entitlements acquired under the single plan by the employee’s subsequent service are materially higher than those initial entitlements as reflected by subsequent annually accrued pension rights.
Therefore, in order to depict the economic substance of the underlying transaction required by the faithful representation qualitative characteristic of financial reporting as outlined in both EAR 1 and the IPSAS Conceptual Framework, the service cost incurred is accrued on a straight-line basis over staff’s estimated active service period, i.e. the period from the date when service by the employee first leads to benefits under the plan (whether or not the benefits are conditional on further service) until the date when further service by the employee will lead to no material amount of further benefits under the plan, other than from further salary increases. This approach is applied consistently to the benefits provided for under the single plan.
Remeasurements in the net defined benefit liabilities 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 heading ‘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 contract liabilities.
Borrowings are composed of borrowings from credit institutions and debts evidenced by certificates (EU bonds, EU deposits and EU bills). 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. The transaction costs incurred by the EU and then recharged to the beneficiary of the loan are immaterial and are directly recognised in the statement of financial performance.
Financial liabilities at fair value through surplus or deficit include derivatives where the 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.
The EU recognises a financial guarantee contract liability when it enters into a contract that requires the EU to make specified payments to reimburse the guarantee holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Where the guarantee contract requires the EU to make payments in response to financial instruments price changes or changes to other underlyings, the guarantee contract is a derivative i.e. a financial liability at fair value through surplus or deficit. All other guarantee contracts are accounted for as financial provisions.
Financial guarantee contract liabilities are initially recognised at fair value. This equals the net present value of the premium receivable, if it is at market terms. When no guarantee premium is charged or where the consideration is not fair value, the fair value is determined based on the quoted prices in an active market for financial guarantee contracts directly equivalent to that entered into the financial guarantee liability, if available, or using a valuation technique. If no reliable measure of fair value can be determined either by direct observation of an active market or through another valuation technique, the financial guarantee contract liability is initially measured at the amount of the lifetime expected credit losses.
The subsequent measurement depends on the evolution of the credit risk exposure from the financial guarantee. If there is no significant increase in credit risk (‘stage 1’), financial guarantee liabilities are measured at the higher of the 12 months expected credit losses and the amount initially recognised less, when appropriate, cumulative amortisation. If there is a significant increase in credit risk (‘stage 2’), financial guarantee liabilities are measured at the higher of the lifetime expected credit losses and the amount initially recognised less, when appropriate, cumulative amortisation (see note 6.5).
Financial liabilities are classified as non-current liabilities, except for maturities less than 12 months after the balance sheet date. Financial guarantee contracts are classified as current liabilities except if the EU has an unconditional right to defer the settlement of the liability for at least twelve months after the reporting date.
EU trust funds that are considered as part of the Commission’s operational activities (i.e. trust funds Madad and Colombia) 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 distribution of the remaining resources will be decided by the trust fund board.
The same measurement principles apply to the external contributions to the EU programmes, in case such contributions are received with conditions to use the resources as stipulated in the contribution agreements or otherwise to return them to the contributor.
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 eligible amount.
Payables arising from the purchase of goods and services are recognised at invoice reception for the original amount and the corresponding eligible 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 a 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 as follows:

GNI based resources, VAT and Plastics own resources

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

Traditional own resources

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

Fines

Revenue from fines is recognised when the EU’s decision imposing a fine has been adopted and it is officially notified to the addressee. After the decision to impose a fine, the fined entities 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 challenge it in accordance with 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.
If 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 is given instead, the outstanding recoverable is written down.
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 interest rate 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 is considered credit impaired (‘stage 3’), the interest revenue is recognised using the rate of interest to discount the future cashflows for the purpose of measuring the impairment loss.

Revenue from dividends

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

Revenue and expense from financial assets through surplus or deficit

This refers to the fair value gains (revenue) and fair value losses (expense) from these financial assets, including those stemming from foreign exchange translation. For interest-bearing financial assets, this also includes interest. See also note 3.9.

Revenue from financial guarantee contracts

The revenue from financial guarantee contracts (guarantee premium) is recognised over the time the EU stands ready to compensate the holder of the financial guarantee contract for the credit loss it may incure. The amortisation schedule applied takes into account the passage of time and the volume of the guaranteed exposure. Revenue from financial guarantee contracts include also amortisation of financial guarantee contracts liability in cases when the guarantee was provided at no or nominal consideration.
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: (i) entitlements; (ii) transfers under agreement and discretionary grants; as well as (iii) 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.
The cashflow statement reports cashflows during the period classified by operating, investing and financing activities.
Operating activities are the activities of the EU that are not investing or financing activities. These are the majority of the activities performed.
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 as they are part of the general objectives and thus daily operations of the EU. The objective is to show the real investments made by the EU.
Financing activities are activities that result in changes in the size and composition of borrowings other than those granted to beneficiaries on a back-to-back basis or for the acquisition of properaty, plant and equipment (which are included under operating activities).
2.   NOTES TO THE BALANCE SHEET

ASSETS

2.1.   INTANGIBLE ASSETS







(EUR million)





Gross carrying amount at 31.12.2021




1 636 






Additions




280






Disposals




(54)






Transfer between asset categories




0






Other changes




(12)






Gross carrying amount at 31.12.2022




1 849 






Accumulated amortisation at 31.12.2021




(867)






Amortisation charge for the year




(135)






Amortisation written back




—






Disposals




49






Transfer between asset categories




0






Other changes




3






Accumulated amortisation at 31.12.2022




(949)






Net carrying amount at 31.12.2022




900






Net carrying amount at 31.12.2021




769





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 European Geostationary Navigation Overlay System (EGNOS), and the Copernicus European Earth observation programme. Assets of the space systems which are not yet operational are included under the heading ‘Assets under construction’. The assets related to the EU space programmes are being built with the assistance of the European Space Agency (ESA).
For Galileo, two satellites launched in December 2021 have been declared operational in March 2022. The constellation currently includes 28 satellites. When completed, the Galileo constellation will comprise 30 satellites (including 6 spare satellites). The Galileo operational fixed assets, covering both satellites and ground installations, amounted to EUR 3 056 million at 31 December 2022, net of accumulated depreciation (2021: EUR 3 413 million). The remaining assets under construction total EUR 1 812 million (2021: EUR 1 344 million).
Regarding Copernicus, following a technical incident involving the SAR instrument (providing the radar data) on board of Sentinel-1B, and despite all efforts to reactivate the satellite, it has been concluded in July 2022 that Sentinel-1B could no longer support the Sentinel-1 mission. Sentinel 1B has thus been fully written off (EUR 86 million, net of accumulated depreciation). The total value of Copernicus operational fixed assets is EUR 634 million (2021: EUR 937 million), net of accumulated depreciation. A further EUR 2 583 million related to Copernicus satellites is recognised as assets under construction (2021: EUR 2 115 million).
Fixed assets related to the EGNOS ground infrastructure of EUR 106 million (2021: EUR 130 million) are also included under the heading ‘Space assets’. In addition, EGNOS assets under construction amount to EUR 292 million (2021: EUR 189 million).

Property, plant and equipment















(EUR million)




 


Land and Buildings


Space assets


Plant and Equipment


Furniture and Vehicles


Computer Hardware


Other


Finance leases


Assets under construction


Total





Gross carrying amount at 31.12.2021




6 547 




7 730 




568




281




781




347




2 651 




3 890 




22 793 






Additions




34




7




36




13




107




24




139




1 349 




1 710 






Disposals




(6)




(340)




(32)




(14)




(49)




(10)




(109)



—



(561)






Transfer between asset categories




32




206




0




1




0




6



—



(245)




0






Other changes




(0)



—


—


—



(0)




0




(6)




—




(6)






Gross carrying amount at 31.12.2022




6 608 




7 603 




572




280




838




367




2 675 




4 995 




23 937 






Accumulated depreciation at 31.12.2021




(3 846 )




(3 250 )




(479)




(208)




(581)




(276)




(1 487 )



 



(10 126 )






Depreciation charge for the year




(172)




(811)




(42)




(15)




(96)




(21)




(133)



 



(1 290 )






Depreciation written back




0



—


—



0




(0)



—



5



 



6






Disposals




2




255




27




14




47




9




62



 



417






Transfer between asset categories




0



—



0




(0)




(0)




(0)



—


 



(0)






Other changes



—


—



(0)




(0)



—



0




(22)



 



(22)






Accumulated depreciation at 31.12.2022




(4 016 )




(3 807 )




(494)




(209)




(630)




(288)




(1 574 )



 



(11 015 )






NET CARRYING AMOUNT AT 31.12.2022




2 592 




3 796 




78




71




208




79




1 101 




4 995 




12 922 






NET CARRYING AMOUNT AT 31.12.2021




2 701 




4 480 




89




73




199




72




1 164 




3 890 




12 669 





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 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 2022, the EU holds 30 % of ownership interests in the EIF (2021: 30 %) and 30 % of the voting rights (2021: 30 %). The table below shows the current year’s movement of the EU’s participation in the EIF.






(EUR million)




 


European Investment Fund





Participation at 31.12.2021




1 192 






Contributions



—





Dividends received




(4)






Share of net result




24






Share in the net assets




102






Participation at 31.12.2022




1 313 





EIF summarised financial information:







(EUR million)




 


31.12.2022


31.12.2021




Total EIF


Total EIF





Assets




5 504 




5 187 






Liabilities




(1 127 )




(1 213 )






Revenue




340




781






Expenses




(261)




(217)






Surplus/(deficit)




79




564





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







(EUR million)




 


31.12.2022


31.12.2021





Net assets of the associate




4 377 




3 974 






EC ownership interests in EIF




30,0  %




30,0  %






Carrying amount




1 313 




1 192 





The EU, represented by the Commission, has paid in 20 % of its subscribed shares in the EIF capital at 31 December 2022, the uncalled amount is as follows:







(EUR million)




 


Total EIF capital


EU subscription





Total share capital




7 300 




2 190 






Paid-in




(1 460 )




(438)






Uncalled




5 840 




1 752 





2.4.   FINANCIAL ASSETS









(EUR million)




 


Note


31.12.2022


31.12.2021





Non-current



 


 


 





Financial assets at amortised cost




2.4.1




199 918 




160 214 






Financial assets at fair value through surplus or deficit




2.4.2




26 513 




21 660 





 


 



226 431 




181 874 






Current



 


 


 





Financial assets at amortised cost




2.4.1




4 437 




3 353 






Financial assets at fair value through surplus or deficit




2.4.2




4 544 




3 391 





 


 



8 981 




6 744 






Total



 



235 412 




188 618 





2.4.1.   Financial assets at amortized cost









(EUR million)




 


Note


31.12.2022


31.12.2021





Loans for RRF (NGEU) and financial assistance




2.4.1.1




204 103 




163 392 






Other loans




2.4.1.2




251




176






Total



 



204 354 




163 568 






Non-current



 



199 918 




160 214 






Current



 



4 437 




3 353 





2.4.1.1.   Loans for RRF (NGEU) and financial assistance













(EUR million)




 


RRF (NGEU)


SURE


EFSM


BOP


MFA


Euratom


Total





Total at 31.12.2021




17 978 




90 567 




47 138 




201




7 170 




338




163 392 






New loans (nominal)




27 187 




8 718 




2 200 



—



7 535 



—



45 639 






Repayments



—


—



(2 700 )



—



(10)




(23)




(2 733 )






Changes in carrying amount




176




(155)




(51)




0




(60)




0




(90)






Changes in impairment



—


—


—


—



(2 023 )




(82)




(2 105 )






Total at 31.12.2022




45 340 




99 130 




46 587 




201




12 613 




232




204 103 






Non-current




45 156 




99 026 




42 666 




200




12 482 




218




199 749 






Current




184




104




3 921 




1




130




14




4 354 





The nominal value of loans at 31 December 2022 is EUR 205 301 million (2021: EUR 162 394 million), out of which UR 160 145 million refers to loans for financial assistance and EUR 45 156 million to the RRF.
The line ‘changes in impairment’ corresponds to the remeasurement of the expected credit losses as at 31 December 2022. The line ‘changes in carrying amount’ corresponds to the change in accrued interests and the change in premiums/discounts (new premiums/discounts and amortisation).
The financial assistance programmes operate on a ‘back-to-back’ basis. This means that the loans are financed by equivalent borrowings, with the same terms. The maturities are the same, the issue premiums/discounts and the costs are recharged to the loan beneficiary. At maturity, the loan beneficiary reimburses the Commission and the Commission repays the borrowing. For the RRF loans there is no back-to-back relationship between the terms of the loans and the NGEU borrowings (for the funding of these loans see note 2.11.1.1).

Recovery and Resilience Facility (RRF)

The RRF is a temporary instrument to help the Member States’ economies recover from the coronavirus pandemic and become resilient to green and digital transitions. Under the EU Recovery Instrument (NGEU), the Commission borrows funds which the RRF uses to finance Member States’ reforms and investments. These have to be in line with EU priorities and have to address the challenges identified in country-specific recommendations under the European Semester framework of economic and social policy coordination. The financing can be either a loan (repayable support) or a grant (non-repayable support, see note 2.5). The Member States can receive financing up to a previously agreed allocation for loans and grants. To benefit from the support, the Member States have to submit their national recovery and resilience plans to the European Commission. Each plan sets out the reforms and investments to be implemented by the end of 2026, defining clear milestones and targets to be analysed by the European Commission and approved by the European Council. The RRF loans can be disbursed until 31 December 2026, but only after the achievement of the agreed milestones and targets.
At 31 December 2022, the signed loan agreements were EUR 153,9 billion out of which EUR 45,2 billion are already disbursed.

Support to mitigate Unemployment Risks in an Emergency (SURE)

SURE is a European instrument whose aim is to maintain people in work and support jobs affected by the coronavirus pandemic. The instrument enables Member States to request EU financial assistance to help finance sudden and severe increases of national public expenditure related to national short-time work schemes and similar measures, including for self-employed persons, or to some health-related measures, in particular in the work place in response to the crisis. It can provide financial assistance of up to EUR 100 billion in the form of loans to affected Member States.
At 31 December 2022 the Council had approved and the Commission had signed loan agreements for EUR 98,4 billion of financial assistance. The availabillity of the instrument ended at 31 December 2022 and there are no pending disbursements.

European Financial Stabilisation Mechanism (EFSM)

The EFSM enabled 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 could take the form of a loan or credit line. The programme has expired but remains in place for specific tasks like the maturity extension of the loans. In December 2021, Portugal requested the extension for EUR 2,2 billion of the total EUR 2,7 billion loan due in 2022. The Commission has borrowed EUR 2,2 billion to roll-over the loan, which has been extended by 4,5 years. The remaining EUR 0,5 billion was repaid.

Balance of Payments (BOP)

This is a policy-based financial instrument that provides medium-term financial assistance to Member States 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. There are no undrawn amounts from signed loan agreements.

Macro-Financial Assistance (MFA)

The MFA is a form of financial assistance from the EU to partner countries experiencing a balance of payment crisis. It takes the form of medium or 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 programme.
During 2022, additional loans of EUR 7,5 billion were disbursed, including EUR 7,2 billion of new loans to Ukraine, granted with a view to supporting Ukraine’s economic stabilisation and to strengthen the immediate resilience of the country subsequent to Russia’s unprovoked and unjustified war of aggression. Total nominal exposure of MFA loans outstanding at year end amounted to EUR 15 billion, out of which EUR 11,6 billion was granted to Ukraine.
MFA loans and related borrowings are guaranteed by the CPF and then, if needed, by the EU budget. In addition, loans provided to Ukraine under the MFA exceptional financial assistance programme in 2022, totalling EUR 6 billion, are also covered by a system of guarantees from Member States for 61 % of the exposure on top of the 9 % first losses covered by the CPF. EUR 1,6 billion of these guarantees have been signed by the end of 2022, while another EUR 1,6 billion were signed by 31 May 2023. The remaining guarantees are still subject to the administrative procedures of the Member States, which are expected to be finalised in the course of 2023.
As at 31 December 2022, the impairment allowance for MFA loans is EUR 2,3 billion (2021: EUR 293 million), out of which EUR 2,2 billion refer to the loans to Ukraine. While all amounts due in 2022 from Ukraine were paid on time and at the moment of preparation of the annual accounts there is no overdue interests on loans to Ukraine, the impairment reflects the life-time expected credit losses from the EU loans to Ukraine estimated with a particular prudence due to significant uncertainties involved.
Guarantees provided by the Member States for the exceptional MFA constitute a credit enhancement for the EU budget and thus they reduce the expected credit losses on those loans to EUR 0,3 billion (out of the entire impairment allowance of EUR 2,2 billion covering the total MFA loans to Ukraine). See also note 6.5.
As at 31 December 2022, there are EUR 285 million conditional undrawn amounts from signed MFA loan agreements (2021: EUR 625 million).

European Atomic Energy Community loans (Euratom)

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. Out of the total Euratom loans outstanding at 31 December 2022, EUR 300 million (nominal value) relates to loans to Energoatom, guaranteed by Ukraine. For these loans an impairment allowance of EUR 95 million has been recognised.
At 31 December 2022, the Commission had received guarantees from third parties of EUR 327 million (2021: EUR 350 million) to cover Euratom loans. There are no undrawn amounts from signed loan agreements.

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








 


31.12.2022


31.12.2021





RRF (NGEU)




0,14  % — 2,54  %




0,11  % — 0,12  %






SURE




(0,48 ) % — 2,78  %




(0,48 ) % — 0,77  %






EFSM




(0,03 ) % — 3,79  %




(0,03 ) % — 3,79  %






BOP




2,95  %




2,95  %






MFA




(0,14 ) % — 3,70  %




(0,14 ) % — 3,70  %






Euratom




(0,08 ) % — 1,53  %




(0,08 ) % — 1,66  %






EU budget guarantee

The EU budget guarantees the Commission borrowings which finance the loans under the RRF and financial assistance programmes. If there would be unpaid loan amounts in the future, the EU budget may have to repay the related borrowing amounts.






—


NGEU borrowings and borrowings related to EFSM and BOP loans to Member States, are guaranteed solely by the EU budget;










—


Borrowings related to SURE are guaranteed by the EU budget and underpinned by Member States guarantees of EUR 25 billion; and










—


MFA borrowings for loans to third countries are firstly covered by the CPF (see note 2.4.2) and then by the EU budget, with exception of the MFA exceptional financial assistance loans to Ukraine of EUR 6 billion that are covered by guarantees provided by the Member States after the first 9 % of losses to be covered by CPF;










—


Euratom borrowings are firstly covered by the by 3rd party guarantees, then by CPF (see note 2.4.2), and then by the EU budget.




For more details, see note 6.6.

UK obligations arising from its departure from the EU

In accordance with Article 143 of the Withdrawal Agreement, the UK shall be liable to the Union for its share of contingent financial liabilities related to the loans for financial assistance (EFSM, MFA, BOP and Euratom) approved/decided by the withdrawal date, 31 January 2020. Article 143 requires that in case of a default under a loan for financial assistance that has been approved before the withdrawal date, the UK would be liable to the Union for its share of payments made by the Union under the defaulted operation, unless this could be covered by the UK share of provisioning held in the Guarantee Fund for external actions compartment of the CPF where this is relevant (i.e. MFA and Euratom loans in third countries) — see note 4.1.1.
The EU’s outstanding contingent liability relating to the above loans for financial assistance amounted to EUR 53,9 billion as at the withdrawal date. Following repayments since that date, the value of these loans covered by the EU guarantee at 31 December 2022 is EUR 52,4 billion — the UK’s share of this is EUR 6,5 billion.
2.4.1.2.   Other loans

These include 3 types of loans:






(a)


Loans granted from EU budget programmes (e.g. the MEDA programme Euro-Mediterranean Partnership and the EU Employment and Social Innovation programme). These loans total EUR 79 million as at 31 December 2022 (2021: EUR 74 million).










(b)


Subrogated loans: These are loans disbursed by the EIB and guaranteed by the EFSI and ELM programmes. The loans defaulted, the Commission paid the guarantee calls and therefore holds the recovery rights. As a result the loans are now recognised on the EU balance sheet. At 31 December 2022, the Commission holds the recovery rights for EUR 1,0 billion of such loans, including accrued interests (2021: EUR 855 million). However, after taking into account the expected credit losses, the amount recognised on the balance sheet is EUR 126 million (2021: EUR 48 million).










(c)


Term deposits of EUR 46 million (2021: EUR 54 million) with maturity of over 3 months that do not meet the definition of cash equivalents.




2.4.2.   Financial assets at fair value through surplus or deficit (FVSD)









(EUR million)




 


Note


31.12.2022


31.12.2021





Financial assets at FVSD non-derivatives




2.4.2.1




30 073 




24 223 






Financial assets at FVSD derivatives




2.4.2.2




984




828






Total



 



31 057 




25 051 






Non-current



 



26 513 




21 660 






Current



 



4 544 




3 391 





2.4.2.1.   Financial assets at FVSD non-derivatives


Financial assets at FVSD non-derivatives by type








(EUR million)




 


31.12.2022


31.12.2021





Debt securities




24 647 




19 326 






MMFs, ETFs and investments in pooled portfolios




2 895 




2 513 






Other equity investments




2 532 




2 384 






Total




30 073 




24 223 






Non-current




25 534 




20 834 






Current




4 539 




3 390 





Debt securities are mainly sovereign and corporate bonds. They are held in the funds (portfolios) managed by the Commssion (mainly CPF, BUFI) or by the EIB on behalf of the EU (mainly H2020, Innovation Fund). The portfolios’ performance is evaluated on a fair value basis (market value).
Money market funds (MMFs) are mutual funds that invest in short-term debt securities (e.g. the EIB unitary fund). The exchange-traded funds (ETFs) are investment funds that are traded on stock exchanges. They track indices and hold assets such as stocks, bonds, currencies, futures contracts. The investments in pooled portfolios are the EU funds of CEF and H2020 programmes pooled together with Member States’ funds from the NER 300 programme. They are used to provide guarantees to the EIB’s financing and investment operations.
The ‘other equity investments’ mainly refer to investing EU budget money — via implementing partners — in venture capital or other types of investment funds for pursuing EU policy objectives: for example, enhancing access to finance for start up SMEs, research and innovation as well as infrastructure both inside and outside the EU.

Financial assets at FVSD non-derivatives by programme








(EUR million)




 


31.12.2022


31.12.2021





Innovation Fund




6 476 




4 195 






BUFI investments




2 015 




1 257 






ECSC in Liquidation




1 222 




1 382 






European Bank for Reconstruction and Development




188




188






EEAS local staff pension plan




84




69





 



9 985 




7 091 






Budgetary Guarantee Funds:



 


 





Common Provisioning Fund




14 057 




11 272 





 



14 057 




11 272 






Financial Instruments financed by the EU budget:



 


 





Horizon 2020 and Horizon Europe




3 766 




3 342 






Connecting Europe Facility




697




762






EU SME Equity Facilities




512




684






European Fund for South East Europe




214




213






Green for Growth Fund




107




146






Energy Efficiency Finance Facility




109




107






Other




628




606





 



6 031 




5 861 






Total




30 073 




24 223 






Non-current




25 534 




20 834 






Current




4 539 




3 390 






Innovation Fund (IF)

The Innovation Fund was set up by Directive (EU) 2018/410 of the European Parliament and of the Council (19) and establishes a system for the trading of greenhouse gas emission allowances within the Union. The purpose is to use the revenue to support innovation in low-carbon technologies and processes in certain economic sectors. The Innovation Fund receives the revenue from the progressive monetisation of 450 million allowances and also any unspent funds from the 300 million allowances available for NER300 programme (see note 3.8). The EIB manages the monies, until they are used for the intended purpose, and invests them in debt securities.

BUFI investments

The Commission has established the Budget Fines fund (‘BUFI’) for managing the money it provisionally receives for competition fines under appeal. Until the final court decision, the Commission invests the money in debt instruments. During 2022, a fine recipient provisionally paid EUR 0,9 billion, which was invested in this fund — this is the main reason for the increase here.

ECSC in Liquidation

The ECSC Treaty expired on 23 July 2002 and all the ECSC assets were transferred to the European Union and were earmarked for research in the sectors associated with the coal and steel industries, for example breakthrough technologies that lead to near-zero-carbon steelmaking. The Commission invests the monies in debt securities, until they are granted for research.

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 2022 were 90 044 (2021: 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 that their redemption is capped at the maximum of the original purchase cost. The EU measures its investment in the EBRD at fair value. The original purchase cost is considered the best estimate of the fair value, in particular due to the contractual restrictions referred to above. Although the 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 cost is the best estimate of the fair value in this situation.

Common Provisioning Fund (CPF)

The EU guarantees the equity investments and loans of implementing partners to sovereigns and companies. In order to pay the claims from defaults or other losses, the EU Budget, in accordance with the legal acts, is gradually setting money aside to build a capital buffer, i.e. the CPF. The CPF also covers borrowings the Commission issues to finance MFA and Euratom loans to non Member States.
In compliance with the Financial Regulation, the Commission has set up the CPF to manage the capital buffer (‘provisioning’) for all budgetary guarantees and financial assistance loans to third countries, in one common portfolio. In addition to the EU budget provisioning, the CPF receives recoveries from defaulted operations, the returns on its investments and the receipts from the EU budgetary guarantees remuneration. The CPF may also receive voluntary contributions from Member States and other contributors that are — in this way — increasing the available EU budget guarantees.
The CPF allocates the incoming contributions into compartments depending on the contributing programme. The legal acts of the programmes set out the necessary provisioning for the guarantees provided. The EU budget pools these individually provisioned funds in the CPF so as to optimise the asset management.
As at 31 December 2022 the assets of the CPF were EUR 14,4 billion, out of which EUR 14,1 billion were invested in financial assets at FVSD non-derivatives (debt securities).

Horizon 2020 and Horizon Europe

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 and the SME Initiative Uncapped Guarantee Instrument (SIUGI) — guarantees facilities managed by the EIF, providing guarantees and counter-guarantees to financial intermediaries for new portfolios of loans (under SIUGI the Commission shares the financial risk related to the guarantee given with Member States, EIF and EIB);










—



The InnovFin Equity Facility for R&I providing for investments in venture capital funds which are managed by the EIF; and










—



The EIC Fund (European Innovation Council Fund) which provides equity financing to accelerate innovation and market deployment actions. The EIC fund is funded from the Horizon Europe and H2020 programmes. To date, the investments mainly refer to the H2020 programme.





Connecting Europe Facility

Pursuant to Regulation (EU) No 1316/2013 of the European Parliament and of the Council (20), 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. It offers risk sharing for debt financing in the form of senior and subordinated debt or guarantee as well as support for project bonds guaranteed by the EU.

EU SME Equity Facilities

These are equity instruments financed by the COSME, CIP and MAP programmes and the Growth and Employment Initiative, 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.

Fair value hierarchy of non-derivative financial assets at FVSD








(EUR million)




Type of financial asset


31.12.2022


31.12.2021





Level 1: Quoted prices in active markets




24 677 




19 336 






Level 2: Observable inputs other than quoted prices




3 061 




2 698 






Level 3: Valuation techniques with inputs not based on observable market data




2 335 




2 190 






Total




30 073 




24 223 





During the period, there were no transfers between level 1 and level 2 of the fair value hierarchy.

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







(EUR million)




Fair value movements


 






Opening balance at 1.1.2022






2 190 







Investments during the period




383






Capital repayments




(143)






Revenues settled




(115)






Gains or losses for the period in surplus or deficit




19






Transfers into level 3




—






Transfers out of level 3



—





Other




—






Closing balance at 31.12.2022




2 335 





The net losses for level 3 non-derivative assets held at end of 2022 were EUR 87 million (2021: net gains of EUR 295 million). They are included as financial revenue under ‘Gains on financial assets or liabilities at FVSD non-derivatives’ (see note 3.9) and as finance costs under ‘Losses from on financial assets or liabilities at FVSD non-derivatives’ (see note 3.15).
2.4.2.2.   Financial assets and liabilities at FVSD derivatives


Financial assets and liabilities at FVSD derivatives by type












(EUR million)




Type of derivative


31.12.2022


31.12.2021




Notional amount


Fair Value Asset


Fair Value Liability


Notional amount


Fair Value Asset


Fair Value Liability





Foreign currency forward contract




488




5



—



646




2



—





Guarantee on equity portfolio




4 694 




979




(17)




4 148 




826




(1)






Guarantees on FX risk




87



—



(8)




28



—



(4)






Total




5 269 




984




(25)




4 822 




828




(5)






Non-current



 



979




(9)



 



826




(5)






Current



 



5




(15)



 



2




—






Foreign currency forward contract

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 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.

Guarantees on equity portfolios

The heading ‘Guarantee on equity portfolio’ comprises guarantees given by the EU to financial institutions on portfolios of equity investments. These guarantees are classified as derivative financial instruments and accounted for as a financial asset or financial liability at fair value through surplus or deficit since they do not meet the definition of a financial guarantee liability — see note 1.5.12. The EU financial liability is measured based on the value of the underlying investments.
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 3,5 billion (2021: EUR 3,1 billion). The fair value of the EU guarantee on the EFSI equity portfolios totalled EUR 967 million (2021: EUR 763 million).

Guarantee on foreign currency risk

The EU guarantees foreign currency (‘FX’) risk under the EFSD Guarantee, where it guarantees swap and forward contracts that aim at hedging against foreign currency risks for investing operations in emerging markets. The EU also covers the devaluation of the foreign exchange currency (UAH) related to loans given by financial institutions to SMEs in Ukraine under the Eastern Partnership SME Finance Facility.

Fair value hierarchy of derivative financial assets and liabilities










(EUR million)




Type of derivative


31.12.2022


31.12.2021




Fair Value Asset


Fair Value Liability


Fair Value Asset


Fair Value Liability





Level 1: Quoted prices in active markets



—


—


—


—





Level 2: Observable inputs other than quoted prices




5




(3)




2




(2)






Level 3: Valuation techniques with inputs not based on observable market data




979




(21)




826




(2)






Total




984




(25)




828




(5)





During the period, there were no transfers between level 1 and level 2. Derivatives in Fair Value Level 3 include mainly guarantees on equity portfolios.

Reconciliation of derivative financial assets and liabilities measured using valuation techniques with inputs not based on observable market data (Level 3)







(EUR million)




Fair value movements


 






Opening balance asset/(liability) as at 1.1.2022






824







Guarantee call claims paid




51






Guarantee calls returned




—






Revenues from guarantee settled




(98)






Gains or losses for the period in surplus or deficit




181






Transfers into level 3



—





Transfers out of level 3



—





Other



—





Closing balance at 31.12.2022




958





The net gains for level 3 derivative assets held at end of 2022 were EUR 181 million (2021: net gains of EUR 777 million). This amount is included under ‘Gains on financial assets or liabilities at FVSD derivatives’ in financial revenue (see note 3.9).
2.5.   PRE-FINANCING









(EUR million)




 


Note


31.12.2022


31.12.2021





Non-current



 


 


 





Pre-financing




2.5.1




47 179 




57 764 






Other advances to Member States




2.5.2




216




2 901 






Contribution to Trust Funds



 



86




126





 


 



47 482 




60 792 






Current



 


 


 





Pre-financing




2.5.1




46 927 




28 427 






Other advances to Member States




2.5.2




6 087 




4 229 





 


 



53 014 




32 656 






Total



 



100 496 




93 447 





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.
2.5.1.   Pre-financing












(EUR million)




 


Gross amount


Cleared via accruals


Net amount at 31.12.2022


Gross amount


Cleared via accruals


Net amount at 31.12.2021





Shared management



 


 


 


 


 


 





EAFRD & other rural development instruments




3 051 




(527)




2 525 




3 172 




(208)




2 965 






ERDF & CF




29 812 




(4 932 )




24 880 




23 531 




(4 571 )




18 960 






ESF




11 621 




(1 974 )




9 647 




9 085 




(1 823 )




7 263 






Other




8 063 




(4 498 )




3 565 




4 836 




(2 263 )




2 572 





 



52 548 




(11 931 )




40 617 




40 624 




(8 865 )




31 760 






Direct Management



 


 


 


 


 


 





Implemented by:



 


 


 


 


 


 





Commission




41 722 




(13 695 )




28 027 




46 494 




(11 970 )




34 525 






of which RRF (NGEU)




28 347 




(5 389 )




22 958 




34 879 




(4 065 )




30 814 






EU executive agencies




29 566 




(17 104 )




12 462 




23 931 




(15 030 )




8 901 






Trust funds




738




(582)




156




1 140 




(847)




293





 



72 026 




(31 381 )




40 645 




71 565 




(27 847 )




43 718 






Indirect Management



 


 


 


 


 


 





Implemented by:



 


 


 


 


 


 





Other EU agencies & bodies




2 892 




(1 262 )




1 631 




1 657 




(687)




971






Third countries




1 797 




(1 275 )




522




1 874 




(1 261 )




614






International organisations




12 488 




(7 491 )




4 997 




9 545 




(5 955 )




3 590 






Other entities




15 208 




(9 513 )




5 695 




12 992 




(7 453 )




5 539 





 



32 385 




(19 540 )




12 845 




26 069 




(15 356 )




10 713 






Total




156 958 




(62 852 )




94 106 




138 258 




(52 068 )




86 191 






Non-current




47 179 



—



47 179 




57 764 



—



57 764 






Current




109 778 




(62 852 )




46 927 




80 494 




(52 068 )




28 427 





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, the largest part of pre-financing relates to the programming period 2014–2020. New pre-financing payments have been made in the cohesion area, mainly related to REACT EU (EUR 3,5 billion) and the 2021–2027 programming period (EUR 5,4 billion).
For 2014–2020 period there is an initial pre-financing which can only be cleared (i.e. recognised in the statement of financial performance) towards the closure part of the programming period and is shown as a non-current pre-financing. As we are approaching the end of the implementation period of this previous MFF and more amounts become due within 12 months, this initial prefinancing is gradually reclassified to current pre-financing and its clearing has also started. This situation is the main reason for the decrease in non-current pre-financing and a big factor in the increase in the current amount.
For direct management, the biggest amounts of pre-financing are those related to the non-reimbursable support concerning the RRF instrument which began in 2021, EUR 23 billion net at year-end (2021: EUR 30,8 billion). These have decreased as amounts have been cleared as milestones have been achieved by Member States during 2022. The other significant amounts, in total EUR 13 billion (2021: EUR 8,5 billion), refer to the Research area (mainly Horizon 2020 and Horizon Europe, implemented by the EU executive agencies and the Commission); as the new MFF is gaining speed, more grants have been awarded and consequently more pre-financing has been paid.
For indirect management, the pre-financing covers mainly internal policies programmes like Galileo and EGNOS (Space Programmes), but also instruments related to Global Europe (including neighbourhood, development and international cooperation instruments). The most notable increase in pre-financing under this heading, EUR 1,1 billion, is related to Neighbourhood, Development and Cooperation instrument and its precursors. Similar to the direct management pre-financing, the increase here relates mainly to the new payments made under the 2021–2027 programming period as it gathers pace.

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 making 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. At 31 December 2022 the nominal value of guarantees received in respect of pre-financing amounted to EUR 518 million while the on-going value of those guarantees was EUR 464 million (2021: EUR 433 million and EUR 383 million respectively).
Certain pre-financing amounts paid out under the 7th Research Framework Programme for research and technological development (FP7) and under the Horizon 2020 and Horizon Europe Programmes are effectively covered by the Mutual Insurance Mechanism (MIM), previously known as the Participants Guarantee Fund (PGF). The MIM 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 under those programmes. All participants of indirect actions receiving a grant from the EU contribute 5 % of the maximum EU contribution to the MIM’s capital, which is invested in the financial markets by the Commission in order to generate interest. The interest may be used to cover debts not honoured by a defaulting participant towards the Union. At the end of the indirect action the contributions are paid back to the participants. The EU (represented by the Commission) acts as an executive agent of the participants of the MIM, but the fund is owned by the participants. The MIM is thus a separate entity that is not consolidated in these EU annual accounts.
At 31 December 2022, pre-financing amounts covered by the MIM totalled EUR 2,7 billion (2021: EUR 2,4 billion). The MIM total assets, including financial assets managed by the Commission, amounted to EUR 2,6 billion (2021: EUR 2,5 billion).
2.5.2.   Other advances to Member States








(EUR million)




 


31.12.2022


31.12.2021





Advances to Member States for financial instruments under shared management




3 390 




3 647 






Aid Schemes




2 914 




3 483 






Total




6 303 




7 130 






Non-current




216




2 901 






Current




6 087 




4 229 






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.
Under cohesion policy 2014–2020, out of EUR 17 181 million paid, it is estimated that EUR 3 303 million was unused at 31 December 2022. 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 1 449 million paid excluding amounts still in pre-financing, out of which EUR 292 million is estimated as unused).
For rural development, EUR 86 million remained unused at year-end.

Aid Schemes

Similar to the above, reimbursed amounts corresponding to 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.
For the MFF 2014–2020, the unused amounts at year-end were estimated at EUR 1 198 million for cohesion policy and EUR 1 670 million for agriculture and rural development.
2.6.   EXCHANGE RECEIVABLES AND NON-EXCHANGE RECOVERABLES









(EUR million)




 


Note


31.12.2022


31.12.2021





Non-current



 


 


 





Recoverables from non-exchange transactions




2.6.1




16 339 




34 892 






Receivables from exchange transactions




2.6.2




2 532 




5 750 





 


 



18 870 




40 642 






Current



 


 


 





Recoverables from non-exchange transactions




2.6.1




25 832 




29 473 






Receivables from exchange transactions




2.6.2




3 497 




2 323 





 


 



29 329 




31 796 






Total



 



48 199 




72 438 





2.6.1.   Recoverables from non-exchange transactions









(EUR million)




 


Note


31.12.2022


31.12.2021





Non-current



 


 


 





Member States




2.6.1.1




503




2 497 






UK Withdrawal Agreement




2.6.1.2




14 810 




30 839 






Accrued income and deferred charges




2.6.1.4




1 011 




1 556 






Other recoverables



 



15




—





 


 



16 339 




34 892 






Current



 


 


 





Member States




2.6.1.1




6 036 




5 682 






UK Withdrawal Agreement




2.6.1.2




9 061 




10 913 






Competition fines




2.6.1.3




9 420 




11 698 






Accrued income and deferred charges




2.6.1.4




1 239 




1 097 






Other recoverables



 



75




83





 


 



25 832 




29 473 






Total



 



42 170 




64 365 





2.6.1.1.   Recoverables from Member States








(EUR million)




 


31.12.2022


31.12.2021





TOR A accounts




4 397 




6 137 






TOR separate accounts




1 356 




1 405 






Own resources to be received




7




15






Impairment




(686)




(875)






Other




—




—






Own resources recoverables




5 073 




6 683 






European Agricultural Guarantee Fund (EAGF)




1 621 




1 525 






European Agricultural Fund for Rural Development (EAFRD) and other rural development instruments




189




668






Impairment




(591)




(843)






EAGF and rural development recoverables




1 219 




1 350 






Pre-financing recovery




13




26






VAT paid and recoverable




54




45






Other recoverables from Member States




180




73






Total




6 539 




8 178 






Non-current




503




2 497 






Current




6 036 




5 682 





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

Own resources recoverables

The ‘A accounts’ refer to the monthly statements in which the Member States communicate the established traditional own resources (TOR) entitlements. The table lists the ‘A accounts’ amounts that have not yet been paid to the Commission. TOR are mainly customs duties collected by Member States on behalf of the Commission.
The ‘A accounts’ have tended to have a level in the range of EUR 3 to 4 billion at year-end. However, in 2021 the amounts were significantly higher as they included TOR amounts related to undervaluation cases. The evolution in 2022 is mainly explained by the payments received in relation to these cases as well as the adjustments of the debts following a Court judgement.
In the UK infringement case (Infringement No 2018/2008), on 8 March 2022, the Court issued the related judgement and confirmed that the UK had infringed its obligations to protect the Union budget. The case originated in a 2017 OLAF report, that found that importers in the UK had evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations at the time of importation. Based on a methodology developed by OLAF and the JRC, and on the information available, the Commission estimated that the infringement 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 of 20 % to be retained by the UK from the gross amount of EUR 2,7 billion). The Court broadly supported the Commission’s claim in its judgment, but requested the Commission to re-calculate the amount due by taking into account additional elements for the quantification of the customs duties losses. In June 2022 UK paid a provisional amount to the Commission.
The Commission has assessed the judgment and in particular the comments of the Court with respect to the determination of the amounts due. Following a detailed analysis, the final principal amount was established at EUR 1,6 billion (net amount after deduction of 20 % collection costs). The UK paid the oustanding amount in January 2023. Consequently, late payment interest was also recalculated amounting to EUR 1,4 billion, which was paid by the UK in February 2023. Both payments were made after the deduction of the UK share under the provisions of the Withdrawal Agreement (see note 2.6.1.2).
Following these payments, the Commission closed the infringement case on 15 February 2023.
Applying the same parameters for the recalculation of the estimated TOR losses due by the 27 Member States for textiles and footwear imported from China at significantly understated value, a negative adjustment of EUR 0,6 billion has been applied to the recoverables at 31 December 2022. Further clarifications with Member States are ongoing to establish the final amounts due. The late payment interest due in relation to these cases is currently estimated at EUR 0,6 billion.

                                 ‘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 (i.e. guarantee) has been provided (or 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. The impairment amounts represent generally a similar percentage of the principal amount at each year-end.

EAGF and Rural Development recoverables

This item primarily covers the amounts owed by Member States at 31 December 2022, as declared and certified by the Member States as at 15 October 2022. An estimation is made for the recoverables arising after this declaration and up to 31 December 2022. 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.   UK Withdrawal Agreement

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’ (ref. 2019/C 384 I/01) (the ‘Withdrawal Agreement’ or ‘WA’) signed between the EU and the UK establishes various financial obligations on both parties. As at 31 December 2022, the net receivable from the UK based on these obligations amounted to EUR 23 871 million (2021: EUR 41 753 million), of which EUR 9 061 million is to be paid within the 12 months following the reporting date (2021: EUR 10 913 million):










(EUR million)




 


Article 140


Article 142


Other


31.12.2022


31.12.2021





Due from the UK




17 029 




9 587 




68




26 683 




43 982 






Due to the UK



—


—



(2 812 )




(2 812 )




(2 229 )






Total




17 029 




9 587 




(2 744 )




23 871 




41 753 






Non-current




8 465 




9 298 




(2 953 )




14 810 




30 839 






Current




8 563 




288




209




9 061 




10 913 






UK share (Article 139)

According to Article 139, the United Kingdom’s share of the financial obligations arising out of the WA shall be a percentage calculated as the ratio between the own resources made available by the United Kingdom in the years 2014 to 2020 and the own resources made available during that period by all Member States and the United Kingdom as adjusted by the amount communicated to the Member States before 1 February 2022. The final United Kingdom share has been calculated as being 12,431681219587700 %.

Payments under the Withdrawal Agreement

The payment mechanism to be applied to the obligations provided for between the two parties is laid out in Article 148. In summary, the EU invoices the net amounts due from the UK in April and September of each year and the UK pays these on a monthly basis. The amounts reported in April of a given year are to be paid in four equal monthly instalments from June to September of that year. The amounts reported in September are to be paid in eight equal monthly instalments from October of that year to May of the following year. Since some amounts reported are necessarily based on forecasts and estimates, the reporting is updated each year based on actual figures.
In 2022 the total amount reported to the UK under Article 136, and Articles 140 to 147, was EUR 9 815 million (2021: EUR 11 930 million), of which EUR 3 418 million was reported in April 2022 and EUR 6 397 million was reported in September 2022 (2021: EUR 3 763 million and EUR 8 166 million, respectively).
The total payments received in 2022 amounted to EUR 10 921 million (2021: EUR 6 826 million). Out of this amount, EUR 5 104 million related to the remainder of the September 2021 report and was paid in five equal instalments in the period January to May 2022 (2021: nil), EUR 3 418 million related to the 2022 April report and was paid in four equal monthly instalments in the period June to September 2022 (2021: EUR 3 763 million), and EUR 2 399 million related to the 2022 September report and was paid in three equal instalments in the period October to December (2021: EUR 3 062 million).









(EUR million)




 


Remainder of September 2021 report:
(due and paid from January to May 2022)


April 2022 report
(due and paid from June to September 2022)


September 2022 report:
(due and paid from October to December 2022)


Total payments in 2022





Article 140




5 090 




4 029 




2 437 




11 556 






Article 142




18




236




11




265






Article 136




29




—




7




37






Article 147




—




6




—




6





 



5 138 




4 271 




2 455 




11 864 






Article 136



—



(573)




—




(573)






Article 141




(34)




(0)




(56)




(90)






Article 143




—




(163)




—




(163)






Article 144




—




(73)




—




(73)






Article 145




—




(37)




—




(37)






Article 146




—




(7)




—




(7)





 



(34)




(853)




(56)




(943)






Total




5 104 




3 418 




2 399 




10 921 





The remaining balance of the September 2022 invoice at the end of the year, amounting to EUR 3 998 million, was paid in five equal monthly instalments in the period January to May 2023 (2022: EUR 5 104 million).

Article 140 — Outstanding Commitments

The UK has committed to pay to the EU its share of the outstanding budgetary commitments at 31 December 2020 (the so called ‘Brexit RAL’), as adjusted by the requirements of Article 140. At 31 December 2022, the total amount recognised as a receivable amounted to EUR 17 029 million (2021: EUR 28 620 million), of which EUR 8 563 million is payable within the 12 months following the year-end. The following table presents the main movements between the total amount recognised as a receivable at 31 December 2021 and the total amount recognised as a receivable at 31 December 2022:






(EUR million)





Amount owed by the UK at 31.12.2021




28 620 






Net financial corrections related to 2014–2020 or previous programme periods (including adjustment of 2021 deductions)




(123)






TOR relating to 2020 and made available to the Union in 2022


(including adjustment of 2021 deductions)



—





Net payments received from the UK in 2022




(11 556 )






Adjustment of estimated non-implementation




88






Total




17 029 






Non-current




8 465 






Current




8 563 





The year-on-year decrease of the total amount recognised as a receivable amounted to EUR 11 591 million and was mainly due to the payments received from the UK in 2022 (EUR 11 556 million).
The total deduction for net financial corrections related to 2014–2020 or previous programme periods, amounting to EUR 123,5 million, comprises the amounts invoiced in September 2022 which were not yet included in the 2021 annual accounts (EUR 39,1 million, payable from January to May 2023) and the amounts to be invoiced in September 2023 and payable from October 2023 to May 2024 (EUR 84,4 million).
The total deduction for TOR relating to 2020 and made available to the Union in 2022 amounted to zero, as there were no adjustments to the amounts already invoiced and no known amounts to be included in the April 2023 or September 2023 invoice.
The amount to be paid within 12 months from the reporting date (EUR 8 563 million), comprises the remaining balance of the September 2022 invoice (EUR 4 061 million), the amount to be invoiced in April 2023 (EUR 2 647 million) and the amount to be invoiced in September 2023 and payable in the period October to December 2023 (EUR 1 855 million). The amount invoiced in April 2023 is composed of EUR 2 515 million relating to the UK’s share of the estimated RAL implementation in 2023 and EUR 132 million relating to the adjustment of the UK share of the RAL due to implementation in 2022. The amount to be invoiced in September 2023 and payable in the period October to December 2023 is made up of EUR 1 887 million relating to the UK’s share of the estimated RAL implementation in 2023 and EUR 32 million relating to the deductions for net financial corrections.
The estimated non-implementation has been adjusted by EUR 88 million to reflect the actual decommitments in 2021 and 2022 as well as the estimated decommitments of the remaining stock of Brexit-RAL at year-end 2022.

Article 142 — Union liabilities at end 2020

The UK has committed to pay the EU its share of Union liabilities at end 2020 with the exception of liabilities: (a) with corresponding assets; and (b) relating to the operation of the budget and the management of own resources (including amounts already covered by the outstanding commitments, see Article 140 above). The main amount here concerns the EU post-employment benefit liabilities (pensions and sickness insurance) existing at 31 December 2020.


Outstanding 2020 liabilities under Article 142 (6)











(EUR million)




 


Pension Scheme of European Officials


Joint Sickness Insurance Scheme


31.12.2022


31.12.2021





Outstanding 2020 liabilities




67 840 




5 168 




73 008 




114 507 






UK Share




8 434 




642




9 076 




14 235 






PSEO/JSIS contributions




250




9




259




236






Total




8 684 




651




9 335 




14 471 






Non-current




8 434 




642




9 076 




14 235 






Current




250




9




259




236





According to the default payment mode laid out in Article 142 (6), the UK contributes annually to the net payments made from the Union budget in the preceding year to each beneficiary of the Pension Scheme of European Officials (PSEO) and to the related contribution of the Union budget to the Joint Sickness Insurance Scheme (JSIS) for each beneficiary or person who benefits through a beneficiary. The contributions are payable in four monthly instalments from June to September of the respective year.
The UK share of the net payments made from the Union budget in 2022 to the beneficiaries of the PSEO and to JSIS amounted to EUR 250 million and EUR 9 million, respectively. These amounts were communicated to the UK as part of the April 2023 invoice (and thus be payable in four equal monthly instalments in the period June to September 2023).
In addition, at 31 December 2022 the outstanding 2020 UK liabilities under Article 142 (6), relating to the Pension Scheme of the European Officials (PSEO) and the Joint Sickness Insurance Scheme (JSIS) amounted to EUR 8 434 million and EUR 642 million, respectively (2021: EUR 13 032 million and EUR 1 203 million). The decrease for the PSEO and JSIS scheme was driven by the actuarial gain from changes in financial assumptions — see note 2.9 for more details. It is noted that while actuarial gains (or losses) from changes in financial assumptions impact the present value of the outstanding 2020 liabilities calculated on the basis of IPSAS 39/EAR 12, they do not change either the amount of benefits that will have to be actually paid by the EU, or, by implication, the UK contributions to these payments as due under the default settlement mechanism of Article 142 (6).
As at 31 December 2022, the UK has not made use of the early settlement option providing for the payment of the outstanding 2020 PSEO and JSIS liabilities, calculated using actuarial valuations made in accordance with IPSAS 39/EAR 12, in five equal instalments following the procedure laid out in the last subparagraph of Article 142 (6).


Outstanding 2020 liabilities under Article 142 (5)


According to Article 142 (5), the UK contributes to the liabilities relating to the Other retirement (pension) schemes as they were recorded in the consolidated accounts of the Union for the financial year 2020 in 10 instalments starting on 31 October 2021 (with each annual instalment payable in eight monthly instalments from October to May the following year). These liabilities in the consolidated annual accounts of the Union for the financial year 2020 amounted to EUR 2 344 billion, resulting in a UK share at 31 December 2020 of EUR 291 million. Taking into account the amounts received from the UK up until year-end 2022, totalling EUR 40 million, the outstanding UK share of the Other retirement (pension) schemes decreased to EUR 251 million at 31 December 2022, of which EUR 29 million is to be paid within the 12 months following the year-end.
For more information regarding the employee benefit schemes, please see note 1.5.10 and note 2.9.

Other articles








(EUR million)




 


31.12.2022


31.12.2021





Due from the UK:



 


 










 



Article 136








—




557











 



Article 147








68




53





 



68




610






Due to the UK:



 


 










 



Article 136








(678)




—











 



Article 141








(1 637 )




(1 818 )











 



Article 143








(313)




(163)











 



Article 144








(54)




(73)











 



Article 145








(111)




(148)











 



Article 146








(20)




(27)





 



(2 812 )




(2 229 )






Total




(2 744 )




(1 618 )






Non-current




(2 953 )




(711)






Current




209




(908)







Article 136 — Provisions applicable in relation to own resources


Article 136 establishes the provisions applicable after 31 December 2020 in relation to own resources. The UK is entitled to receive or obliged to pay, as the case may be, its share where the own resources related to the financial years up to and including 2020 are to be made available, corrected or subject to adjustments after 31 December 2020. Thus, the UK is subject to any adjustments of VAT and GNI own resources that relate to the financial years up to and including 2020. These VAT and GNI adjustments will however only be made if decided upon no later than 31 December 2028. The updates of the UK corrections of 2018–2019 are also to be taken into account.
Moreover, the UK is required to pay the traditional own resources collected by them after 28 February 2021, but related to the years 2020 and earlier. Their share of the total made available is to be deducted from this amount. The separate account for traditional own resources shall be fully liquidated at 31 December 2025.
Between January and February 2023 the United Kingdom paid an outstanding debt originating in a case where importers in the UK had evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations at importation. The principal and the related late interest totalled EUR 1,6 billion and EUR 1,4 billion respectively (see note 2.6.1.1). The UK share defined in Article 139 of the Withdrawal Agreement amounted to EUR 370 million and was offset with the payments received from the UK in 2023.
The net outstanding amount due from the EU to the UK at 31 December 2022 is EUR 678 million, of which EUR 699 million will have to be paid by the UK within the 12 months following the year-end and EUR 1 377 million will have to be paid by the EU to the UK afterwards:






(EUR million)





Amount due from the UK at 31.12.2021




557






Amount invoiced to the UK in September 2022




20






UK Share for undervaluation case




(370)






Payments made to the UK in 2022




536






UK correction including the rectified amount of 2018–2019 UK corrections update done in 2022 (EUR 3,7  million)




11






Update of VAT and GNI adjustments (balances exercise 2021)




(64)






VAT and GNI adjustments (balances exercise 2022)




(1 377 )






UK net traditional own resources after 28 February 2021




8






Amount due to the UK at 31.12.2022




(678)






Non-current




(1 377 )






Current




699





It is noted that the amount of EUR 699 million to be paid by the UK within the next 12 months following the year-end includes the deduction of the EUR 370 million relating to the customs case mentioned above. As this amount was settled separately from the invoice mechnanism, it was not included in the April 2023 invoice.


Article 141 — Fines


The UK is entitled to its share of fines decided before 31 December 2020 and also those decided upon by the Union after 31 December 2020 in a procedure referred to in Article 92 (1) when these become definitive. The amount of UK relevant fines which were outstanding at 31 December 2022 is EUR 12,4 billion (2020: EUR 13,8 billion). The decrease of EUR 1,4 billion is mainly due to the net decrease in fines of EUR 1,3 billion (EUR 0,2 billion of fines issued in 2022 less EUR 1,5 billion of fines confirmed and paid, reduced or cancelled by court decisions during 2022) and the increase in the impairment of fines of EUR 0,1 billion. The UK share of the UK relevant fines outstanding at 31 December 2022 is EUR 1,5 billion (2021: EUR 1,7 billion), out of which an amount of EUR 5,4 million will be included in the September 2023 invoice and paid to the UK in the period October 2023 to May 2024. In addition, the UK is entitled to its share of definitive fines which were no longer outstanding at 31 December 2022 (EUR 7,5 million, also to be included in the September 2023 invoice and paid to the UK in the period October 2023 to May 2024) and its share of definitive fines that were invoiced in September 2022 but not yet paid at year-end (EUR 93,7 million, paid to the UK in the period January to May 2023). The total UK share of fines thus amounts to EUR 1,6 billion (2021: 1,8 billion), of which EUR 98,6 million is to be paid within the 12 months following the reporting date (2021: EUR 90,2 million).


Articles 143 — Contingent financial liabilities: loans for financial assistance, EFSI, EFSD & ELM


Under this article the UK shall be liable to fund its share of the contingent liabilities of the EU in relation to its borrowing, lending and guarantee activities should these crystallise and should they not be covered by existing guarantee funds — see note 4.1 for the related contingent liabilities. The EU will refund to the UK amounts which the UK has already contributed to guarantee funds and which are no longer needed. The UK also has a right to the reflows from operations for which it shares the liability. At 31 December 2022 the amount to be paid to the UK, all within the next 12 months, is EUR 313 million (2021: EUR 163 million). This amount comprises the UK share of the recoveries and net revenues collected in 2022 (EUR 79,5 million), the excess in provisioning (EUR 216,2 million), the impact of the adjustment due to the changed treatment of losses from asset management (EUR 16,9 million), as well as another adjustment for amounts recovered in 2021 for ELM, which were identified during the agreed-upon review procedures (EUR 7 011).


Articles 144 — Financial instruments


Under this article, the EU has committed to refund to the UK its share of the reflows stemming from financial operations approved by the withdrawal date, as well as its share of the disbursements made to financial operations approved after the withdrawal date. At 31 December 2022 the amount to be paid to the UK, all within the next 12 months, is EUR 54 million (2021: EUR 73 million). This amount includes a deduction of EUR 215 resulting from a foreign exchange rate correction related to 2021.


Article 145 — European Coal and Steel Community in Liquidation (ECSC i.L.)


The UK is entitled to its share of the net assets of ECSC in Liquidation at 31 December 2020, to be paid back in five instalments on 30 June each year, starting in 2021. The net assets of the ECSC in Liquidation at 31 December 2020 amounted to EUR 1,5 billion of which the UK share is EUR 184 million. Following the payment of the second instalment of EUR 37 million in 2022, the outstanding amount at 31 December 2022 is EUR 111 million (2021: EUR 148 million), of which EUR 37 million is to be paid within 12 months following the reporting date.


Article 146 — Investment in the European Investment Fund (EIF)


The UK is entitled to its share of the EU’s investment in the paid-in share capital of the EIF at 31 December 2020, to be paid back in five instalments on 30 June each year, starting in 2021. The EU’s investment in the EIF paid-in share capital at 31 December 2020 was EUR 267 million of which the UK share is EUR 33 million. Following the payment of the second instalment of EUR 7 million, the outstanding amount at 31 December 2022 is EUR 20 million (2021: EUR 27 million), of which EUR 7 million is to be paid within 12 months following the reporting date.


Article 147 — Legal cases


The UK has committed to contribute its share of EU payments arising from legal cases concerning the financial interests of the Union that become due, provided that the facts forming the subject matter of those cases occurred no later than 31 December 2020. Taking into account the provisions and accruals at year-end, as well as actual payments made by the EU for legal cases in 2022 the estimated amount that the UK will have to pay is EUR 68 million (2021: EUR 53 million), of which EUR 18 million is to be paid within 12 months following the reporting date.
2.6.1.3.   Recoverables from competition fines








(EUR million)




 


31.12.2022


31.12.2021





Recoverable from fines gross amount




13 635 




14 922 






Provisional payments




(2 980 )




(2 100 )






Impairment




(1 235 )




(1 125 )






Total




9 420 




11 698 






Non-current



—


—





Current




9 420 




11 698 





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 the total outstanding fines at year-end, EUR 2 980 million (2021: EUR 2 100 million) has been received as provisional payments while EUR 9 066 million (2021: EUR 11 067 million) of guarantees have been received.
The amounts written down due to impairment reflect the Commission’s case-by-case assessment of fines amounts not cashed or not covered by a guarantee, which the Commission expects not to recover.
A contingent liability is disclosed for the possibility of having to pay back provisionally paid amounts to the fined companies — see note 4.2.1.
2.6.1.4.   Accrued income and deferred charges








(EUR million)




 


31.12.2022


31.12.2021





Accrued income




1 936 




2 313 






Deferred charges relating to non-exchange transactions




315




340






Total




2 250 




2 653 






Non-current




1 011 




1 556 






Current




1 239 




1 097 





Accrued income includes EUR 1,8 billion (2021: EUR 2 billion) that the Commission expects to recover in the area of cohesion as a result of the examination and acceptance of the annual accounts submitted by the Member States. The biggest part of this amount (EUR 1 billion) is expected to be recovered at the closure of the underlying programmes only (as a consequence of the Coronavirus Response Investment Initiative measures) and therefore is classified as non-current.
2.6.2.   Receivables from exchange transactions








(EUR million)




 


31.12.2022


31.12.2021





Non-current



 


 





Financial guarantee receivable




1 832 




2 630 






Late payment interest




597




3 052 






Other receivables




103




68





 



2 532 




5 750 






Current



 


 





Financial guarantee receivable




369




485






Customers




288




302






Impairment on receivables from customers




(171)




(172)






Deferred charges relating to exchange transactions




291




236






Late payment interest




2 554 




1 127 






Other




167




345





 



3 497 




2 323 






Total




6 029 




8 073 





The late payment interest concerns mainly own resources cases and accrued interest on guarantees provided by fined companies. The decrease in the late payment interest is linked mainly to the recalculations that took place following the Court judgement on the undervaluation case mentioned under note 2.6.1.1. The amount related to the UK on this undervaluation case is shown as a current receivable (EUR 1,4 billion), while the non-current amount of the late payment interest (EUR 0,6 billion) relates exclusively to Member States.
The financial guarantee contract (FGC) receivable represents the future remuneration the EU expects to receive for guarantees given. The majority of the EU guarantees are non-remunerated or priced below the market rate. Therefore the FGC receivable is significantly smaller than the FGC liability (see note 2.11.2). Out of the total amount of EUR 2 201 million of the FGC receivable as at 31 December 2022, EUR 2 198 million is classified as financial assets at FVSD (Fair value level 3). Compared to the opening balance as at 1 January 2022 of EUR 3 115 million, in total the FGC receivable has decreased by EUR 914 million, of which EUR 344 million was due to guarantee premiums received in 2022 and EUR 571 million to lower guarantee premiums expected to be received in the future.
2.7.   INVENTORIES








(EUR million)




 


31.12.2022


31.12.2021





Scientific materials




54




58






Other




28




26






Total




82




84





2.8.   CASH AND CASH EQUIVALENTS









(EUR million)




 


Note


31.12.2022


31.12.2021





Accounts with Treasuries and Central Banks



 



21 413 




20 121 






Current accounts



 



178




453






Imprest accounts



 



8




8






Transfers (cash in transit)



 



—




—






Bank accounts for budget implementation




2.8.1




21 598 




20 582 






NGEU




2.8.2




19 929 




18 027 






Financial instruments




2.8.3




2 713 




2 838 






Fines




2.8.4




914




1 953 






Other institutions, agencies and bodies



 



1 344 




1 396 






Trust funds



 



47




65






Total



 



46 544 




44 860 





2.8.1.   Bank accounts for budget implementation

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 2022 is driven by the following main elements:






—


An amount of EUR 10,9 billion non-implemented budget appropriations at year-end, of which EUR 8 billion relates to assigned revenues, EUR 0,6 billion relates to NGEU credits and EUR 2,3 billion relates to payment appropriations (including EUR 0,6 billion of EAGF);










—


An amount of EUR 3,2 billion belonging to agencies’ treasuries managed by the Commission that has not been spent at year end;










—


An amount of EUR 5,2 billion additional traditional own resources cashed not budgeted; and










—


An amount of EUR 0,5 billion of definitive fines not yet budgeted.




2.8.2.   NGEU

NGEU holds cash on a bank account at the European Central Bank (ECB). With the implementation of the diversified funding strategy in the NGEU instrument — see note 2.11 — the cash balance in the NGEU instrument is substantial and reached EUR 19,9 billion as at 31 December 2022 (EUR 18 billion in 2021). The high cash balance is kept with the objective of ensuring that amounts held on the NGEU bank account are sufficient to meet all upcoming disbursement needs and to maintain a defined safety buffer, while avoiding any excess balances.
2.8.3.   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: EUR 1,9 billion as at 31 December 2022, of which EUR 0,6 billion relates to COSME Loan Guarantee Facility (COSME LGF) — see note 4.1.2. It also includes EUR 0,3 billion cash and cash equivalents held in the CPF and not yet invested in securities at year-end and EUR 0,4 billion cash equivalents (short term commercial papers) belonging to the Innovation Fund managed by the EIB — see note 2.4.2.1. This heading does not cover the CPF related liquidity buffer (EUR 0,3 billion as at 31 December 2022), which is held in the Commission’s central treasury. Cash belonging to financial instruments can only be used by the programmes concerned.
2.8.4.   Fines

This is mainly 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 fined company, the underlying amount is shown as contingent liability in note 4.2.1. Since 2010, all subsequent provisionally cashed fines are managed by the Commission in the BUFI fund and invested in financial instruments categorised as financial assets at FVSD non-derivatives (see note 2.4.2). The decrease of cash relating to fines at 2022 year-end is due to the reimbursement to Intel of its provisionally paid fine of EUR 1 060 million in February 2022 following the judgement of the General Court of the EU in the Intel Corporation vs Commission case.

LIABILITIES

2.9.   PENSION AND OTHER EMPLOYEE BENEFITS

2.9.1.   Net employee benefit scheme liability











(EUR million)




 


Pension Scheme of European Officials


Other retirement benefit schemes


Joint Sickness Insurance Scheme


31.12.2022 Total


31.12.2021 Total





Defined Benefit Obligation




73 126 




1 880 




6 064 




81 070 




122 926 






Plan assets




N/A




(63)




(390)




(453)




(460)






Net liability




73 126 




1 817 




5 674 




80 617 




122 466 





The large decrease in the total employee benefits liability is primarily driven by the decrease in the net liability of the Pension Scheme of European Officials (PSEO), the largest scheme in place. This PSEO liability has decreased mainly because of the actuarial gains from changes in the underlying financial assumptions (see note 2.9.4). This has been driven by a sharp increase in the real discount rate in the year, which turned positive again after having been negative for three consecutive years. It must be noted, however, that while an increase or a decrease in the real discount rate impacts the size of the liability at year-end, it does not change the amount of benefits that will have to be actually paid from the EU budget to the beneficiaries in future years.
The resulting decrease in the liability was partially offset by an increase caused by the fact that 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).

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 budget. The scheme is notionally funded, and the Member States guarantee the payment of these benefits collectively. A compulsory pension contribution is deducted from the basic salaries of active members, currently 10,1 %. These contributions are treated as budget revenue of the year and contribute to the funding of EU expenditure in general, see also note 3.8.
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 2022 and on the rules of the Staff Regulations applicable at this date. This valuation was carried out in accordance with the accounting provisions of IPSAS 39 (and therefore also EU accounting rule 12).

Other retirement benefit schemes

This refers to the liability relating to the pension obligations towards Members and former Members of the Commission, the European Court of Justice and the Court of Auditors, the Council, the European Ombudsman, and the European Data Protection Supervisor. Also included under this heading are liabilities relating to the pensions of Members of the European Parliament.

Joint Sickness Insurance Scheme

In addition to the above retirement benefit schemes, a valuation is made for the estimated liability that the EU has regarding the Joint Sickness Insurance Scheme (JSIS) in relation to healthcare costs, which 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, IPSAS 39 has not been interpreted in a stricter sense when attributing the benefits to the periods of service. If the service cost were to be accrued 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 1,2 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).
2.9.2.   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:









(EUR million)




 


Pension Scheme of European Officials


Other retirement benefit schemes


Joint Sickness Insurance Scheme


Total





Present value as at 31.12.2021




109 679 




2 600 




10 647 




122 926 






Recognised in statement of financial performance



 


 


 


 





Current Service Cost




4 575 




118




310




5 003 






Interest cost




1 096 




18




106




1 220 






Past Service Cost




—




28




—




28






Recognised in net assets



 


 


 


 





Remeasurements in employee benefits liabilities



 


 


 


 





Actuarial (gains)/losses from experience




1 226 




54




(267)




1 014 






Actuarial (gains)/losses from demographic assumptions




78




1




11




91






Actuarial (gains)/losses from financial assumptions




(41 533 )




(862)




(4 642 )




(47 036 )






Other



 


 


 


 





Benefits paid




(1 996 )




(78)




(102)




(2 176 )






Present value as at 31.12.2022




73 126 




1 880 




6 064 




81 070 





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 2022 and what really occurred in 2022.
Actuarial gains and losses from changes in the values of the 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.
2.9.3.   Plan assets









(EUR million)




 


Other retirement benefit schemes


Joint Sickness Insurance Scheme


Total





Present value as at 31.12.2021




74




386




460






Net movement in plan assets




(11)




5




(7)






Present value as at 31.12.2022




63




390




453





2.9.4.   Actuarial assumptions — employee benefits

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







 


2022


2021





Pension Scheme of European Officials



 


 





Nominal discount rate




3,6  %




1,0  %






Expected inflation rate




2,4  %




2,0  %






Real discount rate




1,1  %




(1,0 ) %






Expected rate of future salary increases




1,5  %




1,8  %






Retirement age




63/64/66




63/64/66






Joint Sickness Insurance Scheme



 


 





Nominal discount rate




3,6  %




1,0  %






Expected inflation rate




2,4  %




2,0  %






Real discount rate




1,1  %




(1,0 ) %






Expected rate of future salary increases




1,6  %




1,9  %






Medical cost trend rates




2,3  %




2,5  %






Retirement age




63/64/66




63/64/66





Mortality rates for 2022 are based on the EU Civil Servants Life Table — EULT 2018, incorporating a dynamic trend over a 20 year horizon.
The nominal discount rate is determined as the value of the euro zero-coupon yield (with a maturity of 18 years as of December 2022 for the PSEO, and 20 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.
In 2022 the sharp increase in the nominal rates resulted in an overall increase in the real discount rate, thus changing the previously observed negative trend and contributing to the significant actuarial gains from financial assumptions in the year.
2.9.5.   Sensitivity analysis

The sensitivity analysis is based on simulations, which change, everything else being equal, the value of the concerned assumptions.

Pension Scheme of European Officials sensitivity

A ten basis point (0,1 %) change in the assumed discount rate would have the following effects:









(EUR million)




 


2022


2021




 


Increase 0,1  %


Decrease 0,1  %


Increase 0,1  %


Decrease 0,1  %





Defined benefit obligation




(1 316 )




1 352 




(2 464 )




2 544 





A ten basis point (0,1 %) change in expected salary increases would have the following effects:









(EUR million)




 


2022


2021




 


Increase 0,1  %


Decrease 0,1  %


Increase 0,1  %


Decrease 0,1  %





Defined benefit obligation




1 312 




(1 280 )




2 414 




(2 345 )





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









(EUR million)




 


2022


2021




 


One year increase


One year decrease


One year increase


One year decrease





Defined benefit obligation




(727)




988




(1 155 )




1 527 






Joint Sickness Insurance Scheme sensitivity

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









(EUR million)




 


2022


2021




 


Increase 0,1  %


Decrease 0,1  %


Increase 0,1  %


Decrease 0,1  %





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




10




(10)




13




(12)






Defined benefit obligation




148




(144)




317




(307)





A ten basis point (0,1 %) change in the assumed discount rate would have the following effects:









(EUR million)




 


2022


2021




 


Increase 0,1  %


Decrease 0,1  %


Increase 0,1  %


Decrease 0,1  %





Defined benefit obligation




(118)




121




(265)




274





A ten basis point (0,1 %) change in expected salary increases would have the following effects:









(EUR million)




 


2022


2021




 


Increase 0,1  %


Decrease 0,1  %


Increase 0,1  %


Decrease 0,1  %





Defined benefit obligation




(23)




22




(42)




41





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









(EUR million)




 


2022


2021




 


One year increase


One year decrease


One year increase


One year decrease





Defined benefit obligation




(173)




184




(317)




334





2.10.   PROVISIONS













(EUR million)




 


Amount at 31.12.2021


Additional provisions


Unused amounts reversed


Amounts used


Transfer between categories


Change in estimation


Amount at 31.12.2022





Legal cases:



 


 


 


 


 


 


 










 



Agriculture








354




222




(83)




(216)




—




—




277











 



Other








22




54




(3)




(2)




(0)




0




71






Nuclear site dismantlement




2 440 




—




—




(38)




—




(657)




1 745 






Financial




1




—




—



—



—




0




1






Other




530




494




(249)




(100)




0




2




677






Total




3 348 




770




(336)




(356)




0




(654)




2 771 






Non-current




2 950 




242




(85)




(218)




(36)




(654)




2 199 






Current




398




527




(251)




(138)




36




(0)




571





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 and the EAFRD.

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 2022, this resulted in a provision of EUR 1 745 million, split between amounts expected to be used in 2023 (EUR 35 million) and afterwards (EUR 1 710 million). The decrease compared to 2021 is mainly the result of the sharp increase in the discount rates 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.
2.11.   FINANCIAL LIABILITIES









(EUR million)




 


Note


31.12.2022


31.12.2021





Non-current



 


 


 





Financial liabilities at AC




2.11.1




323 798 




214 824 






Financial liabilities at FVSD




2.4.2.2




9




5






Financial guarantee liabilities




2.11.2




177




146





 


 



323 985 




214 974 






Current



 


 


 





Financial liabilities at AC




2.11.1




22 022 




23 501 






Financial liabilities at FVSD




2.4.2.2




15




—






Financial guarantee liabilities




2.11.2




6 279 




7 648 





 


 



28 316 




31 149 






Total



 



352 301 




246 123 





2.11.1.   
Financial liabilities at amortised cost










(EUR million)




 


Note


31.12.2022


31.12.2021





Borrowings for NGEU and financial assistance




2.11.1.1




344 303 




236 720 






Other financial liabilities




2.11.1.2




1 517 




1 605 






Total



 



345 820 




238 325 






Non-Current



 



323 798 




214 824 






Current



 



22 022 




23 501 





2.11.1.1.   Borrowings for NGEU and financial assistance













(EUR million)




 


NGEU


SURE


EFSM


BOP


MFA


Euratom


Total





Total at 31.12.2021




91 000 




90 567 




47 138 




201




7 464 




351




236 720 






New borrowings — nominal




150 267 




8 718 




2 200 




—




7 535 




—




168 720 






Repayments




(53 381 )



—



(2 700 )



—



(10)




(23)




(56 114 )






Changes in carrying amount




(4 758 )




(155)




(51)




0




(60)




0




(5 023 )






Total at 31.12.2022




183 129 




99 130 




46 587 




201




14 929 




327




344 303 






Non-current




165 546 




99 026 




42 666 




200




14 798 




314




322 549 






Current




17 583 




104




3 921 




1




131




14




21 754 





The borrowings mainly refer to long-term bonds, except for NGEU where there are short term EU-bills of EUR 17 billion (2021: EUR 20 billion). Aside from NGEU borrowings, see below, all borrowings are back-to-back, meaning that there are corresponding equivalent loans (same terms, interest rates, maturities, etc.) — see note 2.4.1.1.
NGEU borrowings finance RRF loans, RRF non-repayable support and other MFF programmes. There is a bi-annual borrowing plan based on the forecasted outflows for loans and non-repayable support. The Commission follows a diversified funding strategy and uses different long term and short term funding instruments, which allows it to offer long-term loans on attractive terms to beneficiary Member States. The borrowing costs are then allocated — following a single unified approach — to beneficiaries of the loans and to the EU budget (for the non-repayable support).
In the context of the NGEU diversified funding strategy, the Commission issues short-term notes (3 or 6 months), which may be repaid during the same or next year. The EUR 53,4 billion in the line ‘repayments’ under RRF refers to such short term borrowings. The net additional borrowing for NGEU in 2022 was EUR 96,9 billion.
The line ‘changes in carrying amount’ corresponds to the change in accrued interests and to the changes in premiums/discounts (new premiums/discounts and amortisation).
For NGEU the line ‘change in carrying amount’ mainly refers to discounts on the 2022 bond issuances. When the coupon rates are lower than the market rates, the borrower receives less than the nominal value of the borrowings. The difference is the discount amount. This is gradually amortised, as a finance cost and is part of the calculation for the effective interest rate of the borrowing.
The repayment of the above borrowings are ultimately guaranteed by the EU budget — see note 2.4.1.1, and by extension by each Member State.

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








 


31.12.2022


31.12.2021





NGEU




(0,49 ) % — 3,41  %




(0,95 ) % — 0,74  %






SURE




(0,48 ) % — 2,78  %




(0,48 ) % — 0,77  %






EFSM




(0,03 ) % — 3,79  %




(0,03 ) % — 3,79  %






BOP




2,95  %




2,95  %






MFA




(0,14 ) % — 3,70  %




(0,14 ) % — 3,70  %






Euratom




(0,08 ) % — 1,53  %




(0,08 ) % — 1,58  %





2.11.1.2.   Other financial liabilities








(EUR million)




 


31.12.2022


31.12.2021





Non-current



 


 





Finance lease liabilities




847




1 017 






Buildings paid for in instalments




296




291






Other




106




133





 



1 249 




1 441 






Current



 


 





Finance lease liabilities




103




103






Buildings paid for in instalments




48




54






Fines to be reimbursed




—




—






Other




117




6





 



268




164






Total




1 517 




1 605 






Finance lease liabilities










(EUR million)




 


Future amounts to be paid




< 1 year


1–5 years


> 5 years


Total Liability





Land and buildings




97




393




447




938






Other fixed assets




6




7



—



13






Total at 31.12.2022




103




400




447




951






Interest element




39




124




74




237






Total future minimum lease payments at 31.12.2022




143




524




521




1 188 






Total future minimum lease payments at 31.12.2021




145




619




631




1 395 





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










(EUR million)




 


31.12.2022


31.12.2021




Financial guarantee receivable
(Note 2.6.2)


Financial guarantee liability


Financial guarantee receivable
(Note 2.6.2)


Financial guarantee liability





EU budgetary guarantee programmes



 


 


 


 





EFSI guarantee




2 039 




2 178 




2 917 




3 618 






EIB ELM guarantees




47




2 358 




106




2 569 






EFSD guarantee




3




180




2




139






InvestEU guarantee




46




332




—




—






NDICI EU guarantee




0




203




—




4





 



2 134 




5 252 




3 024 




6 330 






EU financial instrument programmes



 


 


 


 





COSME




0




617




0




780






Horizon 2020




37




422




59




410






CCS



—



60




—




110






Other




29




106




32




165





 



66




1 204 




90




1 464 






Total




2 201 




6 456 




3 115 




7 794 






Non-current




1 832 




177




2 630 




146






Current




369




6 279 




485




7 648 





The EU applies the gross presentation of the financial guarantee contracts, where the revenues still to be received under the guarantee are recognised as a finacial guarantee receivable leg (presented under the exchange receivables heading — see note 2.6.2) and a finacial guarantee liability is recognised representing the EU liabililty for coverage of the future guarantee claims.
The EFSI guarantee and ELM guarantee remain the financially most significant of the financial guarantee programmes, with a financial guarantee liability of EUR 2 178 million and EUR 2 358 million respectively. While in return for the EFSI guarantee, the EU is entitled to an expected remuneration of EUR 2 039 million — recognised as a finacial guarantee receivable — covering to a large extent the liability, for the ELM guarantee the expected revenues are EUR 47 million, thus covering only a small fraction of the guarantee. This is due to a high share of EU subsidisation of the ELM. In 2022, new guarantee agreements were signed under InvestEU and NDICI programmes, leading to recognition of new financial guarantee liabilities (see also note 4.1.1).
Most of the remaining EU guarantee programmes, in particular those provided for higher-risk financing to SMEs or to the innovation sector, are non-remunerated. Please see note 2.4.2.1 for further information on guarantees under the H2020 programme and note 4.1.2 in relation to COSME.
2.12.   PAYABLES












(EUR million)




 


Gross Amount


Adjustments


Net Amount at 31.12.2022


Gross Amount


Adjustments


Net Amount at 31.12.2021





Cost claims and invoices received from:



 


 


 


 


 


 





Member States



 


 


 


 


 


 





EAFRD & other rural development instruments




80




(0)




80




30




(0)




30






ERDF & CF




6 258 




(1 614 )




4 644 




6 484 




(1 878 )




4 606 






ESF




2 796 




(368)




2 428 




3 311 




(596)




2 715 






RRF (NGEU)




24 629 



 



24 629 




19 118 



 



19 118 






Other




1 075 




(170)




904




663




(58)




605






Private and public entities




1 527 




(467)




1 060 




1 563 




(320)




1 244 






Total cost claims and invoices received




36 366 




(2 620 )




33 745 




31 169 




(2 851 )




28 318 






EAGF




15 795 




N/A




15 795 




15 650 




N/A




15 650 






Own resources payables




3 764 




N/A




3 764 




38




N/A




38






Sundry payables




1 679 




N/A




1 679 




2 030 




N/A




2 030 






Other




357




N/A




357




335




N/A




335






Total




57 961 




(2 620 )




55 341 




49 223 




(2 851 )




46 372 





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.
The significant increase compared to the previous year-end is caused primarily by the RRF (NGEU) instrument which began in 2021 and where payables outstanding at 31 December 2022 totalled EUR 24,6 billion. These amounts represent the payment requests received towards the end of the year for which the assessment of milestones and targets was still pending.
In the 2014–2020 programming period, the Common Provisions Regulation (EU) No 1303/2013 of the European Parliament and of the Council (21) (CPR) applicable to the Structural Funds (ERDF and ESF), the 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 2022 totalled EUR 8,8 billion. A part of this amount (EUR 1,3 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’.

Requests for pre-financing

In addition to the above amounts, at the end of 2022, EUR 3 billion of requests for pre-financing have been received and were not yet paid at year-end. According to the EU accounting rules, these amounts are not booked as payables.

Own Resources Payables

Own resources payables refer to Member States’ EU budget contributions to be reimbursed at year-end. Amending budgets are implemented according to Article 10a(3) of Regulation (EU, Euratom) No 609/2014. The large balance at 31 December 2022 was due to the adoption of the amending budget No 5/2022 on 23 November 2022. According to this legal provision, the resulting amounts were returned to the Member States on the first working day of January 2023.
2.13.   ACCRUED CHARGES AND DEFERRED INCOME








(EUR million)




 


31.12.2022


31.12.2021





Accrued charges




85 870 




77 819 






Deferred income




127




126






Other




167




123






Total




86 164 




78 068 





The split of accrued charges is as follows:







(EUR million)




 


31.12.2022


31.12.2021





RRF (NGEU)




17 188 




8 263 






EAGF




25 316 




25 241 






EAFRD and other rural development instruments




19 625 




19 245 






ERDF and CF




8 741 




10 710 






ESF




3 366 




3 499 






Other




11 633 




10 859 






Total




85 870 




77 819 





Accrued charges refer to recognised expenses for which the Union has still to receive cost claims. For cohesion policy, the decrease relates mainly to the fact that the 2014–2020 period is in its closing phase. Additionally the implementation for the current programming period is rather slow and as a result there was no recognition of accrued charges for the 2021–2027 period. On the other hand, there is an increase of accrued charges for the RRF instrument as the Member States advance with the implementation of reforms and investments and milestones are fulfiled.

NET ASSETS

2.14.   RESERVES









(EUR million)




 


Note


31.12.2022


31.12.2021





Other reserves



 



1 312 




1 325 






Total



 



1 312 




1 325 





The amount relates primarily to the reserves of the ECSC in Liquidation (EUR 865 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 in Liquidation, as well as to the reserve fund of the European Union Intellectual Property Office (EUR 293 million).
2.15.   AMOUNTS TO BE CALLED FROM MEMBER STATES







(EUR million)





Amounts to be called from Member States at 31.12.2021




83 624 






2021 budget result credited to Member States




3 227 






Remeasurements in employee benefits liabilities




(46 048 )






Other




(115)






Economic result of the year




91 949 






Total amounts to be called from Member States at 31.12.2022




132 637 





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 borrowings in relation to non-repayable support taken out under NGEU, 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.
The considerable increase of the amounts to be called from Member States in the past two years is primarily due to the borrowings in relation to non-repayable support taken out under NGEU in this period.
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 103 880 million for 2022 (2021: EUR 115 955 million) and is the most significant of the four 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. it funds the part of the budget that is not covered by other sources of income. The decrease of GNI revenue in 2022 comapred to 2021 is explained by multiple factors: the budgeting of a higher surplus by EUR 1,5 billion, the increase of the customs duties forecast by EUR 6,4 billion, a higher VAT contribution by EUR 1,8 billion and a bigger contribution by the United Kingdom linked to the Withdrawal Agreement (EUR 3,9 billion).
3.2.   TRADITIONAL OWN RESOURCES

Traditional own resources relate mainly to customs duties where Member States retain, by way of collection costs, 25 % of the amounts, so the above figures are net of this deduction. The collection of customs duties has increased significantly due to the economic recovery.
3.3.   VAT RESOURCES

The VAT own resource is calculated based on Member States’ VAT bases, which are harmonised for this purpose in accordance with EU rules. A uniform call rate of 0,30 % applies to each Member State’s total amount of VAT receipts collected for all taxable supplies divided by the weighted average VAT rate. The VAT base is capped at 50 % of each Member State’s GNI.
3.4.   PLASTICS OWN RESOURCES

A uniform call rate of EUR 0,80 per kilogram applies to the weight of plastic packaging waste generated in each Member State that is not recycled. The plastic packaging waste that is not recycled in a given year is calculated as the difference between the plastic packaging waste generated and the plastic packaging waste recycled in that year in a Member State. Bulgaria, Czechia, Estonia, Greece, Spain, Croatia, Italy, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Portugal, Romania, Slovenia and Slovakia are entitled to specific annual lump sum reductions in their respective plastics own resource contributions. This relatively new own resource was introduced in 2021 with the entry into force of the new Own Resources Decision (Council Decision (EU, Euratom) 2020/2053 (4)).

REVENUE FROM NON-EXCHANGE TRANSACTIONS: TRANSFERS

3.5.   FINES

Revenue of EUR 915 million (2021: EUR 1 990 million) relates mainly to fines the Commission has imposed on Member States for infringements of EU law (EUR 640 million) and fines imposed on companies for breaches of EU competition rules (EUR 272 million).
3.6.   RECOVERY OF EXPENSES








(EUR million)




 


2022


2021





Shared management




1 110 




1 682 






Direct management




90




61






Indirect management




19




51






Total




1 219 




1 794 





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. The recovery orders are 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. The EU budget is also protected by withdrawals of expenditure and recoveries of pre-financing.
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 are amounts that the Commission expects to recover from the Member States. The recovery will be made following the examination and acceptance of the annual accounts submitted by the Member States in early 2023. The amounts to be recovered represent essentially the difference between amounts initially declared as eligible during the accounting year and the amounts confirmed as eligible in the annual accounts of the Member States. A low amount means that the controls in place at Member State level enabled the detection of ineligible amounts early in the process.
3.7.   UK WITHDRAWAL AGREEMENT

This relates to the net amounts owed by the UK under the WA signed following its departure from the Union in 2020 (see note 2.6.1.2), adjusted each year in accordance with the requirements of the WA. The revenue is zero for 2022 and instead an expense is recognised — this arises primarily due to the large decrease in the outstanding receivable from the UK relating to pensions and other employee benefits (Article 142) as well as additional amounts payable to the UK relating to own resources (Article 136).
3.8.   OTHER REVENUE FROM NON-EXCHANGE TRANSACTIONS








(EUR million)




 


2022


2021





Contributions from Member States for the Innovation Fund




3 192 




2 187 






Staff taxes and contributions




1 439 




1 367 






Contributions from third countries




1 307 




1 056 






Contributions from Member States for ESI and external aid




204




199






Transfer of assets




321




356






Budgetary adjustments




3 246 




1 245 






Adjustment of provisions




991




65






Other




695




261






Total




11 395 




6 737 





Contributions from Member States to the Innovation Fund are revenues relating mainly to the sale of emission allowances that are to be used to support innovation in low-carbon technologies.
Staff taxes and contributions revenue relate primarily to the deductions from staff salaries. Retirement contributions and income tax represent the substantial amounts within the category.
Contributions from third countries are mainly contributions from EFTA countries (EUR 646 million) as well as financial contributions of third states to Horizon Europe (EUR 427 million) and to ERASMUS+ (EUR 145 million).
Contributions from Member States concern mainly EUR 165 million to finance the Facility for Refugees in Turkey.
The budgetary adjustments mainly represent the budget surplus from the previous year, which amounted to EUR 3 227 million (2021: EUR 1 769 million).
The increase in revenue related to provisions is mainly due to the decrease of the nuclear site dismantlement provision (see note 2.10).
Other revenue from non-exchange transactions includes the ITER Host State and Membership contributions to Fusion for Energy, the European Joint Undertaking for ITER and the Development of Fusion Energy (EUR 155,5 million) and an adjustment on TOR recoverables’ write down (EUR 189 million).

REVENUE FROM EXCHANGE TRANSACTIONS

3.9.   FINANCIAL REVENUE








(EUR million)




 


2022


2021





Interest on:



 


 





Late payments




(927)




1 529 






Loans




1 238 




1 160 






Borrowings




325




220






Other




127




10






Revenue from FGCs




1 282 




987






Gains on financial assets or liabilities at FVSD:



 


 





Non-derivatives




128




324






Derivatives




294




815






Dividends




114




30






Other




20




16






Total




2 602 




5 092 





Interest revenue on late payments stems mainly from fines and own resources contributions due and not paid on time. The negative amount is explained by the significant reduction of the accrued late payment interest revenue for the undervaluation case referred to in note 2.6.1.1, from EUR 1,4 billion recognised in 2021 to EUR 0,4 billion in 2022. This reduction of EUR 1 billion is a consequence of the Court judgement issued in March 2022 and so is recognised in the 2022 financial year.
The interest on loans relates mainly to EFSM (EUR 0,8 billion) where the outstanding amounts mainly bear high effective interest rate. Another EUR 0,2 billion relates to the RRF loans where the new disbursements in 2022 had higher effective interest rates than last year. The interest on SURE loans is low (EUR 0,2 billion) compared to the outstanding loans amount. This is because a significant part of past transactions had lower or negative interest rates. See also note 2.4.1.

Interest revenue from borrowings mainly refers to NGEU and SURE and is due to the negative effective interest rates for certain past transactions.
Revenue from financial guarantee contracts relates primarily to the amortization of the financial guarantee liabilities. It can be interpreted as a release of the EU from guarantee liabilities for the period the EU was standing ready to compensate the holders of the guarantees for their credit losses. Thus, the revenue recognition for financial guarantees reflects the passage of time and the guaranteed volume. The amortizations apply to both types of guarantees, those which are remunerated and those for which the EU charges no or nominal remuneration (see note 2.11.2). Out of the remunerated guarantees, the most significant is the EFSI guarantee provided to the EIB for the Infrastructure and Innovation Window (‘IIW’) debt portfolio, as combined with InvestEU debt portfolios as of 2022 (see note 4.1.1). In 2022, the revenue earned by the EFSI guarantee in relation to those combined debt portfolios amounted to EUR 313 million.
The revenue related to financial guarantee contracts of EUR 1 282 million is off-set by impairment losses for financial guarantee liabilities amounting to EUR 362 million relating to guarantee calls net of recoveries of EUR 360 million and unrealized impairment losses EUR 1 million (see notes 3.15 and 6.5). In addition, the EC has subsidised financial guarantee programmes (EUR 514 million) by charging no or below market rate guarantee premiums (note 3.15). In total, the net result from financial guarantee programmes is a surplus of EUR 406 million.
3.10.   OTHER REVENUE FROM EXCHANGE TRANSACTIONS








(EUR million)




 


2022


2021





Fee revenue for rendering of services (agencies)




694




689






Foreign exchange gains




330




299






Sales of goods




121




53






Share of net result of EIF




24




169






Fixed assets related revenue




26




2






Other




475




285






Total




1 669 




1 497 





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


3.11.   SHARED MANAGEMENT








(EUR million)




Implemented by Member States


2022


2021





European Agricultural Guarantee Fund




41 031 




40 829 






European Agricultural Fund for Rural Development and other rural development instruments




16 073 




15 451 






European Regional Development Fund and Cohesion Fund




43 083 




46 932 






European Social Fund




14 649 




16 727 






Other




3 482 




4 835 






Total




118 318 




124 774 





The transition from the former MFF period 2014–2020 to the current MFF 2021–2027 explains the decrease in expenses in the cohesion area (ERDF, CF, ESF): the costs declared for the previous period are decreasing while the costs related to the current period are low, mainly due to the slow start of its implementation.
Other expenses mainly include European Maritime and Fisheries Fund (EUR 0,8 billion), European Union Solidarity Fund (EUR 0,9 billion), Brexit Adjustment Reserve (EUR 0,4 billion), Asylum and Migration (EUR 0,6 billion), Internal Security (EUR 0,4 billion) and the Fund for European Aid to the Most Deprived (EUR 0,4 billion).
3.12.   DIRECT MANAGEMENT








(EUR million)




 


2022


2021





Implemented by the Commission




78 497 




48 265 






of which RRF (NGEU)




69 461 




42 940 






Implemented by EU Executive Agencies




14 962 




14 232 






Implemented by Trust funds




568




503






Total




94 027 




63 000 





The increase in direct management expenses implemented by the Commission relates mainly to the implementation of RRF, Research Policy and External Action. The main expenditure concerns RRF (EUR 69,5 billion), which has greatly increased from the previous year as Member States use the funds provided and milestones are achieved. The rest of the amounts under direct management primarily concern the implementation of Research Policy (EUR 7,4 billion) and External Actions, which include the Neighbourhood Development and International Cooperation Instrument and its precursors (EUR 3,7 billion), as well as the Humanitarian aid operations (EUR 1 billion).
A further EUR 3,1 billion relates to the Connecting Europe Facility, the common infrastructure fund to deploy smart networks in the area of transport, energy and telecommunications.
3.13.   INDIRECT MANAGEMENT








(EUR million)




 


2022


2021





Implemented by other EU agencies & bodies




3 615 




3 154 






Implemented by third countries




630




890






Implemented by international organisations




4 650 




3 622 






Implemented by other entities




4 738 




3 225 






Total




13 634 




10 891 





Under indirect management expenses, EUR 6 billion relates to external actions (mainly in the areas of pre-accession, humanitarian aid, international co-operation and neighbourhood). A further EUR 3,5 billion is related to increasing Europe’s competitiveness (in areas such as research, space programmes and education).
3.14.   STAFF AND PENSION COSTS








(EUR million)




 


2022


2021





Staff costs




7 957 




7 377 






Pension costs




6 251 




5 040 






Total




14 209 




12 417 





Pension costs represent elements of the movements that have arisen following the actuarial valuation of the employee benefits liabilities other than those recognised in Net Assets. They do not therefore represent actual pension payments of the year, which are significantly lower at EUR 2,2 billion.
3.15.   FINANCE COSTS








(EUR million)




 


2022


2021





Interest expenses:



 


 





Borrowings




1 912 




1 209 






Loans




161




146






Finance leases




50




56






Other




31




103






FGCs — subsidised remuneration




514




233






Net impairment losses on:



 


 





FGCs




362




947






Loans and receivables




2 108 




1 244 






Loss on financial assets or liabilities at FVSD:



 


 





Non-derivatives




2 344 




210






Derivatives




126




40






Other




29




13






Total




7 637 




4 201 





The interest expenses from borrowings are mainly from EFSM (EUR 0,8 billion), NGEU (EUR 0,9 billion) and SURE (EUR 0,2 billion). The interest on SURE borrowings are significantly lower than for the other programmes because a significant part of them have lower or negative interest rates. The negative effective interest rates for certain past SURE transactions also explains the interest expense on loans (‘back-to-back’ lending with negative interest rates).
For more details on expenses related to financial guarantees, see note 3.9.
Net impairment losses on loans and receivables mostly relate to the additional impairment of EUR 2,1 billion recognised in 2022 on MFA and Euratom loans to Ukraine (see notes 2.4.1.1 and 6.5).
The main loss on finacial assets or liabilities at FVSD non-derivatives is from the debt securities of the CPF (EUR 1,1 billion) and the Innovation Fund (0,5 billion). In 2022 the bond market prices fell because of the increase in the interest rates. This has negatively impacted the fair value of the bonds held in the EU portfolios leading to the recognition of a mostly unrealised fair value loss.
3.16.   OTHER EXPENSES








(EUR million)




 


2022


2021





Administrative and IT expenses




2 321 




2 105 






Adjustment of provisions




769




583






Fixed assets related expenses




1 518 




1 205 






Land and buildings management expenses




686




591






Foreign exchange losses




427




171






Operating lease expenses




411




447






Reduction of fines by Court decision




1 378 




15






Other




832




645






Total




8 342 




5 762 





The amount disclosed in line ‘Reduction of fines by Court decision’ above includes EUR 997 million related to the annulment of a fine imposed in January 2018 on Qualcomm for abusing its market dominance. In June 2022, the EU General Court annulled the fine and the Commission did not appeal the Court’s judgement, resulting in a write-off of the fine receivable in the 2022 annual accounts.
The aggregate amount of research and development expenditure recognised as an expense during 2022 is as follows:







(EUR million)




 


2022


2021





Research costs




430




401






Non-capitalised development costs




133




122






Total




563




523





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















(EUR million)




 


Single Market, Innovation and Digital


Cohesion and Values


Natural Resources and Environment


Migration and Border Management


Resilience, Security and Defence


Neighbourhood and the World


European Public Administration


Not assigned to MFF heading (5)



Total





GNI resources



—


—


—


—


—



—




—




103 880 




103 880 






Traditional own resources



—


—


—


—


—



—




—




23 495 




23 495 






VAT



—


—


—


—


—



—




—




19 666 




19 666 






New Own Resources



—


—


—


—


—



—




—




6 337 




6 337 






Fines




—




—




—




—




—




—




—




915




915






Recovery of expenses




62




620




468




4




0




63




0




2




1 219 






UK Withdrawal Agreement




—




—




—




—




—




—




—




—




—






Other




1 173 




140




345




0




657




206




1 896 




6 977 




11 395 






Revenue from non-exchange transactions




1 236 




761




813




4




657




269




1 896 




161 271 




166 908 






Financial revenue




1 471 




18




1




—




0




362




6




743




2 602 






Other




111




(25)




(12)




(0)




(3)




67




480




1 052 




1 669 






Revenue from exchange transactions




1 582 




(7)




(11)




(0)




(3)




429




486




1 795 




4 271 






Total revenue




2 817 




754




802




4




654




699




2 382 




163 067 




171 179 






Expenses implemented by Member States:



 


 


 


 


 


 


 


 


 





EAGF



—



—




(41 031 )



—


—


—



—




—




(41 031 )






EAFRD & other rural development instruments



—



—




(16 073 )



—


—


—



—




—




(16 073 )






ERDF & CF




—




(43 083 )



—


—


—


—



—




—




(43 083 )






ESF




—




(14 649 )



—


—


—


—



—




—




(14 649 )






Other




—




(764)




(755)




(862)




(72)




(132)




—




(898)




(3 482 )






Implemented by the EC, executive agencies and trust funds




(12 765 )




(73 573 )




(906)




(459)




(303)




(5 802 )




(12)




(208)




(94 027 )






Implemented by other EU agencies and bodies




(2 848 )




(494)




(90)




(1 018 )




(210)




(25)




(111)




1 180 




(3 615 )






Implemented by third countries and int. org.




(418)




(114)




(5)




(241)




(163)




(4 334 )




(1)




(5)




(5 281 )






Implemented by other entities




(225)




(2 799 )




(1)




(6)




(57)




(1 653 )




(0)




2




(4 738 )






Staff and Pension costs




(493)




(15)




(2)




(0)




(3)




(157)




(12 006 )




(1 531 )




(14 209 )






Finance costs




(882)




(11)




(6)




(0)




(0)




(574)




(210)




(5 953 )




(7 637 )






UK Withdrawal Agreement



 


 


 


 


 


 


 



(6 961 )




(6 961 )






Other expenses




(2 195 )




(168)




(305)




(19)




(8)




(281)




(3 421 )




(1 946 )




(8 342 )






Total expenses




(19 825 )




(135 670 )




(59 174 )




(2 604 )




(816)




(12 957 )




(15 761 )




(16 321 )




(263 128 )






Economic result of the year




(17 008 )




(134 916 )




(58 372 )




(2 600 )




(163)




(12 258 )




(13 379 )




146 746 




(91 949 )





The display of revenue and expenses by MFF heading is based on estimation as not all commitments are linked to an MFF heading.
4.   CONTINGENT LIABILITIES AND ASSETS
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 guarantees given and to legal risks. All contingent liabilities, except those relating to fines, guarantees and financial instruments up to the level they are covered by funds (see note 2.4.2.1), would be financed, should they fall due, by the EU budget (and thus the EU Member States) in the years to come.

For information on the EU budget guarantees given to cover NGEU and financial assistance borrowings, please see note 2.4.1.1, as well as note 2.11.1.1. This information had been previously disclosed under this section but since any call on these guarantees would depend on a default of loans granted, which are presented in more detail in note 2.4.1.1, it is considered more relevant to present this information there.
4.1.   GUARANTEES GIVEN BY THE EU BUDGET

4.1.1.   Guarantees given under the EU budgetary guarantee programmes (nominal)










(EUR million)




 


31.12.2022




Guarantees given


Assets provisioned (22)





Ceiling


Signed


Disbursed





EIB ELM guarantees




30 599 




30 599 




20 909 




2 710 






EFSI guarantee




25 793 




24 615 




21 084 




8 571 






EFSD guarantee




1 176 




522




446




728






InvestEU guarantee




21 280 




2 108 




324




1 722 






NDICI external action guarantee




27 020 




4 515 




156




1 067 






Total




105 869 




62 359 




42 919 




14 798 

















(EUR million)




 


31.12.2021




Guarantees given


Assets provisioned (23)





Ceiling


Signed


Disbursed





EIB ELM guarantees




33 026 




33 026 




20 835 




2 700 






EFSI guarantee




25 826 




24 730 




20 358 




8 602 






EFSD guarantee




1 391 




611




535




796






NDICI external action guarantee




200




200




200




—






Total




60 442 




58 566 




41 928 




12 098 





The above tables show 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 at year-end (EUR 19 440 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 2022, operations authorised to be signed but not yet signed (EUR 43 510 million) must be included.
Budgetary guarantee programmes are backed by provisions gradually built up from the budget and kept in the Common Provisioning Fund (‘CPF’) as a liquidity cushion to cover future guarantee calls (see note 2.4.2.1). The amounts provisioned amounted to EUR 14 798 million at 31 December 2022 (2021: EUR 12 098 million). Please see note 6.2 for the measures put in place to ensure that the provisioning is sufficent to cover the guarantee calls in the medium term. Any losses incurred under the budgetary guarantee programmes, above the provisioning set aside, would need in any case to be covered by future budgets.

EIB ELM guarantees

The EU budget guarantees loans signed and granted by the EIB from the EIB's own resources to third countries. At 31 December 2022 the amount of loans outstanding and covered by the EU guarantee totalled EUR 20 909 million. The EU budget guarantees:






—


EUR 20 482 million via the Guarantee Fund for external actions compartment of the CPF; and










—


EUR 427 million directly for loans granted to Member States before accession.




Included in the guarantees given as at 31 December 2022 are EUR 2,1 billion of signed but undisbursed loans for which future disbursements are conditional on approval by the EU.
The EU ELM 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 2014–2021). 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.
With Decision (EU) 2018/412 of the European Parliament and of the Council (24), a private sector lending mandate for projects directed to the long term economic resilience of refugees, migrants, host and transit communities under the EIB Resilience Initiative (‘ERI’) was set-up. The Union budget is remunerated for the risk taken in relation to guarantees granted for EIB financing operations under the ERI Private Mandate, which explains the premium receivable for the ELM guarantee, which is otherwise a non-remunerated guarantee (see note 2.11.2).
The ELM 2014–2020 mandate, which expired in 2021, was the last mandate under the Guarantee Fund for external actions. The new EIB mandate is covered by the External Action Guarantee set up by the NDICI Regulation.
EU guarantee payments are made from the Guarantee Fund for external actions compartment of the CPF. During 2022, EUR 190 million of guarantee calls net of recoveries have been paid out (2021: EUR 93 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 the ‘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 19 250 million) and the SME Window (SMEW) implemented by the EIF (EFSI EU guarantee of EUR 6 750 million), 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. In order to enhance the efficiency of EU Guarantee and to increase its risk bearing capacity, a combination of two EFSI debt portfolios with InvestEU became effective in 2022. Any guarantee calls, recoveries and are distributed between the EFSI and the InvestEU Guarantee based on effective guaranteed allocations.
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 an 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 and the SMEW debt portfolio (see note 2.11.2) and as a derivative (financial asset or liability at fair value through surplus or deficit) for both equity portfolios (see note 2.4.2.2). The EFSI guarantee given includes operations of the COSME, H2020, CCS LGF and EaSI programmes for the part covered by the EFSI EU guarantee under the SMEW debt portfolio.
During 2022, EUR 21 million of net guarantee calls have been paid out from the EFSI Guarantee Fund compartment of the CPF (2021: nil).

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 sustainable development and to address specific socio-economic root causes of migration. Under the EFSD Regulation, the EU was authorised to 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 CPF — see note 2.4.2.1. As at 31 December 2022, seventeen EFSD guarantee agreements were effective with the total guarantee ceiling amounting to EUR 1 176 million, while the outstaning operations signed by the counterparties and guaranteed by the EU under those agreements totalled EUR 522 million. For one of the EFSD guarantee agreements (with a EUR 145 million guarantee ceiling), where the EU guarantees the capital adequacy of a currency hedging fund, in case of a guarantee call the EU holds a reimbursement right to receive shares of the fund worth the amount paid.

NDICI external action guarantee

Regulation (EU) 2021/947 of the European Parliament and of the Council (25) established the Neighbourhood, Development and International Cooperation Instrument — Global Europe (the ‘Instrument’), including the European Fund for Sustainable Development Plus (the ‘EFSD+’) and the External Action Guarantee, for the period of the 2021–2027 MFF. The NDICI Regulation aims to increase the coherence and effectiveness of the EU’s external actions, thus improving the implementation of the different external action policies.
The External Action Guarantee supports the EFSD+ operations covered by budgetary guarantees, macro-financial assistance and loans to third countries. It is backed by the CPF — see note 2.4.2.1.
As at 31 December 2022 six budgetary guarantee agreements were signed and outstanding, for a total ceiling of EUR 27,0 billion, including a guarantee agreement (the successor of the ELM programme) signed with EIB in April 2022 for a total ceiling of up to EUR 26,7 billion. By 31 December 2022 under this agreement operations of EUR 4,5 billion were signed, of which EUR 156 million was disbursed.

InvestEU guarantee

The InvestEU Regulation (Regulation (EU) 2021/523 of the European Parliament and of the Council (26)), allows the Commission to provide up to EUR 26,2 billion in guarantees to support financing and investments of financial institutions. The aim is to help achieve the Union’s objectives in four internal policies: Sustainable infrastructure, Research innovation and digitalisation, Small and medium-sized companies, and Social investment and skills. The Commission is gradually setting money aside (‘provisioning’) from the InvestEU budget into the CPF in order to create a capital buffer for guarantee calls. The InvestEU Regulation has set the provisioning rate at 40 % of the EU guarantee at 31 December 2022.
In March 2022, the Commission signed a first InvestEU guarantee agreement with the EIB Group for a total ceiling of EUR 19,6 billion, which was further increased by EUR 0,3 billion stemming from several EU programmes combined with the InvestEU guarantee (blending operations). As at 31 December 2022, the EU guarantee covered signed operations for a total amount of EUR 2,1 billion, of which EUR 324 million were disbursed. Futhermore, five guarantee agreements with other implementing partners have been concluded for a total amount of EUR 1,4 billion, for which there were no guaranteed operations yet.
In addition to the EU budget, the Member States and EEA countries can contribute to the InvestEU programme from their Cohesion Policy, RRF or national funds. This is an additional amount of EU guarantee with a provisioning rate which is set on a case by case basis. The Commission first signs a contribution agreement with the Member State or EEA country and then a guarantee agreement with an implementing partner. At 31 December 2022, the Commission has signed contribution agreements with five Member States for EUR 1,7 billion (out of which EUR 0,3 billion are back-to-back guarantees) but it has not yet signed guarantee agreements with implementing partners.

UK obligations arising from its departure from the EU

In accordance with Article 143 of the Withdrawal Agreement, the UK shall be liable to the Union for its share of contingent financial liabilities related to EFSI, EFSD and the EIB external lending mandate operations approved by the withdrawal date, 31 January 2020. Article 143 requires that in case of a guarantee call for a financial operation that has been approved before the withdrawal date, the UK would be liable to the Union for its share of payments made by the Union under those operations, unless this could be covered by the UK share of provisioning held in the guarantee fund where this is relevant.
For EIB external lending mandate loans (ELM), the value of the EU budgetary guarantee at the withdrawal date, for the operations approved by the withdrawal date, was EUR 33,7 billion. At 31 December 2022 this had changed to EUR 24,6 billion (2021: EUR 27,6 billion). The UK share of this contingent liability at 31 December 2022 is thus EUR 3,1 billion (31 December 2021: EUR 3,4 billion). As stated above however, any default on these loans is first covered by the Guarantee Fund for external actions compartment of the CPF and amounts would only be called from the UK if the UK provisioning for this fund, of EUR 305 million at 31 December 2022, was not sufficient.
With respect to EFSI operations, the value of the EU budgetary guarantee at the withdrawal date, for the operations approved by the withdrawal date, was EUR 23,5 billion. At 31 December 2022 this had changed to EUR 18,6 billion (2021: EUR 18,8 billion). The UK share of this contingent liability at 31 December 2022 is thus EUR 2,3 billion. Any guarantee calls under EFSI are first covered by the EFSI guarantee fund compartment of the CPF and amounts would only be called from the UK if the UK provisioning for this fund, of EUR 1,0 billion at 31 December 2022, was not sufficient.
As no operations had been approved by the implementing partners in relation to the EFSD Guarantee before the withdrawal date, the UK has no obligations here.
The UK share of the payments made in 2022 for the operations approved on or after the withdrawal date and up to 31 December 2022 amounted to EUR 51 million (EUR 34 million for EFSI and EUR 17 million for ELM), reducing correspondingly the UK provisioning. The amount due to the UK in 2023 is EUR 313 million (see note 2.6.1.2).
4.1.2.   Guarantees given under EU financial instrument programmes (nominal)








(EUR million)




 


31.12.2022


31.12.2021





Horizon 2020




2 649 




2 590 






Connecting Europe Facility




648




568






COSME




674




782






Other




604




653






Total




4 576 




4 593 





The amounts in the above table present the outstanding nominal amounts of the guarantees given under the EU financial instruments programmes.
As outlined 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 COSME Loan Guarantee Facility (LGF) consists primarily of capped guarantees for portfolios of higher risk debt financing (mainly loans) offered by financial intermediaries to SMEs. The COSME LGF is implemented by the EIF on behalf of the EU.
For more details on Horizon 2020 and the Connecting Europe Facility see also note 2.4.2.1.

UK obligations arising from its departure from the EU

With regard to the EU’s contingent liabilities for amounts approved by the withdrawal date in relation to EU financial instruments, including those above, should any of these contingencies crystalise, they would be covered by the EU budget using monies held on fiduciary accounts. Thus in principle no amounts would be called from the UK other than its share in the budgetary RAL as outlined under Article 140 of the WA — see note 2.6.1.2.
4.2.   CONTINGENT LIABILITIES RELATING TO LEGAL CASES

4.2.1.   Legal cases in the area of fines

At 31 December 2022 the contingent liabilities relating to fines amounted to EUR 2 990 million (2021: EUR 2 111 million). 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).
The increase of EUR 1,2 billion is mainly due to receiving a provisional payment from a fined company (EUR 0,9 billion) who withdrew their guarantee in 2022 to replace it with a cash payment.
4.2.2.   Other legal cases








(EUR million)




 


31.12.2022


31.12.2021





Agriculture




194




79






Cohesion




—




210






Other




2 909 




1 153 






Total




3 103 




1 443 






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.

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 considerable increase from the previous year-end mainly concerns the appeal on a dismissed 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.

UK obligations arising from its departure from the EU

Under Article 147 of the WA, the United Kingdom shall be liable for its share of the payments required to discharge the contingent liabilities of the Union that become due in relation to legal cases concerning the financial interests of the Union, provided that the facts forming the subject matter of those cases occurred no later than 31 December 2020. The estimated maximum UK exposure here is EUR 384 million (2021: EUR 179 million). For legal cases where it is considered probable that amounts will be paid from the EU budget (see note 2.10), the UK share is included as part of the overall amount due from the UK — see details under note 2.6.1.2.
4.3.   CONTINGENT ASSETS








(EUR million)




 


31.12.2022


31.12.2021





Guarantees received:



 


 










 



Performance guarantees








282




287











 



Other guarantees








6




8






Other contingent assets




19




98






Total




307




393





Performance guarantees are requested to ensure that beneficiaries of EU funding meet the obligations of their contracts with the EU.
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 2022.
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.
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 86 of the Common Provisions Regulation (CPR) (Regulation (EU) 2021/1060 of the European Parliament and of the Council (27)) 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 budgetary commitments of the Union in respect of each programme shall be made in annual instalments for each fund during the period between 1 January 2021 and 31 December 2027. 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 note 5.2 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, which are 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 amount 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 by the reporting date. 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, see note 5.1.
The disclosures below thus represent amounts at 31 December 2022 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.








(EUR million)




 


Note


31.12.2022


31.12.2021





Outstanding budgetary commitments not yet expensed




5.1




364 503 




266 526 






Significant legal commitments




5.2




406 284 




135 181 






Total



 



770 787 




401 707 





5.1.   OUTSTANDING BUDGETARY COMMITMENTS NOT YET EXPENSED








(EUR million)




 


31.12.2022


31.12.2021





Outstanding budgetary commitments not yet expensed




364 503 




266 526 





The amount disclosed above is the budgetary RAL (‘Reste à Liquider’) of EUR 452 821 million (see Table 6.4 in 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 decommitments have not yet been made. This is the normal consequence of the existence of multi-annual programmes. The significant increase compared to 2021 is related to the inscription of the last RRF budgetary commitments (see also 5.2 below).
It should be noted that outstanding pre-financing advances at 31 December 2022 totalled EUR 100,5 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.   SIGNIFICANT LEGAL COMMITMENTS








(EUR million)




 


31.12.2022


31.12.2021





Economic, Social and Territorial Cohesion




298 948 



—





Natural Resources and Environment




82 372 




17 662 






Migration and Border Management




8 368 



—





RRF (NGEU) non-repayable support commitments



—



99 530 






ITER




5 855 




6 121 






Space Programmes




3 548 




4 189 






Fisheries agreements




265




412






HorizonEU




322




382






Euratom




362




445






Brexit Adjustment Reserve




296




3 072 






Connecting Europe Facility




1 811 



—





EU Solidarity Fund




700



—





Operating lease commitments




2 539 




2 492 






Other contractual commitments




896




876






Total




406 284 




135 181 





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

Funds under shared management

These are legal obligations that the EU has committed to pay 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, it represents a legal commitment within the meaning of that Regulation.
Article 86(2) of the Common Provisions Regulation (CPR) for shared management funds states:






 



                                 ‘The budgetary commitments of the Union in respect of each programme shall be made by the Commission in annual instalments for each Fund during the period between 1 January 2021 and 31 December 2027
                                 ’.




The amounts disclosed on the first three lines of the table above relate to the Heading 2A (Economic, Social and Territorial Cohesion), Heading 3 (Natural Resources and Environment) and Heading 4 (Migration and Border Management) of the MFF 2021–2027 . They represent the outstanding amounts that the EU will commit budgetarily and then pay after 31 December 2022.

NGEU (RRF) non-repayable support commitments

The RRF is a key programme of NGEU, the EU Recovery Instrument. It was established by Regulation (EU) 2021/241 of the European Parliament and of the Council (28). It finances reforms and investments in Member States from the start of the coronavirus pandemic in February 2020 until 2026. Article 23 of Regulation (EU) 2021/241 authorises the use of annual instalments. The legal commitments signed up to 31 December 2022 in the framework of this programme represent approximately 70 % of the overall amount for the non-repayable support of the RRF, as per Article 11 of the Regulation. They have been entirely covered by budgetary commitments at 31 December 2022.

ITER — International Thermonuclear Experimental Reactor

These commitments are intended to cover future funding needs of the ITER facilities up to 2027. The EU (Euratom) contribution to ITER International is given through the Fusion for Energy Agency, including also the contributions from Member States and from Switzerland. The amount reflects the prospective financing under the MFF 2021–2027 established by Council Decision (Euratom) 2021/281 (29) 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 together with various other countries.

Space Programmes

The space programme includes the following components: Galileo, EGNOS, Copernicus, Govsatcom and SSA. The most significant are Galileo, which is developing the European Global Navigation Satellite System, and Copernicus, which is related to the European Earth observation. These commitments are made for the period until 2027. Based on Regulation (EU) 2021/696 of the European Parliament and of the Council (30), the Commission signed contribution agreements with the European Space Agency (ESA), EUMETSAT, Mercator and the European Centre for Medium Range weather forecasts. Article 11.6 of Regulation (EU) 2021/696 authorises the use of annual instalments.

Fisheries agreements

These represent commitments entered into with third countries for operations under international fisheries agreements up to 2026. The commitments made are based on Council decisions for each third country (e.g. agreement between the EU and the Republic of Seychelles and the Implementation Protocol thereto; OJ L 60, 28.2.2020) and are considered specific international treaties with multi-annual rights and obligations.

Horizon Europe

These are amounts committed to the Horizon Europe programme for upstream and downstream activities for the various space components. These commitments are made for the period until 2027. Based on Regulation (EU) 2021/695 of the European Parliament and of the Council (31), the Commission signed a contribution agreement with ESA. Article 12.8 of Regulation (EU) 2021/695 authorises the use of annual instalments.

Euratom

Euratom is a programme based on Council Regulation (Euratom) 2021/765 (32). Article 4 of the regulation foresees the use of the annual instalments.
The general objective of the Programme is to pursue nuclear research and training activities, with an emphasis on the continuous improvement of nuclear safety, security and radiation protection, as well as to complement the achievement of Horizon Europe’s objectives inter alia in the context of the energy transition. The Euratom Programme provides research grants through competitive calls for proposals and to named beneficiaries.

Brexit Adjustment Reserve (BAR)

The Brexit Adjustment Reserve (BAR) aims to counter the economic and social consequences of the United Kingdom’s withdrawal from the European Union (EU) in February 2020. It was established by Regulation (EU) 2021/1755 of the European Parliament and of the Council (33). The amount disclosed represents the legal commitments still to be implemented as part of the measures supported by the BAR. Only the part of the legal commitments not yet covered by budgetary commitments is disclosed here.

European Union Solidarity Fund (EUSF)

The European Union Solidarity Fund (EUSF) was set up to respond to major natural disasters and express European solidarity to disaster-stricken regions within Europe. The EUSF has been established by Council Regulation (EC) No 2012/2002 (34) and amended by Regulation (EU) No 661/2014 of the European Parliament and of the Council (35) and Regulation (EU) 2020/461 of the European Parliament and of the Council (36). The amount disclosed represents the legal commitments not yet covered by budgetary commitments.

Connecting Europe Facility (CEF2)

The CEF2 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 2021 until 2027 for CEF Energy (with a possibility to be extended). The legal basis of these commitments is Regulation (EU) 2021/1153 of the European Parliament and of the Council (37), with the Article 4.5 stating that ‘Budgetary commitments for actions extending over more than one financial year may be broken down into annual instalments, over two or more years’.

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:









(EUR million)




 


Minimum lease payments




< 1 year


1–5 years


> 5 years


Total





Buildings




449




1 040 




1 005 




2 493 






IT materials and other equipment




12




27




7




46






Total




461




1 067 




1 012 




2 539 





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 (38), 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 366 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 505 million).
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 NGEU, EFSM, BOP, MFA, SURE 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 the Common Provisioning Fund for budgetary guarantees, the ECSC in liquidation and the BUFI portfolio;










—


Financial instruments financed by the EU budget; and










—


EU budgetary guarantee programmes.




6.1.   TYPES OF FINANCIAL RISK

The EU is exposed to and manages the following main financial risks stemming from its financial instruments:

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 (such as equity 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; and










—



Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.





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 an EU entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
6.2.   RISK MANAGEMENT POLICIES


Measurement of financial instruments

The following classes of financial assets and liabilities are not measured at fair value: cash and cash equivalents, loans, exchange receivables other than financial guarantee contract receivables when classified to financial assets at FVSD, borrowings, financial guarantee contracts and other financial liabilities measured at amortized 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 and NGEU

The borrowing and lending transactions are carried out by the EU according to the respective Council Regulations, Council and European Parliament 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. Financial and operational risks are identified and evaluated and compliance to internal guidelines and procedures is checked regularly.
Lending operations other than NGEU are financed by ‘back-to-back’ borrowings, which thus do not generate open interest rate or currency positions. Loans provided under NGEU do not follow a back-to-back approach as is done for the other financial assistance instruments. Instead, a diversified funding strategy has been developed for the NGEU which combines a wide range of funding instruments. The diversified funding strategy has required the development and implementation of efficient risk management guidelines and procedures for the NGEU instrument that actively address the related risks on a daily basis.

NGEU Risk Governance

With the start of NGEU in 2021, the Commission appointed a Chief Risk Officer, established an appropriate governance structure and adopted a High Level Risk and Compliance Policy (‘HLRCP’) covering NGEU borrowing, debt management and lending operations (‘NGEU operations’). The HLRCP comprises an appropriate risk management and compliance framework for the oversight of the risks and compliance matters arising from the implementation of NGEU borrowing, debt management and lending operations (39). It provides an overarching framework for the risk management guidelines applicable to the NGEU operations by identifying all material risks arising from the implementation of the NGEU operations. The scope of the HLRCP is limited to the oversight of the risks and compliance matters arising solely from the implementation of NGEU operations.
Decision C(2021) 2502 established the role of the Chief Risk Officer and the Risk and Compliance Committee (‘RCC’). Both the role of the CRO and the RCC were further elaborated by the HLRCP. The latter supplements the NGEU governance framework as set out in the Decision C(2021) 2502 (40), and further elaborates the main roles and responsibilities related to the risk management and compliance framework of the NGEU operations.
The role of the CRO is to ensure that the systems and processes used to implement the NGEU operations are designed to ensure protection of the financial interests of the Union and the sound financial management of the operations. The CRO prepares the HLRCP to ensure that risks related to NGEU operations are appropriately identified, managed and controlled, and checks that the HLRCP is implemented in a comprehensive and consistent manner.
The CRO, supported by the RCC, deploys the risk management framework through internal risk policies and procedures. The RCC is an internal committee of the Commission whose role is to support the CRO in the conduct of its responsibilities. The RCC adopts positions on matters related to the risk management framework for NGEU operations.
Finally, the CRO reports to the Member of the College responsible for the Budget with respect to the responsibilities set out in Chapter 4 of Decision C(2022) 9700. The CRO exercises its role independently and enjoys autonomy in carrying out the assigned tasks and responsibilities.
In relation to the NGEU operations, the ‘three lines of defence’ model for risk management was deployed to: (i) ensure the appropriate segregation of powers and duties; (ii) clearly define lines of authority; and (iii) ensure distinct roles and responsibilities for the management and control of risk.

Treasury

The rules and principles for the management of the Commission’s treasury operations are laid down in Regulation (EU, Euratom) No 609/2014 (as amended by Council Regulation (EU, Euratom) 2016/804 (41)) 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; and










—


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

Asset management

The control of the various risks related to the asset management activities is based on dedicated governance and working procedures adopted following benchmarking with the highest standards adopted by peer international institutions. These procedures, which were subject to various internal and external audits, ensure the achievement of a sound asset management.
The Commission has put in place the appropriate governance to review and approve technical and strategic decisions in relation to asset management operations. The asset management operations are supervised by two committees, the Risk Committee composed of representatives of DG BUDG, and the Asset Management Board composed of representatives of DG BUDG, DG ECFIN and DG FISMA. Technical decisions are discussed and approved in the Risk Committee, while strategic decisions are endorsed by the Risk Committee and Asset Management Board before final approval of the Director General of DG BUDG, in agreement with the Accounting Officer.
The asset management governance guarantees clear delegation of decision-making and lines of accountability, adequate segregation of duties between Front Office, Risk Management and Back Office, clearly defined roles and well-framed and documented procedures and processes and checks and balances at all levels. The compliance procedures provide the framework for adequate rules for codes of conduct to manage potential personal conflicts of interest as well as rules to manage risks of insider trading.
The Asset Management Guidelines and internal investment restrictions provide a solid internal control framework to ensure the safeguarding of assets. In particular, assets under the form of securities are kept with our custodian in accordance with market best practices, while cash and deposits are placed with highly rated financial institutions. The safeguarding of financial assets is also assured by segregation of duties between the team responsible for initiation of securities deals and back-office team responsible for their settlement and bank reconciliation. An additional layer of control is assured by accounting team during monthly closure reconciliation process when the portfolio of securities is reconciled with the security custodian’s statement. Any settlement discrepancies and late payments caused by counterparties are followed by bank reconciliation and back-office team on daily basis. For the monitoring of the respect of the control framework, an exhaustive set of performance and risk metrics for the assets under management is reported periodically to the relevant stakeholders.
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.

Common Provisioning Fund

By Commission Decision C(2020) 1896 of 25 March 2020 on the asset management guidelines of the CPF (AMG), the responsibilities and tasks of the CPF financial manager were delegated to the Director General of the Directorate-General for Budget (DG BUDG). The CPF is kept separate from the other portfolios managed by DG BUDG. The Fund does not exist as a separate legal entity.
The CPF is managed according to the asset management guidelines. The objective is to ensure the necessary liquidity to meet all required outflows, such as guarantee calls, fully and promptly, and to provide capital preservation over the investment horizon of the fund, with a high confidence level.
To attain the general objective described above, the financial manager of the CPF manages the assets in accordance with prudential rules and the principles of sound financial management and in accordance with the rules and procedures set out by the accounting officer of the Commission. Written procedures manuals covering specific areas, such as treasury management, have been developed and are used by the relevant operating units. Financial and operational risks are identified and evaluated and compliance with internal guidelines and procedures are checked regularly.
The CPF portfolio is constituted so as to ensure a high degree of diversification across eligible asset classes, geographical areas, issuers and maturities in order to manage fluctuations in portfolio value.
As the sole counterparty for all outstanding currency forwards as of 31 December 2022 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.

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:






—


ensuring 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.




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 received

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 2.6.1.3. 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.

EU budgetary guarantee programmes

The Financial Regulation has enshrined, in its Title X, several safeguards to protect the EU budget against the financial risks created through the use of budgetary guarantees. They can be grouped in four main categories:
1.   Measures to limit the amount of the contingent liabilities
First, the size of the EU guarantee is as a rule capped in a clearly defined manner. The Financial Regulation sets out that the financial liability and the aggregate net payments from the budget cannot exceed the amount of the budgetary guarantee, authorised by its basic act. The contingent liability generated by a budgetary guarantee can only exceed the financial assets provided to cover the EU financial liability if this is provided for in the underlying basic act and under the specific conditions it sets.
Secondly, the desired risk profile of the operations/financial products guaranteed by the EU is determined, as far as possible, ex ante, i.e. before the signature of the guarantee agreements.
2.   Measures concerning the selection of implementing partners
Budgetary guarantee programmes are implemented with reliable, pillar-assessed partners. This ensures the reliability of, inter alia, the accounting, financial and risk management systems of these implementing partners (IPs). Furthermore, these IPs commit own resources ensuring appropriate alignment of interest with the Union.
3.   Measures to ensure adequate ex-ante budgetary capacity to absorb guarantee calls
Budgetary guarantee programmes are backed by provisioned assets that are kept in the CPF. The provisioning rate is set, in the basic act of each programme, at such a level as to allow the programming of budgetary appropriations to constitute a provision that would allow the absorption of losses without budgetary disruption. The provisioning is hence sufficient to cope with the expected and, to a certain level, also the unexpected losses of these budgetary guarantees.
Subsequently, the Commission will ensure (annually) the adequacy of the provisioning rate as defined in the basic act and its alignment with the Financial Regulation principles and with the financial programming.
4.   Measures to deal with realised losses exceeding the ex-ante estimation
The Financial Regulation introduces two early warning thresholds (i.e. when 50 % and 30 % of the provisioning rate remain available). Those warning thresholds allow the Commission to anticipate a potential exhaustion of the provisioning before the termination of the budgetary guarantee and allow the Commission to evaluate whether it should propose additional provisioning.
In case additional liquidity is temporarily needed there are procedures in place such as transfers between CPF compartments and the use of central treasury liquidity, as well as the use of available budgetary space (commitment and payment appropriations).
Furthermore, a Steering Committee on Contingent Liabilities arising from Budgetary Guarantees was established under the authority of the Commissioner for Budget in 2020. It intervenes in matters covering budgetary guarantees and financial assistance creating contingent liabilities to the budget generated from the implementation of Title X of the Financial Regulation, including those provisions laid down in the Internal Rules on the implementation of the general budget of the Union. This includes the risk management framework, relevant common horizontal provisions of the standard agreements and integrated reporting to establish corporate requirements for the sustainable management of contingent liabilities.

Financial instruments programmes

The implementation of the EU budget has relied for many years on the use of financial instrument programmes. For more information on the amounts concerned — see note 2.4.2.
Common to most financial instruments is the fact that the implementation is delegated either to the EIB group (including the 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 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 the 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.
6.3.   CURRENCY RISK


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













(EUR million)




 


31.12.2022




USD


GBP


PLN


SEK


Other


EUR


Total





Financial assets



 


 


 


 


 


 


 





Financial assets at AC
 (6)




83




6



—


—



12




151




251






Financial assets at FVSD



 


 


 


 


 


 


 










 



Non-derivatives








843




25



—



20




98




29 088 




30 073 











 



Derivatives








(483)



—


—


—


—



1 467 




984






Receivables
 (7)




89




111




14




0




17




5 453 




5 684 






Cash and cash equivalents




84




13




1 031 




473




1 421 




43 522 




46 544 





 



616




155




1 045 




493




1 548 




79 681 




83 537 






Financial liabilities



 


 


 


 


 


 


 





Financial guarantee liability




(793)




(0)




(37)




(12)




(164)




(5 450 )




(6 456 )






Financial liabilities at FVSD




(1)



—


—



8




19




(50)




(25)





 



(795)




(0)




(37)




(4)




(146)




(5 500 )




(6 481 )






Total




(179)




154




1 008 




489




1 403 




74 181 




77 056 




















(EUR million)




 


31.12.2021




USD


GBP


PLN


SEK


Other


EUR


Total





Financial assets



 


 


 


 


 


 


 





Financial assets at AC
 (6)




63




18



—


—



7




88




176






Financial assets at FVSD



 


 


 


 


 


 


 










 



Non-derivatives








934




51



—



23




75




23 141 




24 223 











 



Derivatives








(646)



—


—


—


—



1 474 




828






Receivables
 (7)




109




98




108




4




88




7 372 




7 780 






Cash and cash equivalents




85




24




1 014 




591




1 692 




41 455 




44 860 





 



545




192




1 121 




618




1 862 




73 529 




77 866 






Financial liabilities



 


 


 


 


 


 


 





Financial guarantee liability




(1 047 )




(0)




(62)




(19)




(248)




(6 418 )




(7 794 )






Financial liabilities at FVSD




(1)



—


—


—



(4)



—



(5)





 



(1 048 )




(0)




(62)




(19)




(251)




(6 418 )




(7 798 )






Total




(503)




192




1 059 




599




1 611 




67 111 




70 068 





If the EUR had strengthened or weakened against other currencies by 10 %, then it would have had the following impact on the economic result:









(EUR million)




FX Rate Increase (+)/
Decrease (-)


2022




USD


GBP


PLN


SEK





+10 %




16




(14)




(92)




(44)






-10 %




(20)




17




112




54

















(EUR million)




FX Rate Increase (+)/
Decrease (-)


2021




USD


GBP


PLN


SEK





+10 %




46




(17)




(96)




(54)






-10 %




(56)




21




118




67






Borrowing and lending activities for NGEU and 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 Regulation (EU, Euratom) No 609/2014 (as amended by Regulation (EU, Euratom) 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 abovementioned 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, including USD, GBP 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, and 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.

Fines

All fines are imposed, paid or provisionally covered in EUR and therefore do not pose any foreign currency risk when they are held in the BUFI Fund.

Budgetary guarantees

Budgetary guarantees as a rule are extended with a maximum cap defined in EUR. However, some underlying operations may be denominated in other currencies (USD or other local currencies).
Currency risk is part of the considerations taken into account when determining the provisioning needs.

Common Provisioning Fund

The CPF 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.
The loans subrogated to the EU as result of calls on the fund following payment defaults by a loan beneficiary — see note 2.4.1.2 — 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.
6.4.   INTEREST RATE RISK

The following table illustrates the interest rate sensitivity of debt securities and ETFs by disclosing the impact that a change in interest rates of +/- 100 basis points (1 %) would have on the EU economic result.







(EUR million)




 


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


Economic result





2022: Financial assets at FVSD




+100




(741)






-100




784






2021: Financial assets at FVSD




+100




(622)






-100




660





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

Borrowing and lending activities for NGEU and financial assistance

Due to the nature of its borrowing and lending activities, the EU has significant interest-bearing assets and liabilities. However, for the financial assistance instruments, excluding NGEU, there is no interest rate risk since the borrowings are offset by equivalent loans at the same terms and conditions (back-to-back).
The NGEU instrument does not apply a back-to-back approach and, therefore, interest rate risk has to be covered by implementation of procedures and mechanisms that mitigate the interest rate risk. The underlying principle behind the NGEU diversified funding strategy is to allocate the cost of funding and all other NGEU related costs to beneficiaries (for loans) and to the EU budget (for non-repayable support) in a transparent way. The NGEU programme is guided by the principles of full cost recovery and not-for-profit operation. Therefore, the EU passes on the funding it obtains in the market in the most cost-effective and equitable way based on daily interest calculations. That ensures that Member States bear all costs related to the loans and borrowings incurred by the Union.
The NGEU holds cash in order to maintain a defined safety buffer as part of a diversified funding strategy while avoiding any excess balances. The NGEU cash is kept at the European Central Bank. Since 4 April 2022 the euro money market short term interest rate applies to any outstanding cash balance. Previously, the outstanding cash balance was subject of ECB deposit facility rate that was -0,5 %. Based on a mutual agreement, only outstanding cash balances over EUR 20 billion were subject to negative interest at the ECB. Based on NGEU cost allocation methodology, interest not allocated to loans or non-repayable support are subject of invoicing to loans beneficiaries and EU budget in form of Liquidity management costs that can be positive or negative depending on the evoluition of interest rates applied on cash balances.

Treasury

Except for the borrowing related to the NGEU programme, the Commission does not borrow money to fund its operational expenditure. Beyond the interest rate exposure on NGEU, interest is calculated on balances held on the different bank accounts. The Commission has therefore put in place measures to ensure that interest earned (positive or negative) on its bank accounts regularly reflect 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 at the official rates applied by each institution. During the period of negative interest environment (until September 2022), some of the remunerations applied to these accounts were negative. Cash management procedures are adapted according to the market interest conditions in order to minimise balances kept on these accounts when negative interests applied and appropriate ceilings are respected according to the banks conditions. Own resources accounts are protected from any impact of negative interest in accordance with Regulation (EU, Euratom) No 609/2014 (as amended by Regulation (EU, Euratom) 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.

Fines

The provisionally cashed fines are invested in a portfolio of long-term bonds with an average portfolio duration of 1,33 years.

Common Provisioning Fund

The funds in the CPF are invested in a portfolio of long-term bonds and corporate ETFs with a total average portfolio duration of 3,17 years.

ECSC in liquidation

The ECSC in liquidation amounts are invested in a portfolio of long-term bonds with an average portfolio duration of 3,17 years.
6.5.   CREDIT RISK


Maximum credit risk exposure








(EUR million)




 


31.12.2022


31.12.2021





Financial assets



 


 





Loans




204 354 




163 568 






Cash and cash equivalents




46 544 




44 860 






Exchange receivables
 (42)




5 684 




7 780 






Financial assets at FVSD — debt securities




24 647 




19 326 






Financial assets at FVSD — derivatives




984




828






Guarantees given and loan commitments



 


 





FGCs




55 502 




55 267 






Loan commitments




8



—





Total at 31.12.2022




337 723 




291 628 





In addition, the EU is indirectly exposed to the credit risk through its investments in MMFs, corporate ETFs and pooled portfolios of debt securities (see note 2.4.2.1), which may impact their prices (see note 6.7).

Loans: credit quality











(EUR million)




 


31.12.2022




Stage 1


Stage 2


Stage 3


POCI


Total





Credit rating



 


 


 


 


 





Premium and high grade




12 849 



—


—


—



12 849 






Upper medium grade




62 240 



—


—


—



62 240 






Lower medium grade




106 537 



—


—


—



106 537 






Non-investment grade (incl. default)




11 923 




13 094 




29




114




25 160 






Gross carrying amount




193 549 




13 094 




29




114




206 786 






Minus loss allowance



(55)


(2 361 )


(27)


13



(2 431 )






Net carrying amount




193 494 




10 732 




2




126




204 354 


















(EUR million)




 


31.12.2021




Stage 1


Stage 2


Stage 3


POCI


Total





Credit rating



 


 


 


 


 





Premium and high grade




10 379 



—


—


—



10 379 






Upper medium grade




58 991 



—


—


—



58 991 






Lower medium grade




79 672 



—


—


—



79 672 






Non-investment grade (incl. default)




8 819 




5 965 




29




48




14 860 






Gross carrying amount




157 861 




5 965 




29




48




163 903 






Minus loss allowance



(10)


(299)


(26)


—



(336)






Net carrying amount




157 851 




5 665 




3




48




163 568 





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’s P-1, Aaa — Aa3; S&P A-1+, A-1, AAA — AA -; Fitch F1+, F1, AAA — AA- and equivalent










—


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










—


Lower medium grade: Moody’s P-3, Baa1 — Baa3, S&P A-3, BBB+ — BBB-; Fitch F3, BBB+ — BBB- and equivalent










—


Non-investment grade: Moody’s not prime, Ba1 — C; S&P B, C, D, BB+ — D; Fitch B, C, D, BB+ — D and equivalent










—


The EU uses these external rating agencies’ 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 abovementioned rating agencies may have downgraded the corresponding counterparty.




The loans in the non-investment grade are mainly financial assistance loans to partner countries in financial difficulties, also to some Member States which are rated in the upper limit of this grade. All loans to Member States are in Stage 1. Stage 2 includes EUR 11,9 billion of MFA and Euratom loans to Ukraine. The POCI loans are the subrogated loans from the EFSI and ELM programmes.

Borrowing and lending activities for NGEU and financial assistance

Exposure to credit risk is managed by obtaining state guarantees in the case of Euratom (see note 2.4.1.1).
Loans provided to Ukraine under the exceptional MFA programme (EUR 6 billion disbursed in 2022) are firstly covered by their compartment in CPF, and then also by additional Member States guarantees.
Loans provided to Member States under the SURE instrument are underpinned by a system of voluntary guarantees from Member States, amounting to 25 % of the maximum ceiling available for the related financial assistance.
In case of default of the debtors, and in order to service any related debt due, the Commssion may draw on the assets held in the CPF (for MFA and Euratom loans to third countries) and call upon Member States, while respecting the own resources ceilings (see note 6.6).

Loans: Movement in impairment loss allowance











(EUR million)




 


Stage 1


Stage 2


Stage 3


POCI


Total





Loss allowance at 1.1.2022




10




299




26



—



336






Transfer to Stage 1




—



—


—


—



—






Transfer to Stage 2




(0)




1




(1)



—



0






Transfer to Stage 3




(1)




(0)




1



—



—






New loans




9




763




—



—



772






Derecognitions — repayments




(0)




—




—



—



(0)






Derecognitions — write offs



—


—



(2)



—



(2)






Loss allowance remeasurement




37




1 298 




3




(13)




1 326 






Other




—



—



—



—



—






Loss allowance at 31.12.2022




55




2 361 




27




(13)




2 431 





The additional impairment loss allowance on Stage 2 loans refers mainly to MFA and Euratom loans to Ukraine (see note 2.4.1.1).

Loans: Staging assessment

As referred to in the significant accounting policies, the impairment allowance for the financial assets at amortized cost other than receivables depends on the stage to which a financial asset is classified.
The allocation to stages mainly depends on the counterparty’s credit rating. The staging model relies on a relative assessment of credit risk, that is, the EU may have different loans with the same counterparty in different stages, depending on the counterparty’s credit risk at origination. The EU, having a unique institutional status, lends money to its Member States or to sovereigns in difficulty. As a result, the EU also applies also a qualitative assessment of the credit risk based on monitoring the economic situation of borrowers in difficulty.

Stage 1 — No significant increase in credit risk

Loans to counterparties with credit ratings in the investment grade (i.e. between AAA (Aaa) and BBB- (Baa3) on the S&P/Fitch (Moody’s) rating scale or an equivalent external or internal rating) at the reporting date, are considered low credit risk loans, and thus held in Stage 1, except if they are overdue for more than 30 days (see Stage 2). In addition, any loans for which a significant increase in credit risk did not occur, as defined below, are classified to Stage 1. For the financial assets in Stage 1, the impairment allowance is measured at the level of the 12 month expected credit losses (‘ECL’).

Stage 2 — Significant increase in credit risk

In order to determine whether there has been a significant increase in the credit risk since origination, and a thus whether moved to Stage 2 applies, the EU applies a combination of quantitative and qualitative assessments.
All loans for which contractual payments are overdue by between 31 and 90 days, are moved to Stage 2.
For counterparties with credit ratings between AAA (Aaa) and BB- (Ba3) at the initial recognition date: Unless the low risk case (above in Stage 1) applies, the deterioration is considered significant if the difference between the rating at origination and that at the reporting date is equal or superior to 3 notches.
For counterparties with credit ratings of B+ (B1) or B (B2) at initial recognition date: The deterioration is considered significant if the difference between the initial rating and the current rating is equal or superior to 2 notches.
For counterparties with credit ratings of B- (B3) or lower (in CCC/Caa range): The deterioration is considered significant if the difference between the initial rating and the current rating at the reporting date is equal or superior to 1 notch.
Loans originated before the transtion to the revised EAR 11 (i.e. 1 January 2021), for which no information on the credit risk at initial recognition is available without undue cost and effort are classified to Stage 2.
For loans in Stage 2, the impairment allowance is measured at the level of life-time expected credit losses.

Stage 3 — Credit impaired loans

Loans are classified in Stage 3 when they are 90 days past due or when one or more events occur after the loan origination that have a detrimental impact on the estimated future cash flows of that financial asset. For example, a loan is classified to Stage 3, if:






—


It is becoming probable that a borrower will enter bankruptcy or other financial reorganisation;










—


The borrower has a rating class of D published by an external rating agency; and










—


The borrower is in default under any financial obligation towards the EU, or in case of loans for financial assistance, if the borrower is in default to any other international organisation financing the programme.




For loans in Stage 3, the impairment allowance is measured at the level of life-time expected credit losses.

Purchased or originated as credit impaired (‘POCI’)

The EU also holds ‘purchased or originated as credit impaired’ (‘POCI’) loans. These are defaulted loans where the EU paid a guarantee call to the implementing partner. For these loans, all rights have been subrogated to the EU. The EU recognises them on its balance sheet at fair value at initial recognition. The EU classifies them as POCI loans and calculates an impairment allowance based on a lifetime ECL. Under the relevant agreements between the EU and the implementing partners, recovery proceedings are undertaken on behalf of the EU with the aim of recovering any sums due.

Loans: ECL measurement

The ECL measurement is a probability-weighted estimation of the difference between the contractual cash flows and the expected cash flows. The EU uses the following credit risk parameters for this estimation:






—


Probability of default (‘PD’);










—


Loss given default (‘LGD’); and










—


Exposure at default (‘EAD’).




The PD is a percentage and represents the likelihood of a counterparty defaulting on its financial obligation, either over the next 12 months (used for the ‘12 months ECL’), or over the remaining lifetime of the obligation (used for the ‘Lifetime ECL’).
The LGD is a percentage showing the expected cash shortfall i.e. the part of the exposure expected to be lost after a default, taking into account recoveries and collaterals. In order to estimate the LGD on sovereign exposures, the EU takes into account its de facto preferred creditor status.
The EAD is the outstanding exposure (amount) at the time of a default.
The estimated cash flows over the expected life of the financial asset are discounted at the effective interest rate.
The EU considers reasonable and justified forward looking information, available without undue cost and effort, and adjusts the model parameters when necessary.

Cash and cash equivalents: credit quality








(EUR million)




 


31.12.2022


31.12.2021





Credit rating



 


 





Premium and high grade




40 769 




40 716 






Upper medium grade




3 675 




3 650 






Lower medium grade




1 343 




306






Non-investment grade




757




189






Gross carrying amount




46 544 




44 860 






Minus loss allowance



—


—





Net carrying amount




46 544 




44 860 






Treasury

The amounts of cash and cash equivalents in the table above relate mainly to the cash managed by the Commission treasury. Most of the Commission's treasury resources are kept, in accordance with Regulation (EU, Euratom) No 609/2014 (as amended by Regulation (EU, Euratom) 2016/804) on own resource accounts opened by Member States for the payment of their own resources contributions (mainly GNI, VAT and TOR). 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 54 million on average, spread over around 25 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 2022 between EUR 7 billion and EUR 38 billion, and with an overall amount of payments made from Commission bank accounts in 2022 that exceeded EUR 175 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 calls for tender. The minimum long-term credit rating required for admission to the tendering procedures is S&P A- or equivalent. A lower level may be accepted in specific and duly justified circumstances;










—


Beyond the minimum credit rating requirements specified in the calls for tender, the counterparty risk management policy applied monitors the ratings and defines a maximum exposure on each financial institution. This ceiling, the maximum overall exposure in cash, deposits and financial guarantees per counterparty, is calculated taking into account the creditworthiness (long term credit rating) and the capitalisation of the financial sector entity. The EC counterparty risks are monitored and reported on regularly; and










—


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.





NGEU

Lending and borrowing instruments for financial assistance do not, in general, keep any outstanding cash balances due to underlying back-to-back principle of the financial assistance loans. However, with implementation of diversified funding strategy for the NGEU instrument, NGEU holds cash with the objective of ensuring that amounts held on the NGEU bank account are sufficient to meet all upcoming disbursement needs and maintaining a defined safety buffer while avoiding any excess balances. The cash is placed on a bank account at the ECB, thus, the credit risk is very low.

Provisionally cashed fines: deposits

Deposits held in commercial banks for fines provisionally cashed before 2010 have been largely decreased in 2022. These deposits are selected by tender procedure and the above described counterparty risk policy is applied.

Receivables: credit quality












(EUR million)




 




 


Not due


Past due


Past due


Past due


Past due


Total




 


 


0–30 days


31–90 days


91 days–1 year


> 1 year




Gross carrying amount


1 613 


18


14


21


1 992 



3 658 






Minus loss allowance



(2)


(2)


(5)


(13)


(150)



(172)






Net carrying amount at 31.12.2022




1 611 




16




9




8




1 842 




3 486 





Gross carrying amount


2 785 


15


9


578


1 453 



4 840 






Minus loss allowance



(2)


(1)


(4)


(18)


(147)



(173)






Net carrying amount at 31.12.2021




2 783 




14




5




560




1 305 




4 667 






The amounts in this table do not include deferred charges and FGC receivable leg measured at FVSD (see note 2.6.2), as they are not subject to the impairment requirements.






Financial assets at FVSD — debt securities: credit quality


Common Provisioning Fund

The weighted average credit rating of the CPF portfolio is A (S&P or equivalent).

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 weighted average credit rating of the portfolio is AA- (S&P or equivalent).

Financial guarantees received

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.

ECSC in liquidation

The weighted average credit rating of the portfolio is A- (S&P or equivalent).

Financial assets at FVSD — derivatives: credit quality

The derivative assets mainly relate to the guarantees on equity portfolios and to currency forward contracts. Therefore, the credit risk is limited to the counterparty risk. The guarantee on equity will be settled with the EU implementing partner, the EIB Group, which is rated AAA. The sole counterparty for all outstanding currency forwards as of 31 December 2022 is the Banque de France, hence no credit enhancements, such as collateral, netting agreements or guarantees are put in place as of this date.

Financial guarantee contracts: credit quality












(EUR million)




 


31.12.2022


31.12.2021




Stage 1


Stage 2


Total


Stage 1


Stage 2


Total





Long-term rating



 


 


 


 


 


 





Prime and high grade




0




4




4




0




1




1






Upper medium grade




3



—



3




2



—



2






Lower medium grade




23



—



23




219



—



219






Non-investment grade




24 124 




31 339 




55 463 




3 964 




51 079 




55 043 






Managed on collective basis / not rated




7




2




9




2



—



2






Total




24 157 




31 345 




55 502 




4 187 




51 080 




55 267 






Financial guarantee contracts: Movement in the loss allowance









(EUR million)




 


Stage 1


Stage 2


Total





Loss allowance at 1.1.2022




485




7 048 




7 533 






Transfer to Stage 2




(3)




3



—





Transfer to Stage 1




2 855 




(2 855 )



—





Additions




170




45




215






Release of guarantees




(9)




(1)




(10)






Remeasurement




(2 298 )




(1 110 )




(3 409 )






Loss allowance at 31.12.2022




1 199 




3 130 




4 330 






Financial guarantee liability carrying amount at 31.12.2022




3 194 




3 263 




6 456 






Transfers from and to stage 1 / stage 2 are measured at the opening balance impairment allowance, whereas the changes of the amount arising from the change of the stage (i.e. measurement at 12-months or lifetime ECL) are part of re-measurement.






Financial guarantee contracts: staging policies

The key risk indicator for the allocation of FGC to stages is the credit rating of the guaranteed debt. The staging model compares the credit rating at origination to the credit rating at the reporting date. For portfolio guarantees, the weighted average credit rating of the guaranteed portfolio is considered.

Stage 1 — No significant increase in credit risk

FGC with credit ratings in the investment grade (i.e. between AAA (Aaa) and BBB- (Baa3) on the S&P/Fitch (Moody’s) rating scale or an equivalent external or internal rating) at the reporting date are considered low credit risk, independent of the initial credit rating, and held in Stage 1. In addition, any FGC for which a significant increase in credit risk did not occur, as defined below, are classified to Stage 1. For the FGC in Stage 1, the impairment allowance is measured at the level of the 12 month ECL.

Stage 2 — Significant increase in credit risk

The following deterioration of credit rating is considered significant and leads to a reclassification of a FGC to Stage 2:






—


For guarantees with a credit rating between AAA (Aa1) and BB- (Ba3) on the S&P/Fitch (Moody’s) rating scale or an equivalent external or internal rating at initial recognition, a rating deterioration is considered significant if the difference between the initial rating and the one at the reporting date is equal or superior to 3 notches for guarantees relating to a single debt instrument and 2 notches for guarantees relating to a portfolio of debt;










—


For guarantees with a credit rating between B+ (B1) or B (B2) at initial recognition, a rating deterioration is considered significant if the difference between the initial rating and the one at the reporting date is equal or superior to 2 notches for guarantees relating to a single debt instrument and 1 notch for guarantees relating to a portfolio of debt; and










—


For guarantees with a credit rating between B- (B3) or lower at initial recognition, a rating deterioration is considered significant if the difference between the initial rating and the one at the reporting date is equal or superior to 1 notch (single debt and portfolio).




If information on the credit rating is not available but an estimation of the expected annual claims has been made at initial recogniton, the actual level of claims compared to the initial planning is also considered a reasonable risk indicator for the assessment of SICR.
In addition to the above criteria, the EU may apply a qualitative assessment of the SICR, based on additional, reasonable and justified, information available.
FGC originated before the transtion to the revised EAR 11 (i.e. before 1 January 2021) for which no information on the credit risk at initial recognition is available without undue cost and effort are classified to Stage 2.
For FGC in Stage 2, the impairment allowance is measured at the level of life-time expected credit losses.
Classification to Stage 3 and POCI does not apply to FGC.
In 2022, EUR 2,8 billion of EFSI guarantees were moved from Stage 2 to Stage 1 as the average credit risk of the guaranteed portfolio (also considering the impact of the merge with the InvestEU debt portfolios — see note 4.1.1) has decreased. This led to a remeasurement effect and a reduction of ECL for EFSI guarantee, as the impairment allowance is measured at 12-month ECL at the end of 2022 compared to life-time ECL at the end of 2021. Out of the EUR 1,1 billion remeasurement leading to a reduced ECL on guarantees in Stage 2, EUR 0,6 billion relates to the EFSI SME window. Out of the outstanding ECL for guarantees in Stage 2 of EUR 3,1 billion as at 31 December 2022, EUR 2,4 billion relates to the ELM guarantees (see note 4.1.1) . This includes EUR 1,1 billion life-time ECL for the EIB exposure in Ukraine (EUR 4,1 billion, of which EUR 0,5 billion loans are not yet disbursed) guaranteed by the EU.

Budgetary guarantees

The Union is mainly exposed to credit risk through the operations which it guarantees. When the credit quality of the underlying operations deteriorates, default events become more likely and hence also calls on EU guarantees.
In order to monitor and manage this risk, the Commission relies on a Credit Risk Model to assess potential losses, using, inter alia, the inputs provided by the Implementing Partners. The output of these models is interpreted and combined with expert judgment to derive a risk assessment that is coherent with the substance of the transaction and the relevant economic circumstances.
6.6.   LIQUIDITY RISK


Maturity analysis of non-derivative financial liabilities by remaining contractual maturity











(EUR million)




Undiscounted contractual cash-flows


Carrying amount




 


< 1 year


1–5 years


> 5 years


Total





Borrowings




(23 204 )




(80 495 )




(280 075 )




(383 774 )




(344 303 )






Payables




(55 341 )



—


—



(55 341 )




(55 341 )






Other




(318)




(711)




(771)




(1 800 )




(1 517 )






Total at 31.12.2022




(78 862 )




(81 206 )




(280 846 )




(440 914 )




(401 161 )






Borrowings




(23 769 )




(45 030 )




(180 660 )




(249 459 )




(236 720 )






Payables




(46 372 )



—


—



(46 372 )




(46 372 )






Other




(218)




(830)




(890)




(1 938 )




(1 605 )






Total at 31.12.2021




(70 358 )




(45 860 )




(181 550 )




(297 769 )




(284 697 )






Maturity analysis of derivative financial liabilities by remaining contractual maturity











(EUR million)




 


Undiscounted contractual cash-flows


Carrying amount




 


< 1 year


1–5 years


> 5 years


Total





Derivative pay leg




(504)




(8)



—



(512)



 





Derivative receive leg




487



—


—



487



 





Net cash flows at 31.12.2022




(17)




(8)



—



(25)




(20)






Derivative pay leg




(646)




(5)



—



(651)



 





Derivative receive leg




648



—


—



648



 





Net cash flows at 31.12.2021




2




(5)



—



(3)




(3)






Maturity analysis of financial guarantee contracts issued by earliest period in which the guarantee could be called











(EUR million)




 


Maximum amount of guarantee


Carrying amount




< 1 year


1–5 years


> 5 years


Total





FGCs at 31.12.2022




(65 109 )




(13 332 )




(4 902 )




(83 343 )




(6 456 )






FGCs at 31.12.2021




(55 381 )




(878)




(1)




(56 259 )




(7 794 )






Borrowing activities for NGEU and financial assistance

The first recourse for the repayment of borrowings for financial assistance is the timely collection of the related financial assistance and NGEU loan repayments. However, there are additional safeguards that could be applied in case of payment defaults or payment delays of borrowers.
For MFA and Euratom loans to third countries, the Guarantee Fund for external actions compartment of the CPF provides for a liquidity reserve. Therefore, the available assets of this fund would be used first in order to repay the related borrowings (but only after a first recourse to third party guarantors for Euratom — see note 6.4). If at any moment the available assets should prove insufficient to cover the actual losses, the Commission will activate measures to provide for additional resources (e.g. recourse to temporary use of Commission’s treasury liquidity, recourse to temporary transfers and/or additional expenditure from the EU budget). Loans provided to Ukraine under the exceptional MFA programme (EUR 6 billion disbursed in 2022) are covered not only by their compartment in CPF, but also by additional Member States guarantees, in case the amount in the CPF would not be sufficient (see note 2.4.1.1).
For NGEU, the Commission may also apply active cash management and short-term borrowing in order to service EU debts.
For all financial assistance borrowings as well as for the NGEU borrowings, the Commission may call resources up to the available own resources margin in order to service the EU debts. The own resources legislation fixes the ceiling for own resources to cover annual appropriations for payment at 1,40 % of Member States’ GNI, plus an additional temporary increase of 0,6 percentage points for NGEU. The 2022 budget included a total of own resources to finance the expenditure of 1,01 % of GNI. This means that at 31 December 2022 there existed an available margin of 0,99 % to cover its liabilities. To this end, the EU is entitled to call upon Member States to ensure compliance with the EU’s legal obligation towards its lenders.
Finally, loans provided to Member States under the SURE instrument are underpinned by a system of voluntary guarantees from Member States, amounting to 25 % of the maximum ceiling available for the related financial assistance. Before calling on guarantees provided by the Member States, the Commission is expected to examine the scope for drawing on the margin available under the own resources ceiling for payments appropriation to the extent that it is deemed sustainable by the Commission, having regard, inter alia, to the total contingent liabilities of the Union and the sustainability of the general budget of the Union. Such examination shall not affect the irrevocable, unconditional and on-demand nature of the guarantees provided.

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 Regulation (EU, Euratom) No 609/2014 (on the methods and procedure for making available own resources, amended by Regulation (EU, Euratom) 2016/804), 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. Own resources or additional funding can be called up in advance from Member States if needed, up to certain limits and under certain conditions provisioned under Regulation (EU, Euratom) No 609/2014 amended by Regulation (EU, Euratom) 2016/804. Operational needs and overall budgetary restrictions in recent years have resulted in the need for increased monitoring of the rhythm of payments during 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. 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 56 %.

Budgetary guarantees

The maturity analysis for financial guarantees is presented using the prudent approach, under which the maximum amount of the guarantee given is allocated to the earliest period in which the guarantee could be called. Given that most of the EU guarantees are on first demand, a significant amount is allocated to the first time band. However, the probability that the EU will be called under all guarantees for the entire amount in the first period is remote. Moreover, the amount that the EU expects to lose is often much lower then the guarantee ceilling, therefore the amount of the liquidity risk needs to be seen in the conjunction with the carrying amount of the guarantee liabilities.
A key objective of the risk management framework of contingent liabilities is to ensure that the EU budget can, at any time, honour its obligations without disrupting the normal implementation of the budget. This also entails the mitigation of the liquidity risk related to budgetary guarantees, i.e. the risk that the Union would have insufficient funds to fulfil in a timely manner all its guarantee-related payment obligations (which might then lead to for example the crowding out of other expenses and the postponement of payments to the following budgetary years).
In this respect, each budgetary guarantee is backed by sufficient provisioning paid into the CPF so as to ensure there is always enough liquidity to pay guarantee calls in a timely manner.
The EU monitors on a regular basis the adequacy of the provisioning rate of each budgetary guarantee programme and reports (43) every year on its estimate as to whether those amounts are sufficient to cover the risk for next 5 years with a defined level of certainty.
Furthermore, there are additional safeguard procedures in place (temporary transfers between CPF compartments and the use of central treasury liquidity) to ensure sufficient liquidity is available.

Common Provisioning Fund

The CPF 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 18 %.
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 or margin requirements, as the current hedging counterparty accepts to operate with the Commission without any requirements for collateral or margin calls.
6.7.   OTHER PRICE RISK

As at 31 December 2022, the EU is exposed to other price risks (equity risk) arising from non-quoted equity investments (such as venture capital and other investment funds), money market funds (such as the EIB Unitary Fund) and investments in pooled portfolios (see note 2.4.2.1), as well as through guarantees covering non-quoted equity and quasi equity investments, treated as derivatives at fair value through surplus or deficit (see note 2.4.2.2).
Equity price risk refers to the risk that the fair values of equity investments change as the result of fluctuations in the levels of equity prices and/or the value of the guaranteed equity investments. The effect on surplus or deficit of a 10 % value increase or decrease of the above-mentioned instruments would be as follows:







(EUR million)




 


10 %


(10) %





Equity investments




253




(253)






MMFs, ETFs and investments in pooled portfolios




290




(290)






Guarantees on equity
 (44)




469




(469)






Total at 31.12.2022




1 012 




(1 012 )






Equity investments




238




(238)






MMFs, ETFs and investments in pooled portfolios
 (44)




251




(251)






Guarantees on equity
 (44)




415




(415)






Total at 31.12.2021




905




(905)





The EU invests in, or guarantees, unquoted assets whose values are not publicly available. Most of these financial instruments are implemented by the entrusted entities, who are experts in the industry and they assess and monitor those assets on a regular basis.
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 personnel 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.

KEY MANAGEMENT FINANCIAL ENTITLEMENTS











(EUR)





Entitlement (per employee)




Category 1




Category 2




Category 3




Category 4




Category 5






Basic salary (per month)




31 251,88 




28 307,86  — 29 440,18 




22 646,29  — 25 477,07 




24 458,00  — 26 043,24 




14 399,72  — 22 646,29 





 


 


 


 


 


 





Residential/Expatriation allowance




15 %




15 %




15 %




15 %




0–4 %-16 %





 


 


 


 


 


 





Family allowances:



 


 


 


 


 




Household (% salary)



2 % + 210,21 




2 % + 210,21 




2 % + 210,21 




2 % + 210,21 




2 % + 210,21 





Dependent child



459,32 




459,32 




459,32 




459,32 




459,32 





Pre-school



112,21 




112,21 




112,21 




112,21 




112,21 





Education, or



311,65 




311,65 




311,65 




311,65 




311,65 





Education outside place of work



623,30 




623,30 




623,30 




623,30 




623,30 






Presiding judges allowance




N/A




N/A




715,05 




N/A




N/A





 


 


 


 


 


 





Representation allowance




1 693,58 




1 088,45 




715,05 




N/A




N/A





 


 


 


 


 


 





Annual travel costs




N/A




N/A




N/A




N/A




Reimbursed





 


 


 


 


 


 





Transfers to Member State:



 


 


 


 


 




Education allowance (8)




Yes




Yes




Yes




Yes




Yes





% of salary (8)




5 %




5 %




5 %




5 %




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
(Cat. 1–4: two months of basic salary)



62 503,76 




56 615,72  — 58 880,36 




45 292,58  — 50 954,15 




48 915,99  — 52 086,47 




Reimbursed





Family travel expenses



Reimbursed




Reimbursed




Reimbursed




Reimbursed




Reimbursed





Moving expenses



Reimbursed




Reimbursed




Reimbursed




Reimbursed




Reimbursed






Leaving office:



 


 


 


 


 




Resettlement expenses
(Cat. 1–4: one month of basic salary)



31 251,88 




28 307,86  — 29 440,18 




22 646,29  — 25 477,07 




24 458,00  — 26 043,24 




Reimbursed





Family travel expenses



Reimbursed




Reimbursed




Reimbursed




Reimbursed




Reimbursed





Moving expenses



Reimbursed




Reimbursed




Reimbursed




Reimbursed




Reimbursed





Transition (% salary) (9)




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:



 


 


 


 


 




Community tax



8 % — 45 %




8 % — 45 %




8 % — 45 %




8 % — 45 %




8 % — 45 %






Sickness insurance (% salary)




1,7  %




1,7  %




1,7  %




1,7  %




1,7  %





Special levy on salary



7 %




7 %




7 %




7 %




6-7 %





Pension deduction



N/A




N/A




N/A




N/A




10,1  %






Number of persons at year-end





3






8






93






27






112






8.   EVENTS AFTER THE BALANCE SHEET DATE
At the date of signature of these accounts no material issues had come to the attention of, or were reported to, the Accounting Officer of the Commission that would require separate disclosure under this section. The accounts and related notes were prepared using the most recently available information and this is reflected in the information presented.
9.   SCOPE OF CONSOLIDATION
A.   CONTROLLED ENTITIES (54)

1.   Institutions and consultative bodies (11)


European Parliament


European Council


European Commission


European Court of Auditors


Court of Justice of the European Union


European External Action Service


European Data Protection Supervisor


European Economic and Social Committee


European Ombudsman


European Committee of the Regions


Council of the European Union

2.   EU Agencies (41)

2.1.   
Executive Agencies (6)



European Education and Culture Executive Agency (EACEA)


European Health and Digital Executive Agency (HaDEA)


European Research Executive Agency (REA)


European Innovation Council and SMEs Executive Agency (EISMEA)


European Research Council Executive Agency (ERCEA)


European Climate, Infrastructure and Environment Executive Agency (CINEA)

2.2.   
Decentralised Agencies (35)



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 Union Agency for Asylum (EUAA)


European Union Agency for Cybersecurity (ENISA)


European Union Agency for Law Enforcement Training (CEPOL)


European Union Agency for the Space Programme (EUSPA)


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 Border and Coast Guard Agency (FRONTEX)


European Labour Authority (ELA)


European Food Safety Authority (EFSA)


European Union Agency for Railways (ERA)


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)


European Training Foundation (ETF)


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 (CdT)


European Joint Undertaking for ITER and the Development of Fusion Energy (Fusion for Energy)


European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (eu-LISA)


European Public Prosecutor's Office (EPPO)

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)


MINOR ENTITIES

The entities listed below have not been consolidated using the equity method in the 2022 EU consolidated financial statements on the basis of immateriality:

MINOR ENTITES (8)


Circular Bio-based Europe Joint Undertaking (CBE JU)


Clean Aviation Joint Undertaking (CAJU)


Clean Hydrogen Joint Undertaking (Clean H2 JU)


Europe’s Rail Joint Undertaking (EU-RAIL JU)


Innovative Health Initiative Joint Undertaking (IHI JU)


Key Digital Technologies Joint Undertaking (KDT JU)


Single European Sky ATM Research 3 Joint Undertaking (SESAR 3 JU)


European High Performance Computing Joint Undertaking (EuroHPC)

The annual accounts of the above entities are publicly available on their respective websites.
BUDGETARY IMPLEMENTATION REPORTS AND EXPLANATORY NOTES (45)


CONTENTS








1.

EU BUDGET RESULT
142










2.

STATEMENTS OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
143










3.

NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS
147










3.1.

THE EU BUDGET FRAMEWORK
147










3.2.

MULTIANNUAL FINANCIAL FRAMEWORK 2021–2027
147










3.3.

MFF DETAILED HEADINGS (PROGRAMMES)
149










3.4.

NextGenerationEU
150










3.5.

ANNUAL BUDGET
150










3.6.

REVENUE
151










3.7.

CALCULATION OF THE BUDGET RESULT
152










3.8.

RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT
153










4.

IMPLEMENTATION OF THE 2022 EU BUDGET
155










5.

IMPLEMENTATION OF EU BUDGET REVENUE
156










5.1.

SUMMARY OF THE IMPLEMENTATION OF EU BUDGET REVENUE
156










6.

IMPLEMENTATION OF EU BUDGET EXPENDITURE
157










6.1.

MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT APPROPRIATIONS
157










6.2.

MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS
158










6.3.

MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS
159










6.4.

MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL)
160










6.5.

MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN
161










6.6.

MFF: OUTSTANDING COMMITMENTS BY APPROPRIATIONS TYPE
162










6.7.

DETAILED MFF: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS
163










6.8.

DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS
173










6.9.

DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS
183










6.10.

DETAILED MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL)
193










6.11.

DETAILED MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN
202










6.12.

DETAILED MFF: OUTSTANDING COMMITMENTS BY APPROPRIATIONS TYPE
208










7.

IMPLEMENTATION OF THE BUDGET BY INSTITUTION
217










7.1.

IMPLEMENTATION OF BUDGET REVENUE
217










7.2.

IMPLEMENTATION OF COMMITMENT APPROPRIATIONS
219










7.3.

IMPLEMENTATION OF PAYMENT APPROPRIATIONS
220










8.

IMPLEMENTATION OF THE AGENCIES’ BUDGETS
221










8.1.

BUDGET REVENUE
221










8.2.

COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY
223



1.   EU BUDGET RESULT








(EUR million)




Note


2022


2021




a


Revenue for the financial year


245 265 


239 596 




b


Payments against current year appropriations


(239 157 )


(226 175 )




c


Payment appropriations carried over to year N+1


(2 452 )


(4 244 )




d


Cancellation of unused appropriations carried over from year N-1


80


265




e


Evolution of assigned revenue (B)-(A)


(1 121 )


(6 338 )




 



Unused appropriations at the end of current year (A)




15 152 




14 032 





 



Unused appropriations at the end of previous year (B)




14 032 




7 694 





f


Exchange rate differences for the year


(97)


126




 



Budget result




2 519 




3 230 





The budget result of the EU is returned to the Member States in 2023 through deduction of their amounts due. It is calculated in accordance with Article 1(1) of Council Regulation (EU, Euratom) No 608/2014 (46) laying down implementing measures for the system of own resources. More information can be found under Section 3.7 Calculation of the budget result.






a.


Revenue for the financial year: Table 5.1 ‘Summary of the implementation of EU Budget Revenue’, column 8 ‘Total Revenue’.










b.


Payments against current year appropriations: Table 6.3 ‘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: Table 6.3 ‘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 the current year’s ‘Payments made from carryovers’ as in column 3 of Table 6.3 ‘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 6.3 ‘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.




2.   STATEMENTS OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

Budget revenue











(EUR million)




 


Initial budget adopted


Final adopted budget


Entitlements established


Revenue




1


Own resources


157 701 


153 928 


157 320 


155 758 




 



11 — Sugar levies




0




0




(1)




(1)





 



12 — Customs duties




17 913 




23 765 




27 419 




25 857 





 



13 — VAT




19 071 




19 714 




19 666 




19 666 





 



14 — GNI




114 719 




104 088 




103 880 




103 880 





 



16 — Reduction of GNI-based contribution granted to certain Member States




—




—




19




19





 



17 — Plastic packaging waste




5 997 




6 361 




6 337 




6 337 





2


Surpluses, balances and adjustments


0


2 980 


3 233 


3 227 




3


Administrative revenue


1 791 


1 791 


2 656 


2 607 




4


Financial revenue, default interest and fines


115


454


16 635 


596




5


Budgetary guarantees, borrowing-and-lending operations


0


0


62 203 


62 203 




6


Revenue, contributions and refunds related to union policies


10 997 


10 884 


26 689 


20 874 





Total




170 603 




170 038 




268 736 




245 265 






of which Next Generation EU (NGEU)



—


—



62 409 




62 409 






Budget expenditure: commitments by multiannual financial framework (MFF) heading











(EUR million)




MFF Heading


Initial adopted budget


Final adopted budget


Total appropriations available


Commitments made




1


Single Market, Innovation and Digital


21 775 


21 845 


33 071 


27 330 




2


Cohesion, Resilience and Values


56 039 


67 805 


325 372 


218 907 




 



2a. Economic, social and territorial cohesion




49 709 




61 314 




76 068 




74 632 





 



2b. Resilience and values




6 330 




6 491 




249 303 




144 275 





3


Natural Resources and Environment


56 235 


56 681 


75 200 


68 142 




 



of which: Market related expenditure and direct payments




40 369 




40 369 




41 687 




41 182 





4


Migration and Border Management


3 091 


3 410 


3 520 


3 446 




5


Security and Defence


1 785 


1 813 


1 851 


1 840 




6


Neighbourhood and the World


17 170 


17 670 


20 364 


20 153 




7


European Public Administration


10 620 


10 783 


12 075 


11 664 




 



of which: Administrative expenditure of the institutions




4 421 




4 485 




5 041 




4 850 





O


Outside MFF


—


—


6 692 


3 006 




S


Solidarity mechanisms within and outside the Union (Special instruments)


2 799 


2 219 


3 531 


2 602 





Total




169 516 




182 227 




481 676 




357 091 






of which Next Generation EU (NGEU)




—




—




277 772 




162 702 






Budget expenditure: payments by multiannual financial framework (MFF) heading











(EUR million)




MFF Heading


Initial adopted budget


Final adopted budget


Total appropriations available


Payments made




1


Single Market, Innovation and Digital


21 474 


20 606 


29 379 


25 174 




2


Cohesion, Resilience and Values


62 053 


63 140 


129 654 


126 570 




 









2a.



Economic, social and territorial cohesion







56 351 




57 610 




75 546 




73 015 





 









2b.



Resilience and values







5 702 




5 531 




54 108 




53 555 





3


Natural Resources and Environment


56 602 


55 782 


59 271 


58 276 




 



of which: Market related expenditure and direct payments




40 393 




40 356 




41 674 




41 152 





4


Migration and Border Management


3 078 


3 373 


3 642 


3 368 




5


Security and Defence


1 238 


1 159 


1 192 


1 154 




6


Neighbourhood and the World


12 916 


13 156 


14 902 


14 521 




7


European Public Administration


10 620 


10 783 


13 149 


11 583 




 



of which: Administrative expenditure of the institutions




4 421 




4 485 




5 724 




4 801 





O


Outside MFF


—


—


6 830 


72




S


Solidarity mechanisms within and outside the Union (Special instruments)


2 623 


2 040 


3 351 


2 602 





Total




170 603 




170 038 




261 370 




243 321 






of which Next Generation EU (NGEU)




—




—




64 292 




63 456 






Budget expenditure: outstanding commitments by multiannual financial (MFF) heading











(EUR million)




MFF Heading


Outstanding commitments carried-over from 2021


Liquidation of outstanding commitm. carried from 2021


New outstanding commitments from 2022


Total outstanding commitments




 


1


2


3


4=1+2+3




1


Single Market, Innovation and Digital


48 717 


(19 897 )


21 309 


50 130 




2


Cohesion, Resilience and Values


209 033 


(89 435 )


181 482 


301 081 




 









2a.



Economic, social and territorial cohesion







152 840 




(66 138 )




67 599 




154 302 





 









2b.



Resilience and values







56 193 




(23 297 )




113 883 




146 779 





3


Natural Resources and Environment


43 691 


(16 188 )


25 957 


53 459 




 



of which: Market related expenditure and direct payments




334




(124)




147




357





4


Migration and Border Management


3 980 


(1 515 )


1 543 


4 008 




5


Security and Defence


2 397 


(790)


1 455 


3 061 




6


Neighbourhood and the World


32 535 


(9 906 )


14 333 


36 962 




7


European Public Administration


1 076 


(1 076 )


1 048 


1 048 




 



of which: Administrative expenditure of the institutions




684




(684)




654




654





O


Outside MFF


147


(20)


2 944 


3 071 




S


Solidarity mechanisms within and outside the Union (Special instruments)


—


—


0


0





Total




341 575 




(138 826 )




250 071 




452 821 






of which Next Generation EU (NGEU)




89 907 




(34 847 )




134 072 




189 132 






of which excluding Next Generation EU (NGEU)




251 668 




(103 979 )




116 000 




263 689 





3.   NOTES TO THE BUDGETARY IMPLEMENTATION REPORTS
3.1.   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 MFF in line with the legislative acts concerning multiannual programmes adopted under that framework.
3.2.   MULTIANNUAL FINANCIAL FRAMEWORK 2021–2027














(EUR millionin current prices)




 


2021


2022


2023


2024


2025


2026


2027


Total










1.


Single Market, Innovation and Digital






20 919 


21 278 


21 727 


20 984 


21 272 


21 847 


22 077 


150 704 










2.


Cohesion, Resilience and Values






6 364 


67 806 


70 137 


72 367 


74 993 


66 536 


70 283 


428 486 










 









2a.



Economic, social and territorial cohesion











1 769 




61 345 




62 939 




64 683 




66 479 




56 725 




58 639 




372 579 











 









2b.



Resilience and Values











4 595 




6 461 




7 198 




7 684 




8 514 




9 811 




11 644 




55 907 











3.


Natural Resources and Environment






56 841 


56 965 


57 295 


57 449 


57 558 


57 332 


57 557 


400 997 










 



of which: Market related expenditure and direct payments








40 368 




40 639 




40 693 




41 649 




41 782 




41 913 




42 047 




289 091 











4.


Migration and Border Management






1 791 


3 360 


3 814 


3 866 


4 387 


4 315 


4 465 


25 998 










5.


Security and Defence






1 696 


1 896 


1 946 


2 004 


2 243 


2 435 


2 705 


14 925 










6.


Neighbourhood and the World






16 247 


16 802 


16 329 


15 830 


15 304 


14 754 


15 331 


110 597 










7.


European Public Administration






10 635 


11 058 


11 419 


11 773 


12 124 


12 506 


12 959 


82 474 










 



of which: Administrative expenditure of the institutions








8 216 




8 528 




8 772 




9 006 




9 219 




9 464 




9 786 




62 991 






Commitment appropriations




114 493 




179 765 




182 667 




184 273 




187 881 




179 725 




185 377 




1 214 181 






Total payment appropriations




163 496 




170 558 




168 575 




168 853 




172 230 




175 674 




179 187 




1 198 573 





Council Regulation (EU, Euratom) 2020/2093 (47) laying down the 2021–2027 MFF was adopted on 17 December 2020. The above table shows the MFF ceilings at current prices (48), in accordance with the fixed annual deflator of 2 % set out in Article 4(2) of the MFF Regulation. As stipulated in the Council Regulation (EU, Euratom) 2020/2093 laying down the 2021–2027 MFF, for commitment appropriations the amounts are split per Heading; for payment appropriations the ceilings only apply at total level. 2022 was the second financial year covered by the MFF 2021–2027 .

2022 events

On 7 June 2021, the Commission adopted a Communication on the technical adjustment of the MFF for the year 2022 (49). The programme specific adjustment (according to MFF Regulation Art. 5(2)) was implemented with the additional allocations for specific programmes referred to in Annex II of the MFF Regulation and the resulting upwards adjustments of the ceilings for commitment and payment appropriations. The revenue from fines imposed under Council Regulations (EC) No 1/2003 (50) and (EC) No 139/2004 (51) entered in the budget of 2020 were below the minimum threshold of EUR 1,5 billion in 2018 prices set in the article. Therefore, the minimum threshold provided the total volume of the adjustment for 2022 in 2018 prices. The adjustment in current prices amounted to EUR 1,624 billion. The main impacts in 2022 were under Heading 1 (EUR 0,59 billion), Heading 2(b) (EUR 0,89 billion) and Heading 4 (EUR 0,15 billion).
The reprogramming of unused 2021 commitment appropriations for programmes in shared management in accordance with Article 7 of the MFF Regulation was implemented by a specific adjustment of the MFF provided in the Commission Communication of 28 January 2022
                      (52) with an adjustment of the MFF ceilings and a related amending budget for 2022. The allocations not used in 2021 and not carried over were transfered in equal proportions to each of the years 2022 to 2025. The total transfer from 2021 amounted EUR 49 billion coming from main impacts in 2022 were under Heading 2(a) (EUR 46,4 billion), Heading 3 (EUR 1,8 billion), Heading 4 (EUR 0,7 billion) and Heading 5 (EUR 0,1 billion). The main impacts in 2022 were under Heading 2(a) (EUR 11,6 billion), Heading 3 (EUR 0,4 billion), Heading 4 (EUR 0,2 billion) and Heading 5 (EUR 0,02 billion).
The overall ceiling for commitment appropriations for 2022 was EUR 179 765 million, whilst the corresponding ceiling for payment appropriations was EUR 170 558 million.
Pursuant to Article 312(3) TFEU, the MFF determines the amounts of the annual ceilings for commitment appropriations by category of expenditure (‘headings’) and of the annual ceilings for payment appropriations. MFF headings correspond to the Union’s major sectors of activity. An explanation of the various headings of the 2021–2027 MFF is given below.
The MFF 2021–2027 amounts to EUR 1 211 billion (EUR 1 074 billion in 2018 prices), including the European Development Fund (EDF). In addition, NextGenerationEU provides an additional amount of EUR 806,9 billion (EUR 750 billion in 2018 prices) up to 2023 in commitments and 2026 in payments.
For the annual budget procedure, the budget nomenclature is further structured by policy ‘clusters’, providing further clarity on how individual spending programmes contribute to the Union’s policy goals.

Heading 1 — Single Market, Innovation and Digital

This heading includes key EU programmes supporting the areas of research and innovation, digital transformation, strategic infrastructure, strengthening the single market and strategic space projects. Programmes under this heading include Horizon Europe, the InvestEU Fund, Connecting Europe Facility, the Single market programme and the European space programme.
Programmes receiving contributions from NGEU (external assigned revenue) in this heading: Horizon Europe and InvestEU Fund.

Heading 2 — Sustainable growth: natural resources

This heading is divided in two sub-headings: Economic, social and territorial cohesion (2a), and Resilience and values (2b).
Spending under this heading aims at strengthening the resilience and cohesion between the EU Member States. The funding helps reduce disparities in and between EU regions, and within and across Member States, and promotes sustainable territorial development (European Regional Development Fund, Cohesion Fund, European Social Fund Plus). It also supports the Union’s solidarity and cooperation in preparedness and response to disasters (Union Civil Protection Mechanism and rescEU). In addition, programmes under this heading seek to make the EU more resilient to present and future challenges by investing in the green and digital transition, young people (Erasmus), health (EU4Health) and action to protect EU values (Justice, Rights and Values) and promote cultural diversity (Creative Europe).
This heading includes the RRF, powered by the vast majority of the funding provided by NGEU over the period 2021-2023. Other programmes receiving contributions from NGEU (external assigned revenue) in this heading: REACT-EU, Union Civil Protection Mechanism (rescEU). For a more detailed overview of the RRF activities, consult sections on the NGEU 2.2 and 2.3 of the Financial Highlights of the Year.

Heading 3 — Natural Resources and Environment

Expenditure under this heading invests in sustainable agriculture (common agricultural policy) and fisheries and maritime policy (European Maritime, Fisheries and Aquaculture Fund), as well programmes dedicated to environmental protection and climate action (LIFE programme, Just Transition Fund).
Programmes receiving contributions from NGEU (external assigned revenue) in this heading: rural development, Just Transition Fund.

Heading 4 — Migration and Border Management

The programmes (Asylum, Migration and Integration Fund, Integrated Border Management Fund) and the decentralised agencies (such as the European Border and Coast Guard Agency (Frontex) and the European Union Agency for Asylum) financed under this heading seek to tackle the challenges linked to migration and the management of the EU’s external borders and to the safeguarding of the asylum system within the EU.

Heading 5 — Security and Defence

This heading reflects the increased need for cooperation at Union level to address security threats and increase its strategic autonomy. It includes programmes whose role is to improve the security and safety of Europe’s citizens (Internal Security Fund), to strengthen Europe’s defence capacities (European Defence Fund), and to provide the tools needed to respond to internal and external security challenges.

Heading 6 — Neighbourhood and the World

Programmes under this heading reinforce the EU socio-economic impact in its neighbourhood, in developing countries and the rest of the world. The new NDICI- Global Europe instrument merges several former EU external financing instruments, including cooperation with African, Caribbean and Pacific (ACP) countries previously financed by the European Development Fund. The heading also includes assistance for countries preparing for accession to the EU (Pre-accession assistance) and the Union’s Humanitarian Aid programme.

Heading 7 — European Public Administration

This heading covers administrative expenditure for all institutions, pensions and the European Schools.

S — Special instruments

Flexibility mechanisms in the EU budget enable the EU to mobilise the necessary funds to react to unforeseen events such as crisis, natural disasters and emergency situations. Their scope, financial allocation and operating modalities are provided for in the MFF Regulation and the Inter institutional Agreement. They ensure that budgetary resources can respond to evolving priorities, so that every euro is used where it is most needed.
In the annual budgetary nomenclature and implementation, they are identified as special instruments (‘S’), as they can be mobilised over and above the MFF expenditure ceilings, both for commitment and payment appropriations.
3.3.   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 6.7 — 6.12 below).
3.4.   NextGenerationEU

With a budget of EUR 421,1 billion for the non-repayable support (grants), NGEU has a major impact on the total EU annual budgets 2021 through to 2026 and on their implementation. In 2021, this amount has been fully inscribed as assigned revenue appropriations. All commitments for the non-repayable support will be entered by the 31 December 2023 and will be honoured by payments by 31 December 2026, in accordance with the Articles 3(4) and 3(9) of the EURI Regulation (53).
For a comprehensive overview of the NGEU activities, consult Sections 2.2 and 2.3 of the Financial Highlights of the Year.
3.5.   ANNUAL BUDGET

The budget adoption procedure is laid down in Article 314 of the Treaty on the Functioning of the EU. The following diagram presents the deadlines as well as the steps of the budget adoption.





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; these are assigned directly to the corresponding expenditure budget lines and constitute the third pillar of funding.








All funding types together form the available appropriations.
3.6.   REVENUE

3.6.1.   Own resources revenue

The vast majority of revenue comes from own resources, which consist of the following categories:






(1)


Traditional own resources (TOR): accounted for around 16 % of own resources revenue in 2022.










(2)


Value added tax (VAT) based resource: accounted for around 13 % of own resources revenue in 2022.










(3)


Resource based on plastic packaging waste that is not recycled: accounted for around 4 % of own resources revenue in 2022.










(4)


Gross national income (GNI) based resource: accounted for around 67 % of own resources revenue in 2022.




Decision (EU, Euratom) 2020/2053 (Own Resources Decision 2020) specifies the categories of own resources and lays down the methods for their calculation. This decision entered into force on 1 June 2021 and was applied retroactively from 1 January 2021.
The Own Resources Decision 2020 stipulates that the total amount of own resources allocated to the Union to cover annual appropriations for payments shall not exceed 1,40 % of the sum of all the Member States’ GNIs. In addition, the decision empowers the Commission on an exceptional basis to borrow temporarily up to EUR 750 billion in 2018 prices on the capital markets on behalf of the Union to address the consequences of the COVID-19 pandemic through the recovery instrument NextGenerationEU. The own resources ceiling for appropriations for payments will be increased temporarily by 0,6 percentage points to cover all liabilities resulting from this borrowing.
As from 2021, ‘other revenue’ of the EU budget includes the financial contributions from the United Kingdom resulting from the financial settlement under the UK Withdrawal agreement.
3.6.2.   Traditional own resources (TOR)

TOR consist of customs duties levied on imports from third countries, which are collected by Member States on behalf of the EU. However, Member States retain 25 % to cover their collection costs. All established TOR amounts must be entered in one of the following accounts kept by the competent authorities:






—


In the ordinary accounts provided for in Article 6(3) of Regulation (EU, Euratom) No 609/2014: all amounts recovered or guaranteed.










—


In the separate accounts provided for in the same Article: all amounts not yet recovered and/or not guaranteed; amounts guaranteed but challenged may also be entered in this account.




Member States must book TOR to the Commission’s account via their treasury or national central bank no later than the first working day after the 19th day of the second month following the month in which the entitlement was established (or recovered in the case of the separate account).
3.6.3.   Value added tax (VAT)

The VAT own resource is calculated based on Member States’ VAT bases, which are harmonised for this purpose in accordance with EU rules. A uniform call rate of 0,30 % applies to each Member State’s total amount of VAT receipts collected for all taxable supplies divided by the weighted average VAT rate. The VAT base is capped at 50 % of each Member State’s GNI.
3.6.4.   Non-recycled plastic packaging waste

A uniform call rate of EUR 0,80 per kilogram applies to the weight of plastic packaging waste generated in each Member State that is not recycled. The plastic packaging waste that is not recycled in a given year is calculated as the difference between the plastic packaging waste generated and the plastic packaging waste recycled in that year in a Member State. Bulgaria, Czechia, Estonia, Greece, Spain, Croatia, Italy, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Portugal, Romania, Slovenia and Slovakia are entitled to specific annual lump sum reductions in their respective plastics own resource contributions.
3.6.5.   Gross national income (GNI)

The resource based on gross national income (GNI) is used to finance that part of the budget that is not covered by other revenue sources. A uniform call rate is levied on each Member State’s GNI, which is established in accordance with EU rules.
3.6.6.   Gross reduction

For the period 2021–2027 , the following Member States benefit from a gross reduction in their annual GNI-based contributions; EUR 565 million for Austria, EUR 377 million for Denmark, EUR 3 671 million for Germany, EUR 1 921 million for the Netherlands and EUR 1 069 million for Sweden. These gross reductions are measured in 2020 prices and financed by all Member States.
3.6.7.   Adjustments to own resources of previous financial years

VAT and GNI-based resources are determined on the basis of forecasts of the relevant bases made when the draft budget is prepared. These forecasts are subsequently revised and updated during the budget year concerned, by means of an amending budget. Differences between the amounts due by the Member States with reference to the actual bases, and the amounts 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 March of the third year following the budget year concerned. Corrections may still be made to the actual VAT and GNI bases during the subsequent four years, unless a reservation is issued. These reservations represent potential claims on the Member States for uncertain amounts, as their financial impact cannot be accurately estimated. 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.The forecast of the plastics-based own resource is adjusted in a similar way. However, the differences between the amounts due by the Member States according to their annual statements with the outturn data, and the amounts 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 third year following the budget year concerned. Corrections may still be made to the actual bases during the subsequent five years, unless a reservation is issued.
3.7.   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 (EU, Euratom) No 608/2014 laying down implementing measures for the system of own resources, this result represents the difference between:






—


total revenue received for the financial year; and










—


total payments made against current year's appropriations plus the total amount of that year's appropriations carried over to the following year.




The following are added to or deducted from the resulting figure:






—


the net balance of cancellations of payment appropriations carried over from previous years and any payments which, because of fluctuations in the euro rate, exceed non-differentiated appropriations carried over from the previous year;










—


the evolution of assigned revenue; and










—


the net exchange rate gains or losses recorded during the year.



Appropriations carried over from the previous financial year in respect of contributions by and work for third parties, which by definition never lapse, are included as additional appropriations for the financial year. This explains the difference between carryovers from the previous year in the year N budget implementation reports and those carried over to the following year in the year N-1 budget implementation reports. Commitment 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 comprises the cancellations of appropriations carried over automatically and by decision.
3.8.   RECONCILIATION OF ECONOMIC RESULT WITH BUDGET RESULT








(EUR million)




 


2022


2021





ECONOMIC RESULT OF THE YEAR




(91 949 )




(42 100 )






Revenue



 


 





Entitlements established in current year but not yet collected




(5 978 )




(7 068 )






Entitlements established in previous years and collected in current year




74 088 




64 356 






Accrued revenue (net)




2 072 




(5 434 )





 



70 182 




51 854 






Expenses



 


 





Accrued expenses (net)




45 648 




53 108 






Expenses prior year paid in current year




(2 053 )




(1 046 )






Net-effect pre-financing




(21 659 )




(47 608 )






Payment appropriations carried over to next year




(2 660 )




(4 449 )






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




3 331 




(4 047 )






Movement in provisions




3 650 




1 032 






Other




(2 139 )




(3 577 )





 



24 118 




(6 587 )






Economic result Agencies and ECSC i.L.




168




61






BUDGET RESULT OF THE YEAR




2 519 




3 230 





In accordance with the Financial Regulation, the economic result of the year is calculated on the basis of accrual accounting principles and the 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 — 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 amounts related to financial corrections, 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 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 (EU, Euratom) 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.
4.   IMPLEMENTATION OF THE 2022 EU BUDGET
Please see Section 3, ‘Summary of budget implementation’ in the Financial Highlights of the Year for explanatory notes on the 2022 budget implementation for revenue and expenditure, outstanding commitments and budget result.
5.   IMPLEMENTATION OF EU BUDGET REVENUE
5.1.   SUMMARY OF THE IMPLEMENTATION OF EU BUDGET REVENUE

















(EUR million)




 


Income appropriations


Entitlements established


Revenue


Receipts as % of budget


Outstanding




Title


Initial adopted budget


Final adopted budget


Current year


Carried over


Total


On entitlements of current year


On entitlements carried over


Total




1


2


3


4


5=3+4


6


7


8=6+7


9=8/2


10=5-8




1


Own resources


157 701 


153 928 


155 083 


2 237 


157 320 


155 073 


686


155 758 


101 %


1 562 




 



11 — Sugar levies




0




0




(1)




(0)




(1)




(1)



—



(1)



—



(0)





 



12 — Customs duties




17 913 




23 765 




25 181 




2 237 




27 419 




25 171 




686




25 857 




109 %




1 562 





 



13 — VAT




19 071 




19 714 




19 666 



—



19 666 




19 666 



—



19 666 




100 %



—




 



14 — GNI




114 719 




104 088 




103 880 



—



103 880 




103 880 



—



103 880 




100 %



—




 



16 — Reduction of GNI-based contribution granted to certain Member States



—


—



19



—



19




19



—



19



—


—




 



17 — Plastic packaging waste




5 997 




6 361 




6 337 



—



6 337 




6 337 



—



6 337 




100 %



—




2


Surpluses, balances and adjustments


0


2 980 


3 227 


7


3 233 


3 227 


—


3 227 


108 %


7




3


Administrative revenue


1 791 


1 791 


2 581 


75


2 656 


2 554 


53


2 607 


146 %


49




4


Financial revenue, default interest and fines


115


454


(226)


16 861 


16 635 


(949)


1 544 


596


131 %


16 039 




5


Budgetary guarantees, borrowing-and-lending operations


0


0


62 203 


—


62 203 


62 203 


—


62 203 


—


—




6


Revenue, contributions and refunds related to union policies


10 997 


10 884 


20 402 


6 287 


26 689 


14 952 


5 922 


20 874 


192 %


5 815 





Total




170 603 




170 038 




243 269 




25 467 




268 736 




237 059 




8 205 




245 265 




144 %




23 471 





6.   IMPLEMENTATION OF EU BUDGET EXPENDITURE
6.1.   MFF: BREAKDOWN & CHANGES IN COMMITMENT & PAYMENT APPROPRIATIONS



















(EUR million)




MFF Heading


Commitment appropriations


Payment appropriations




Budget appropriations


Additional appropriations


Total approp. available


Budget appropriations


Additional appropriations


Total approp. available




Initial adopted budget


Amending budgets & transfers


Final adopted budget


Carry-overs


Assigned revenue


Initial adopted budget


Amending budgets & transfers


Final adopted budget


Carry-overs


Assigned revenue




1


2


3=1+2


4


5


6=3+4+5


7


8


9=7+8


10


11


12=9+10+11




1


Single Market, Innovation and Digital


21 775 


70


21 845 


230


10 995 


33 071 


21 474 


(868)


20 606 


147


8 625 


29 379 




2


Cohesion, Resilience and Values


56 039 


11 766 


67 805 


0


257 566 


325 372 


62 053 


1 088 


63 140 


27


66 487 


129 654 




 



2a. Economic, social and territorial cohesion




49 709 




11 605 




61 314 




—




14 754 




76 068 




56 351 




1 259 




57 610 




3




17 934 




75 546 





 



2b. Resilience and values




6 330 




161




6 491 




0




242 812 




249 303 




5 702 




(171)




5 531 




25




48 553 




54 108 





3


Natural Resources and Environment


56 235 


446


56 681 


686


17 832 


75 200 


56 602 


(820)


55 782 


693


2 797 


59 271 




 



of which: Market-related expenditure and direct payments




40 369 




(0)




40 369 




686




632




41 687 




40 393 




(37)




40 356 




687




632




41 674 





4


Migration and Border Management


3 091 


319


3 410 


2


108


3 520 


3 078 


294


3 373 


27


242


3 642 




5


Security and Defence


1 785 


28


1 813 


—


38


1 851 


1 238 


(79)


1 159 


5


28


1 192 




6


Neighbourhood and the World


17 170 


500


17 670 


2 237 


456


20 364 


12 916 


240


13 156 


1 048 


698


14 902 




7


European Public Administration


10 620 


163


10 783 


22


1 269 


12 075 


10 620 


163


10 783 


1 085 


1 281 


13 149 




 



of which: Administrative expenditure of the institutions




4 421 




64




4 485 




22




534




5 041 




4 421 




64




4 485 




695




544




5 724 





O


Outside MFF


—


—


—


—


6 692 


6 692 


—


—


—


—


6 830 


6 830 




S


Solidarity mechanisms within and outside the Union (Special instruments)


2 799 


(580)


2 219 


1 303 


10


3 531 


2 623 


(583)


2 040 


1 303 


8


3 351 





Total




169 516 




12 711 




182 227 




4 481 




294 968 




481 676 




170 603 




(565)




170 038 




4 335 




86 996 




261 370 





6.2.   MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS




















(EUR million)




MFF Heading


Total appropr. available


Commitments made


Appropriations carried over to 2023


Appropriations lapsing




from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budget


from carry-overs


from assigned revenue


Total




1


2


3


4


5=2+3 +4


6=5/1


7


8


9=7+8


10


11


12


13=10+11+12




1


Single Market, Innovation and Digital


33 071 


21 843 


230


5 257 


27 330 


83 %


—


5 738 


5 738 


2


—


1


3




2


Cohesion, Resilience and Values


325 372 


66 644 


0


152 263 


218 907 


67 %


159


105 221 


105 381 


1 002 


—


82


1 084 




 



2a. Economic, social and territorial cohesion




76 068 




60 159 




—




14 473 




74 632 




98 %




159




199




359




996



—



82




1 078 





 



2b. Resilience and values




249 303 




6 485 




0




137 790 




144 275 




58 %




0




105 022 




105 022 




5



—



1




6





3


Natural Resources and Environment


75 200 


56 070 


676


11 396 


68 142 


91 %


488


6 275 


6 763 


123


10


161


295




 



of which: Market-related expenditure and direct payments




41 687 




39 876 




676




629




41 182 




99 %




485




2




488




7




10




0




18





4


Migration and Border Management


3 520 


3 395 


2


50


3 446 


98 %


16


58


74


0


—


0


0




5


Security and Defence


1 851 


1 809 


—


30


1 840 


99 %


3


7


11


0


—


0


1




6


Neighbourhood and the World


20 364 


17 633 


2 237 


283


20 153 


99 %


38


173


211


0


0


0


0




7


European Public Administration


12 075 


10 733 


21


911


11 664 


97 %


1


358


359


50


1


1


52




 



of which: Administrative expenditure of the institutions




5 041 




4 445 




21




384




4 850 




96 %




1




149




150




40




1




0




41





O


Outside MFF


6 692 


—


—


3 006 


3 006 


45 %


—


3 686 


3 686 


—


—


—


—




S


Solidarity mechanisms within and outside the Union (Special instruments)


3 531 


1 299 


1 303 


—


2 602 


74 %


746


3


749


173


—


7


180





Total




481 676 




179 425 




4 469 




173 196 




357 091 




74 %




1 451 




121 520 




122 971 




1 351 




12




252




1 614 





6.3.   MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS




















(EUR million)




MFF Heading


Total appropr. available


Payments made


Appropriations carried over to 2023


Appropriations lapsing




from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budget


from carry-overs


from assigned revenue


Total




1


2


3


4


5=2+3+4


6=5/1


7


8


9=7+8


10


11


12


13=10+11+12




1


Single Market, Innovation and Digital


29 379 


20 471 


132


4 570 


25 174 


86 %


112


4 052 


4 164 


23


15


3


41




2


Cohesion, Resilience and Values


129 654 


63 055 


24


63 491 


126 570 


98 %


76


2 995 


3 071 


10


3


1


14




 



2a. Economic, social and territorial cohesion




75 546 




57 600 




1




15 414 




73 015 




97 %




3




2 520 




2 523 




7




2




0




8





 



2b. Resilience and values




54 108 




5 455 




23




48 077 




53 555 




99 %




73




475




548




3




2




0




5





3


Natural Resources and Environment


59 271 


55 198 


682


2 396 


58 276 


98 %


493


401


894


91


11


0


102




 



of which: Market-related expenditure and direct payments




41 674 




39 846 




677




629




41 152 




99 %




486




2




488




24




10




0




34





4


Migration and Border Management


3 642 


3 292 


26


49


3 368 


92 %


3


193


196


78


0


0


78




5


Security and Defence


1 192 


1 130 


5


19


1 154 


97 %


6


9


15


23


0


0


23




6


Neighbourhood and the World


14 902 


13 049 


1 032 


440


14 521 


97 %


93


258


352


13


16


0


30




7


European Public Administration


13 149 


9 832 


959


792


11 583 


88 %


923


485


1 407 


50


105


4


158




 



of which: Administrative expenditure of the institutions




5 724 




3 870 




598




333




4 801 




84 %




596




208




805




40




76




3




119





O


Outside MFF


6 830 


—


—


72


72


1 %


—


6 757 


6 757 


—


—


—


—




S


Solidarity mechanisms within and outside the Union (Special instruments)


3 351 


1 294 


1 303 


5


2 602 


78 %


746


3


749


0


—


—


0





Total




261 370 




167 321 




4 163 




71 837 




243 321 




93 %




2 452 




15 152 




17 604 




287




151




7




445





6.4.   MFF: MOVEMENTS IN OUTSTANDING COMMITMENTS (RAL)
















(EUR million)




MFF Heading


Commitments outstanding at the end of previous year


Commitments of the current year


Total commitm. outstanding at the end of the year




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




1


2


3


4=1+2+3


5


6


7


8=5+6+7


9=4+8




1


Single Market, Innovation and Digital


48 717 


(733)


(19 163 )


28 820 


27 330 


(6 011 )


(10)


21 309 


50 130 




2


Cohesion, Resilience and Values


209 033 


(288)


(89 146 )


119 599 


218 907 


(37 423 )


(1)


181 482 


301 081 




 



2a. Economic, social and territorial cohesion




152 840 




(155)




(65 983 )




86 703 




74 632 




(7 032 )




(1)




67 599 




154 302 





 



2b. Resilience and values




56 193 




(133)




(23 163 )




32 896 




144 275 




(30 392 )




(0)




113 883 




146 779 





3


Natural Resources and Environment


43 691 


(98)


(16 091 )


27 502 


68 142 


(42 185 )


(0)


25 957 


53 459 




 



of which: Market-related expenditure and direct payments




334




(6)




(118)




210




41 182 




(41 034 )



—



147




357





4


Migration and Border Management


3 980 


(50)


(1 464 )


2 465 


3 446 


(1 903 )


—


1 543 


4 008 




5


Security and Defence


2 397 


(21)


(769)


1 607 


1 840 


(385)


(0)


1 455 


3 061 




6


Neighbourhood and the World


32 535 


(1 205 )


(8 701 )


22 629 


20 153 


(5 820 )


(0)


14 333 


36 962 




7


European Public Administration


1 076 


(116)


(960)


0


11 664 


(10 623 )


7


1 048 


1 048 




 



of which: Administrative expenditure of the institutions




684




(86)




(598)




—




4 850 




(4 203 )




7




654




654





O


Outside MFF


147


(9)


(11)


127


3 006 


(62)


—


2 944 


3 071 




S


Solidarity mechanisms within and outside the Union (Special instruments)


—


—


—


—


2 602 


(2 602 )


—


0


0





Total




341 575 




(2 520 )




(136 306 )




202 749 




357 091 




(107 015 )




(4)




250 071 




452 821 





6.5.   MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN
















(EUR million)




 


<2016


2016


2017


2018


2019


2020


2021


2022


Total




1


Single Market, Innovation and Digital


634


612


1 364 


2 072 


5 400 


8 895 


9 823 


21 329 


50 130 




2


Cohesion, Resilience and Values


2 129 


528


6 063 


8 997 


15 494 


25 268 


61 090 


181 512 


301 081 




3


Natural Resources and Environment


1 484 


1 100 


1 017 


1 275 


2 349 


6 638 


13 640 


25 957 


53 459 




4


Migration and Border Management


17


26


105


170


559


1 025 


562


1 543 


4 008 




5


Security and Defence


28


9


111


134


204


320


801


1 455 


3 061 




6


Neighbourhood and the World


1 152 


814


1 365 


2 492 


3 943 


4 452 


8 411 


14 333 


36 962 




7


European Public Administration


—


—


—


—


0


—


0


1 048 


1 048 




O


Outside MFF


—


—


—


—


—


0


127


2 944 


3 071 




S


Solidarity mechanisms within and outside the Union (Special instruments)


—


—


—


—


—


—


—


0


0





Total




5 445 




3 090 




10 025 




15 140 




27 949 




46 599 




94 453 




250 120 




452 821 





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.
6.6.   MFF: OUTSTANDING COMMITMENTS BY APPROPRIATIONS TYPE


















(EUR million)




 


From budget appropriations


From assigned revenue appropriations


Total commitm. outstanding at the end of 2022




Commitm. carried forward from 2021


Adjustments


Commitm. made


Payments made


Amount remaining to be settled


Commitm. carried forward from 2021


Adjustments


Commitm. made


Payments made


Amount remaining to be settled




1


2


3


4


5=1+2+3-4


6


7


8


9


10=6+7+8-9


11=5+10




1


Single Market, Innovation and Digital


41 340 


(643)


22 073 


20 229 


42 541 


7 377 


(100)


5 257 


4 945 


7 588 


50 130 




2


Cohesion, Resilience and Values


95 569 


(263)


66 644 


63 014 


98 937 


113 465 


(27)


152 263 


63 556 


202 144 


301 081 




 



2a. Economic, social and territorial cohesion




91 481 




(143)




60 159 




57 554 




93 943 




61 360 




(13)




14 473 




15 461 




60 358 




154 302 





 



2b. Resilience and values




4 088 




(120)




6 485 




5 460 




4 993 




52 105 




(14)




137 790 




48 095 




141 786 




146 779 





3


Natural Resources and Environment


40 854 


(93)


56 746 


56 225 


41 281 


2 837 


(5)


11 396 


2 051 


12 178 


53 459 




 



of which: Market related expenditure and direct payments




334




(6)




40 552 




40 523 




357




—



—



629




629




0




357





4


Migration and Border Management


3 760 


(49)


3 397 


3 297 


3 811 


219


(2)


50


71


197


4 008 




5


Security and Defence


2 364 


(21)


1 809 


1 128 


3 025 


33


(0)


30


27


36


3 061 




6


Neighbourhood and the World


31 666 


(1 181 )


19 870 


14 079 


36 275 


869


(24)


283


442


687


36 962 




7


European Public Administration


968


(48)


10 754 


10 741 


932


107


(60)


911


842


116


1 048 




 



of which: Administrative expenditure of the institutions




630




(22)




4 465 




4 468 




606




53




(56)




384




333




48




654





O


Outside MFF


 


 


—


—


—


147


(9)


3 006 


72


3 071 


3 071 




S


Solidarity mechanisms within and outside the Union (Special instruments)


—


—


2 602 


2 602 


0


 


 


 


 


 


0





Total




216 522 




(2 298 )




183 894 




171 315 




226 803 




125 053 




(227)




173 196 




72 005 




226 018 




452 821 





6.7.   DETAILED MFF: BREAKDOWN AND CHANGES IN COMMITMENT AND PAYMENT APPROPRIATIONS



















(EUR million)




Programme


Commitment appropriations


Payment appropriations




Budget appropriations


Additional appropriations


Total approp. available


Budget appropriations


Additional appropriations


Total approp. available




Initial adopted budget


Amending budgets & transfers


Final adopted budget


Carry-overs


Assigned revenue


Initial adopted budget


Amending budgets & transfers


Final adopted budget


Carry-overs


Assigned revenue




1


2


3=1+2


4


5


6=3+4+5


7


8


9=7+8


10


11


12=9+10+11




1


Horizon Europe


12 239 


1


12 240 


230


5 244 


17 714 


12 559 


(439)


12 120 


96


5 961 


18 178 




 


Euratom


271


(1)


270


—


80


350


314


(44)


270


25


123


417




 


Thermonuclear Experimental Reactor (ITER)


710


—


710


—


23


733


668


(107)


561


1


51


613




 


Other actions


—


—


—


—


690


690


—


—


—


—


371


371




 


Pilot projects and prep. actions


17


—


17


—


—


17


16


(8)


9


—


—


9




 


InvestEU Fund


1 197 


—


1 197 


—


4 677 


5 874 


1 032 


25


1 057 


1


1 717 


2 775 




 


CEF — Transport


1 758 


40


1 799 


—


17


1 816 


1 886 


79


1 966 


1


19


1 986 




 


CEF — Energy


800


(3)


797


—


14


811


589


43


632


1


12


646




 


CEF — Digital


283


(34)


249


—


2


251


257


(124)


133


1


4


138




 


Digital Europe


1 248 


(15)


1 233 


—


31


1 264 


849


(83)


766


7


21


794




 


Decentralised agencies


192


14


206


—


13


219


192


(1)


191


—


13


204




 


Other actions


0


0


0


0


0


0


0


0


0


0


0


0




 


Pilot projects and prep. actions


7


—


7


—


0


7


26


(5)


21


—


0


21




 


Actions under prerogatives of Commission


24


(1)


22


—


4


26


23


2


25


—


1


26




 


Single Market


614


74


688


—


45


733


580


(39)


541


8


57


605




 


EU Anti-Fraud


24


—


24


—


1


26


31


(3)


28


—


1


29




 


Taxation


37


—


37


—


4


41


36


(8)


28


0


4


32




 


Customs


130


—


130


—


8


139


115


(5)


109


0


8


118




 


Decentralised agencies


120


(4)


116


—


12


128


120


(4)


116


—


12


128




 


Other actions


10


(0)


10


—


0


10


9


0


9


—


0


9




 


Pilot projects and prep. actions


17


—


17


—


—


17


13


(6)


8


—


—


8




 


European Space Programme


2 008 


—


2 008 


—


127


2 135 


2 088 


(135)


1 953 


5


248


2 206 




 


Decentralised agencies


68


—


68


—


2


70


68


(5)


64


—


2


65




 


Pilot projects & preparatory actions


0


0


0


0


0


0


0


0


0


0


0


0






Total Heading 1: Single Market, Innovation and Digital






21 775 






70






21 845 






230






10 995 






33 071 






21 474 






(868)






20 606 






147






8 625 






29 379 






2


Regional Development (ERDF) (54)



30 174 


7 255 


37 429 


—


7 983 


45 412 


29 597 


2 583 


32 181 


1


11 625 


43 807 




 


Cohesion Fund


4 865 


1 581 


6 446 


—


657


7 102 


11 162 


(1 675 )


9 488 


0


745


10 233 




 


Cohesion Fund contrib. to CEF-Transport


1 494 


—


1 494 


—


12


1 507 


1 851 


—


1 851 


—


4


1 855 




 


Pilot projects and prep. actions


3


—


3


—


0


3


3


(0)


3


—


0


3




 


European Social Fund Plus (ESF+) (54)



13 174 


2 769 


15 943 


—


6 102 


22 045 


13 736 


350


14 087 


2


5 559 


19 647 




 


Support to Turkish-Cypriot Community


34


—


34


—


1


35


37


6


42


0


0


43




 


European Recovery and Resilience


119


—


119


—


239 943 


240 062 


112


(14)


98


2


47 196 


47 296 




 


Pericles IV


1


—


1


—


0


1


1


(0)


1


—


0


1




 


EU Recovery


145


(71)


74


—


1


75


145


(71)


74


2


1


76




 


RescEU


101


253


354


0


1 959 


2 313 


187


62


249


—


329


578




 


EU4Health


840


(0)


839


—


22


861


353


(163)


190


4


10


204




 


Emergency support within the Union (ESI)


—


—


—


—


377


377


8


126


134


—


377


512




 


Decentralised agencies


291


(6)


284


—


42


327


276


(6)


270


—


42


311




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


1


1


—


—


1




 


Actions under prerogatives of Commission


12


2


14


—


—


14


11


2


12


—


—


12




 


Employment and Social Innovation


106


(19)


88


—


11


99


87


(0)


87


2


11


100




 


Erasmus+


3 402 


4


3 406 


—


394


3 800 


3 301 


(20)


3 281 


8


519


3 807 




 


European Solidarity Corps (ESC)


141


—


141


—


20


161


116


16


132


4


22


158




 


Creative Europe


407


—


407


—


19


426


400


(88)


313


2


22


337




 


Justice


44


—


44


—


9


53


38


1


39


1


10


49




 


Rights and Values


215


—


215


—


2


217


170


(17)


154


1


2


157




 


Decentralised agencies


246


(2)


245


—


4


249


238


(3)


235


—


4


239




 


Other actions


9


—


9


—


3


11


7


(1)


6


—


3


9




 


Pilot projects and prep. actions


35


—


35


—


0


36


52


(4)


48


—


0


48




 


Actions under prerogatives of Commission


183


—


183


—


5


187


164


1


165


—


4


169






Total Heading 2: Cohesion, Resilience and Values






56 039 






11 766 






67 805 






0






257 566 






325 372 






62 053 






1 088 






63 140 






27






66 487 






129 654 






3


Agricultural Guarantees


40 369 


0


40 369 


686


632


41 687 


40 393 


(37)


40 356 


687


632


41 674 




 


Other progr. of Natural Resources and Environment


0


0


0


0


0


0


0


0


0


0


0


0




 


Agricultural Fund for Rural Development


12 728 


—


12 728 


—


6 072 


18 800 


14 680 


(775)


13 905 


0


1 623 


15 528 




 


Maritime and Fisheries


972


162


1 134 


—


76


1 210 


732


3


736


1


183


919




 


Fisheries (SFPA and RFMO)


159


0


159


—


—


159


166


(7)


159


—


—


159




 


Decentralised agencies


29


—


29


—


1


30


29


—


29


—


1


30




 


Pilot projects and prep. actions


1


—


1


—


—


1


6


(1)


5


—


—


5




 


Environment and Climate (LIFE)


756


—


756


—


10


765


529


(1)


528


5


8


542




 


Just Transition Fund


1 160 


283


1 443 


—


10 867 


12 310 


1


0


1


—


175


177




 


Loan facility under Just Transition Mechanism


—


—


—


—


167


167


—


—


—


—


167


167




 


Decentralised agencies


54


—


54


—


7


61


54


—


54


—


7


61




 


Pilot projects and prep. actions


8


—


8


—


0


8


11


(2)


9


—


0


9






Total Heading 3: Natural Resources and Environment






56 235 






446






56 681 






686






17 832 






75 200 






56 602 






(820)






55 782 






693






2 797 






59 271 






4


Asylum, Migration and Integration


1 119 


279


1 399 


2


10


1 411 


1 292 


194


1 486 


26


9


1 521 




 


Decentralised agencies


154


12


166


—


26


192


154


6


160


—


26


186




 


Pilot projects and prep. actions


—


—


—


—


0


0


—


—


—


—


0


0




 


Border Mngmt. (IBMF) — Border mngmt and visa


671


85


756


—


8


764


511


135


646


1


143


790




 


Border Mngmt. (IBMF) — Customs equipment


138


—


138


—


—


138


136


1


137


0


—


137




 


Decentralised agencies


1 009 


(57)


952


—


64


1 016 


986


(42)


944


—


64


1 008 






Total Heading 4: Migration and Border Management






3 091 






319






3 410 






2






108






3 520 






3 078 






294






3 373 






27






242






3 642 






5


Internal Security Fund (ISF)


227


27


254


—


5


259


241


(28)


213


1


5


219




 


Nuclear decommissioning


99


—


99


—


—


99


40


(3)


37


—


—


37




 


Nuclear Safety and decommissioning


44


—


44


—


1


45


65


(24)


41


2


1


44




 


Decentralised agencies


216


1


217


—


10


226


216


1


217


—


10


226




 


Pilot projects and prep. actions


—


—


—


—


—


—


0


—


0


—


—


0




 


Actions under prerogatives of Commission


22


—


22


—


0


22


21


—


21


—


0


21




 


European Defence (Research)


318


—


318


—


7


326


178


(18)


160


1


4


165




 


European Defence (Non Research)


627


—


627


—


15


642


379


(23)


356


1


8


364




 


Military Mobility


232


—


232


—


—


232


98


16


114


1


—


115




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—






Total Heading 5: Security and Defence






1 785 






28






1 813 






—






38






1 851 






1 238 






(79)






1 159 






5






28






1 192 






6


Neighbourhood, Developm. and Intl. Cooperation


12 717 


(94)


12 622 


1 864 


258


14 744 


7 892 


451


8 343 


990


307


9 640 




 


Instrument for Nuclear Safety (EINS)


39


—


39


0


3


42


33


(16)


16


1


3


20




 


Humanitarian Aid (HUMA)


1 806 


636


2 442 


39


24


2 505 


2 092 


306


2 398 


45


24


2 467 




 


Common Foreign and Security Policy (CFSP)


362


—


362


—


25


387


334


50


384


0


25


409




 


Overseas Countries and Territories (OCT)


69


—


69


4


—


73


52


(22)


30


1


—


31




 


Other actions


72


(22)


50


—


1


51


47


(7)


40


—


1


41




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


0


0


—


—


0




 


Actions under prerogatives of Commission


95


—


95


—


1


95


95


(1)


94


—


0


95




 


Pre-Accession Assistance (IPA III)


2 012 


(19)


1 992 


331


145


2 468 


2 372 


(521)


1 851 


11


338


2 200 




 


Pilot projects and prep. actions


0


0


0


0


0


0


0


0


0


0


0


0






Total Heading 6: Neighbourhood and the World






17 170 






500






17 670 






2 237 






456






20 364 






12 916 






240






13 156 






1 048 






698






14 902 






7


Staff Pensions


2 086 


77


2 162 


—


236


2 398 


2 086 


77


2 162 


—


236


2 398 




 


(Pensions former Members) EP


11


1


12


—


—


12


11


1


12


—


—


12




 


(Pensions former Members) ECC


1


—


1


—


—


1


1


—


1


—


—


1




 


(Pensions former Members) Commission


8


—


8


—


—


8


8


—


8


—


—


8




 


(Pensions former Members) CJEU


13


0


13


—


—


13


13


0


13


—


—


13




 


(Pensions former Members) ECA


6


—


6


—


—


6


6


—


6


—


—


6




 


(Pensions former Members) Ombudsman


0


0


0


—


—


0


0


0


0


—


—


0




 


(Pensions former Members) EDPS


0


0


0


—


—


0


0


0


0


—


—


0




 


European schools


207


9


215


—


25


240


207


9


215


2


25


242




 


Remuneration statutory staff


2 625 


3


2 629 


—


91


2 719 


2 625 


3


2 629 


0


91


2 719 




 


Remuneration external staff


253


8


261


—


71


332


253


8


261


39


71


371




 


Members — Salaries and allowances


14


1


15


—


0


15


14


1


15


2


0


17




 


Members — Temporary allowances


3


(0)


2


—


—


2


3


(0)


2


—


—


2




 


Recruitment costs


30


1


31


—


1


33


30


1


31


2


1


35




 


Termination of service


8


0


9


—


—


9


8


0


9


—


—


9




 


Training costs


18


(0)


17


—


6


23


18


(0)


17


12


6


36




 


Social and Mobility


22


(1)


22


—


28


50


22


(1)


22


14


29


64




 


Information and comm. technology


252


3


255


—


106


362


252


3


255


163


106


525




 


Rents and purchases


310


(21)


289


—


49


337


310


(21)


289


18


49


356




 


Linked to buildings


106


25


131


—


32


164


106


25


131


51


32


215




 


Security


66


(2)


64


—


15


79


66


(2)


64


32


15


111




 


Mission and representation


51


(1)


50


—


4


53


51


(1)


50


12


4


65




 


Meetings, committees, conference


26


(13)


13


—


2


15


26


(13)


13


4


2


20




 


Official Journal


3


(1)


2


—


—


2


3


(1)


2


1


—


3




 


Publications


10


3


13


—


3


17


10


3


13


7


3


24




 


Acquisition of information


4


(0)


4


—


0


4


4


(0)


4


2


0


6




 


Studies and investigations


4


(1)


3


—


0


3


4


(1)


3


4


0


8




 


General equipment, vehicle, furniture


17


4


20


—


12


32


17


4


20


13


12


44




 


Linguistic external services


27


4


31


—


41


72


27


4


31


4


41


76




 


Other administrative expenditure


18


(1)


17


—


14


31


18


(1)


17


8


14


38




 


Pilot projects and prep. actions


—


—


—


—


—


—


0


(0)


0


—


—


0




 


Administrative expenditure of Other Institutions


4 421 


64


4 485 


22


534


5 041 


4 421 


64


4 485 


695


544


5 724 






Total Heading 7: European Public Administration






10 620 






163






10 783 






22






1 269 






12 075 






10 620 






163






10 783 






1 085 






1 281 






13 149 






O


Innovation Fund (IF)


—


—


—


—


6 570 


6 570 


—


—


—


—


6 705 


6 705 




 


Other actions


—


—


—


—


122


122


—


—


—


—


124


124






Total Heading O: Outside MFF






—






—






—






—






6 692 






6 692 






—






—






—






—






6 830 






6 830 






S


Solidarity and Emergency Aid (SEAR)


1 299 


(580)


718


12


1


732


1 299 


(580)


718


12


1


732




 


European Globalisation Adjustment (EGF)


201


—


201


—


8


210


25


(2)


23


—


7


30




 


Brexit Adjustment Reserve


1 299 


—


1 299 


1 291 


—


2 590 


1 299 


—


1 299 


1 291 


—


2 590 






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






2 799 






(580)






2 219 






1 303 






10






3 531 






2 623 






(583)






2 040 






1 303 






8






3 351 







Total




169 516 




12 711 




182 227 




4 481 




294 968 




481 676 




170 603 




(565)




170 038 




4 335 




86 996 




261 370 





6.8.   DETAILED MFF: IMPLEMENTATION OF COMMITMENT APPROPRIATIONS




















(EUR million)




Programme


Total appropr. available


Commitments made


Appropriations carried over to 2023


Appropriations lapsing




from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budget


from carry-overs


from assigned revenue


Total




1


2


3


4


5=2+3 +4


6=5/1


7


8


9=7+8


10


11


12


13=10+11+12




1


Horizon Europe


17 714 


12 239 


230


2 840 


15 309 


86 %


—


2 404 


2 404 


1


—


0


1




 


Euratom


350


270


—


26


296


85 %


—


54


54


—


—


0


0




 


Thermonuclear Experimental Reactor (ITER)


733


710


—


16


726


99 %


—


7


7


0


—


—


0




 


Other actions


690


—


—


61


61


9 %


—


629


629


—


—


—


—




 


Pilot projects and prep. actions


17


17


—


—


17


100 %


—


—


—


—


—


—


—




 


InvestEU Fund


5 874 


1 197 


—


2 151 


3 348 


57 %


—


2 526 


2 526 


0


—


—


0




 


CEF — Transport


1 816 


1 799 


—


2


1 801 


99 %


—


15


15


0


—


—


0




 


CEF — Energy


811


797


—


4


801


99 %


—


10


10


0


—


—


0




 


CEF — Digital


251


249


—


—


249


99 %


—


2


2


0


—


—


0




 


Digital Europe


1 264 


1 233 


—


31


1 264 


100 %


—


—


—


0


—


0


0




 


Decentralised agencies


219


206


—


10


216


98 %


—


4


4


—


—


—


—




 


Other actions


0


0


0


0


0


—


0


0


0


0


0


0


0




 


Pilot projects and prep. actions


7


7


—


—


7


97 %


—


0


0


0


—


—


0




 


Actions under prerogatives of Commission


26


22


—


3


25


96 %


—


1


1


0


—


—


0




 


Single Market


733


688


—


21


709


97 %


—


24


24


0


—


0


0




 


EU Anti-Fraud


26


24


—


0


25


96 %


—


1


1


0


—


1


1




 


Taxation


41


37


—


1


38


93 %


—


3


3


0


—


—


0




 


Customs


139


130


—


4


134


97 %


—


4


4


0


—


—


0




 


Decentralised agencies


128


116


—


7


123


96 %


—


5


5


0


—


—


0




 


Other actions


10


10


—


0


10


100 %


—


0


0


—


—


—


—




 


Pilot projects and prep. actions


17


17


—


—


17


100 %


—


—


—


0


—


—


0




 


European Space Programme


2 135 


2 008 


—


77


2 086 


98 %


—


50


50


—


—


—


—




 


Decentralised agencies


70


68


—


2


70


100 %


—


—


—


—


—


—


—




 


Pilot projects & preparatory actions


0


0


0


0


0


—


0


0


0


0


0


0


0






Total Heading 1: Single Market, Innovation and Digital






33 071 






21 843 






230






5 257 






27 330 






83 %






—






5 738 






5 738 






2






—






1






3






2


Regional Development (ERDF) (55)



45 412 


36 556 


—


7 799 


44 355 


98 %


151


155


306


722


—


29


751




 


Cohesion Fund


7 102 


6 220 


—


601


6 822 


96 %


—


11


11


225


—


44


270




 


Cohesion Fund contrib. to CEF-Transport


1 507 


1 494 


—


12


1 507 


100 %


—


0


0


—


—


0


0




 


Pilot projects and prep. actions


3


3


—


—


3


99 %


—


—


—


—


—


0


0




 


European Social Fund Plus (ESF+) (55)



22 045 


15 886 


—


6 060 


21 946 


100 %


8


33


41


49


—


9


58




 


Support to Turkish-Cypriot Community


35


34


—


1


35


100 %


—


0


0


0


—


(0)


0




 


European Recovery and Resilience


240 062 


119


—


136 396 


136 515 


57 %


—


103 547 


103 547 


0


—


0


0




 


Pericles IV


1


1


—


0


1


97 %


—


0


0


0


—


—


0




 


EU Recovery


75


74


—


0


74


99 %


—


1


1


—


—


—


—




 


RescEU


2 313 


354


0


760


1 114 


48 %


0


1 198 


1 199 


0


—


—


0




 


EU4Health


861


839


—


21


860


100 %


—


1


1


0


—


(0)


0




 


Emergency support within the Union (ESI)


377


—


—


343


343


91 %


—


35


35


—


—


0


0




 


Decentralised agencies


327


284


—


15


299


92 %


—


27


27


—


—


—


—




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—




 


Actions under prerogatives of Commission


14


13


—


—


13


96 %


—


—


—


1


—


—


1




 


Employment and Social Innovation


99


86


—


3


90


90 %


—


7


7


2


—


1


2




 


Erasmus+


3 800 


3 406 


—


211


3 617 


95 %


—


183


183


—


—


0


0




 


European Solidarity Corps (ESC)


161


141


—


13


155


96 %


—


6


6


—


—


—


—




 


Creative Europe


426


407


—


13


419


98 %


—


6


6


—


—


—


—




 


Justice


53


44


—


6


49


94 %


—


3


3


—


—


—


—




 


Rights and Values


217


215


—


1


216


99 %


—


1


1


0


—


—


0




 


Decentralised agencies


249


245


—


3


247


99 %


—


2


2


—


—


—


—




 


Other actions


11


8


—


1


9


78 %


—


2


2


1


—


—


1




 


Pilot projects and prep. actions


36


35


—


—


35


98 %


—


0


0


0


—


—


0




 


Actions under prerogatives of Commission


187


181


—


3


184


98 %


—


2


2


2


—


—


2






Total Heading 2: Cohesion, Resilience and Values






325 372 






66 644 






0






152 263 






218 907 






67 %






159






105 221 






105 381 






1 002 






—






82






1 084 






3


Agricultural Guarantees


41 687 


39 876 


676


629


41 182 


99 %


485


2


488


7


10


0


18




 


Other progr. of Natural Resources and Environment


0


0


0


0


0


—


0


0


0


0


0


0


0




 


Agricultural Fund for Rural Development


18 800 


12 728 


—


5 689 


18 416 


98 %


—


222


222


0


—


161


161




 


Maritime and Fisheries


1 210 


1 131 


—


75


1 206 


100 %


3


1


4


0


—


0


0




 


Fisheries (SFPA and RFMO)


159


159


—


—


159


100 %


—


—


—


0


—


—


0




 


Decentralised agencies


30


29


—


1


29


98 %


—


1


1


—


—


—


—




 


Pilot projects and prep. actions


1


1


—


—


1


100 %


—


—


—


—


—


—


—




 


Environment and Climate (LIFE)


765


755


—


3


758


99 %


—


7


7


0


—


0


0




 


Just Transition Fund


12 310 


1 327 


—


4 982 


6 309 


51 %


—


5 885 


5 885 


116


—


—


116




 


Loan facility under Just Transition Mechanism


167


—


—


11


11


7 %


—


156


156


—


—


—


—




 


Decentralised agencies


61


54


—


7


61


100 %


—


0


0


—


—


0


0




 


Pilot projects and prep. actions


8


8


—


—


8


99 %


—


0


0


0


—


—


0






Total Heading 3: Natural Resources and Environment






75 200 






56 070 






676






11 396 






68 142 






91 %






488






6 275 






6 763 






123






10






161






295






4


Asylum, Migration and Integration


1 411 


1 391 


2


9


1 401 


99 %


8


2


10


0


—


—


0




 


Decentralised agencies


192


166


—


18


184


96 %


—


8


8


—


—


0


0




 


Pilot projects and prep. actions


0


—


—


—


—


—


—


0


0


—


—


0


0




 


Border Mngmt. (IBMF) — Border mngmt and visa


764


748


—


8


756


99 %


8


0


8


0


—


0


0




 


Border Mngmt. (IBMF) — Customs equipment


138


138


—


—


138


100 %


—


—


—


—


—


—


—




 


Decentralised agencies


1 016 


952


—


16


967


95 %


—


48


48


—


—


0


0






Total Heading 4: Migration and Border Management






3 520 






3 395 






2






50






3 446 






98 %






16






58






74






0






—






0






0






5


Internal Security Fund (ISF)


259


251


—


4


255


98 %


3


1


5


0


—


(0)


0




 


Nuclear decommissioning


99


99


—


—


99


100 %


—


—


—


—


—


—


—




 


Nuclear Safety and decommissioning


45


44


—


0


44


99 %


—


0


0


0


—


0


0




 


Decentralised agencies


226


217


—


4


221


98 %


—


6


6


—


—


0


0




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—




 


Actions under prerogatives of Commission


22


22


—


0


22


99 %


—


0


0


0


—


0


0




 


European Defence (Research)


326


318


—


7


326


100 %


—


—


—


—


—


—


—




 


European Defence (Non Research)


642


627


—


15


642


100 %


—


—


—


—


—


—


—




 


Military Mobility


232


232


—


—


232


100 %


—


—


—


—


—


—


—




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—






Total Heading 5: Security and Defence






1 851 






1 809 






—






30






1 840 






99 %






3






7






11






0






—






0






1






6


Neighbourhood, Developm. and Intl. Cooperation


14 744 


12 589 


1 864 


146


14 598 


99 %


34


113


146


(0)


0


0


0




 


Instrument for Nuclear Safety (EINS)


42


39


0


2


41


98 %


0


1


1


(0)


0


—


0




 


Humanitarian Aid (HUMA)


2 505 


2 442 


39


16


2 497 


100 %


—


7


7


—


—


—


—




 


Common Foreign and Security Policy (CFSP)


387


362


—


25


387


100 %


—


0


0


0


—


(0)


0




 


Overseas Countries and Territories (OCT)


73


68


4


—


72


99 %


1


—


1


(0)


0


—


0




 


Other actions


51


50


—


—


50


99 %


—


1


1


0


—


—


0




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—




 


Actions under prerogatives of Commission


95


95


—


0


95


100 %


—


0


0


0


—


—


0




 


Pre-Accession Assistance (IPA III)


2 468 


1 989 


331


94


2 413 


98 %


4


51


55


(0)


0


—


0




 


Pilot projects and prep. actions


0


0


0


0


0


—


0


0


0


0


0


0


0






Total Heading 6: Neighbourhood and the World






20 364 






17 633 






2 237 






283






20 153 






99 %






38






173






211






0






0






0






0






7


Staff Pensions


2 398 


2 162 


—


236


2 398 


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) EP


12


12


—


—


12


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) ECC


1


1


—


—


1


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) Commission


8


8


—


—


8


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) CJEU


13


13


—


—


13


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) ECA


6


6


—


—


6


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) Ombudsman


0


0


—


—


0


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) EDPS


0


0


—


—


0


100 %


—


—


—


—


—


—


—




 


European schools


240


215


—


19


235


98 %


—


6


6


0


—


—


0




 


Remuneration statutory staff


2 719 


2 629 


—


36


2 665 


98 %


—


55


55


0


—


—


0




 


Remuneration external staff


332


253


—


33


286


86 %


—


38


38


8


—


0


8




 


Members — Salaries and allowances


15


15


—


0


15


100 %


—


0


0


0


—


(0)


0




 


Members — Temporary allowances


2


2


—


—


2


100 %


—


—


—


0


—


—


0




 


Recruitment costs


33


31


—


0


32


97 %


—


1


1


0


—


—


0




 


Termination of service


9


9


—


—


9


100 %


—


—


—


0


—


—


0




 


Training costs


23


17


—


3


21


89 %


—


2


2


0


—


0


0




 


Social and Mobility


50


22


—


17


39


78 %


—


11


11


0


—


0


0




 


Information and comm. technology


362


255


—


59


314


87 %


—


47


47


0


—


0


0




 


Rents and purchases


337


289


—


34


323


96 %


—


14


14


0


—


—


0




 


Linked to buildings


164


131


—


21


152


93 %


—


12


12


0


—


—


0




 


Security


79


64


—


12


76


96 %


—


3


3


0


—


0


0




 


Mission and representation


53


50


—


2


51


96 %


—


2


2


0


—


0


0




 


Meetings, committees, conference


15


12


—


1


13


86 %


—


1


1


1


—


0


1




 


Official Journal


2


2


—


—


2


100 %


—


—


—


—


—


—


—




 


Publications


17


13


—


3


16


95 %


—


1


1


0


—


0


0




 


Acquisition of information


4


4


—


0


4


99 %


—


0


0


0


—


—


0




 


Studies and investigations


3


3


—


0


3


96 %


—


0


0


0


—


0


0




 


General equipment, vehicle, furniture


32


20


—


5


25


79 %


—


7


7


0


—


—


0




 


Linguistic external services


72


31


—


33


64


89 %


—


8


8


0


—


0


0




 


Other administrative expenditure


31


17


—


11


28


93 %


—


2


2


0


—


0


0




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—




 


Administrative expenditure of Other Institutions


5 041 


4 445 


21


384


4 850 


96 %


1


149


150


40


1


0


41






Total Heading 7: European Public Administration






12 075 






10 733 






21






911






11 664 






97 %






1






358






359






50






1






1






52






O


Innovation Fund (IF)


6 570 


—


—


2 953 


2 953 


45 %


—


3 617 


3 617 


—


—


—


—




 


Other actions


122


—


—


53


53


43 %


—


69


69


—


—


—


—






Total Heading O: Outside MFF






6 692 






—






—






3 006 






3 006 






45 %






—






3 686 






3 686 






—






—






—






—






S


Solidarity and Emergency Aid (SEAR)


732


18


12


—


30


4 %


700


1


702


—


—


—


—




 


European Globalisation Adjustment (EGF)


210


28


—


—


28


13 %


—


1


1


173


—


7


180




 


Brexit Adjustment Reserve


2 590 


1 253 


1 291 


—


2 544 


98 %


46


—


46


—


—


—


—






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






3 531 






1 299 






1 303 






—






2 602 






74 %






746






3






749






173






—






7






180







Total




481 676 




179 425 




4 469 




173 196 




357 091 




74 %




1 451 




121 520 




122 971 




1 351 




12




252




1 614 





6.9.   DETAILED MFF: IMPLEMENTATION OF PAYMENT APPROPRIATIONS




















(EUR million)




Programme


Total appropr. available


Payments made


Appropriations carried over to 2023


Appropriations lapsing




from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budge


from carry-overs


from assigned revenue


Total




1


2


3


4


5=2+3+4


6=5/1


7


8


9=7+8


10


11


12


13=10+11+12




1


Horizon Europe


18 178 


12 048 


87


2 698 


14 834 


82 %


71


3 260 


3 331 


1


9


2


12




 


Euratom


417


253


21


12


286


68 %


16


111


127


1


4


0


4




 


Thermonuclear Experimental Reactor (ITER)


613


560


1


44


605


99 %


1


7


8


0


0


—


0




 


Other actions


371


—


—


64


64


17 %


—


306


306


—


—


—


—




 


Pilot projects and prep. actions


9


8


—


—


8


90 %


—


—


—


1


—


—


1




 


InvestEU Fund


2 775 


1 057 


1


1 605 


2 663 


96 %


0


112


112


0


—


0


0




 


CEF — Transport


1 986 


1 965 


1


8


1 974 


99 %


0


11


11


0


0


—


0




 


CEF — Energy


646


630


1


12


643


100 %


2


0


2


0


0


(0)


0




 


CEF — Digital


138


132


1


4


137


99 %


0


1


1


0


0


—


0




 


Digital Europe


794


754


7


21


782


98 %


9


—


9


3


0


0


3




 


Decentralised agencies


204


191


—


10


201


98 %


—


4


4


—


—


—


—




 


Other actions


0


0


0


0


0


—


0


0


0


0


0


0


0




 


Pilot projects and prep. actions


21


14


—


—


14


67 %


—


0


0


7


—


—


7




 


Actions under prerogatives of Commission


26


24


—


0


25


95 %


—


1


1


0


—


—


0




 


Single Market


605


533


7


19


560


92 %


6


37


43


1


1


0


3




 


EU Anti-Fraud


29


22


—


1


23


78 %


—


1


1


6


—


—


6




 


Taxation


32


27


0


1


28


87 %


0


3


3


1


0


—


1




 


Customs


118


109


0


4


113


96 %


0


4


4


0


—


—


0




 


Decentralised agencies


128


116


—


7


123


96 %


—


5


5


0


—


—


0




 


Other actions


9


9


—


0


9


96 %


—


0


0


0


—


—


0




 


Pilot projects and prep. actions


8


7


—


—


7


91 %


—


—


—


1


—


—


1




 


European Space Programme


2 206 


1 948 


5


59


2 012 


91 %


5


189


193


0


1


0


1




 


Decentralised agencies


65


64


—


2


65


100 %


—


—


—


—


—


—


—




 


Pilot projects & preparatory actions


0


0


0


0


0


—


0


0


0


0


0


0


0






Total Heading 1: Single Market, Innovation and Digital






29 379 






20 471 






132






4 570 






25 174 






86 %






112






4 052 






4 164 






23






15






3






41






2


Regional Development (ERDF) (56)



43 807 


32 175 


1


10 283 


42 459 


97 %


1


1 342 


1 343 


5


0


(0)


5




 


Cohesion Fund


10 233 


9 487 


0


521


10 009 


98 %


0


224


224


0


0


—


0




 


Cohesion Fund contrib. to CEF-Transport


1 855 


1 851 


—


4


1 855 


100 %


—


0


0


0


—


0


0




 


Pilot projects and prep. actions


3


2


—


0


2


69 %


—


—


—


1


—


—


1




 


European Social Fund Plus (ESF+) (56)



19 647 


14 084 


0


4 606 


18 690 


95 %


2


953


956


0


1


0


1




 


Support to Turkish-Cypriot Community


43


42


0


0


42


98 %


1


0


1


0


0


0


0




 


European Recovery and Resilience


47 296 


96


1


47 178 


47 275 


100 %


2


18


20


0


0


0


0




 


Pericles IV


1


1


—


0


1


81 %


—


0


0


0


—


—


0




 


EU Recovery


76


45


2


0


47


61 %


29


1


30


—


0


—


0




 


RescEU


578


233


—


320


553


96 %


16


8


25


(0)


—


0


0




 


EU4Health


204


186


3


9


198


97 %


4


1


4


0


1


0


1




 


Emergency support within the Union (ESI)


512


134


—


324


458


90 %


—


53


53


0


—


0


0




 


Decentralised agencies


311


270


—


15


284


91 %


—


27


27


0


—


—


0




 


Pilot projects and prep. actions


1


1


—


—


1


100 %


—


—


—


—


—


—


—




 


Actions under prerogatives of Commission


12


11


—


—


11


95 %


—


—


—


1


—


—


1




 


Employment and Social Innovation


100


85


2


4


91


91 %


1


7


9


0


0


0


1




 


Erasmus+


3 807 


3 269 


8


198


3 474 


91 %


13


321


333


0


0


0


0




 


European Solidarity Corps (ESC)


158


128


4


2


134


84 %


4


21


25


0


0


0


0




 


Creative Europe


337


310


2


13


325


96 %


2


9


11


(0)


0


0


0




 


Justice


49


38


1


9


48


97 %


1


1


1


0


0


(0)


0




 


Rights and Values


157


153


1


1


154


98 %


1


1


2


0


0


—


0




 


Decentralised agencies


239


235


—


3


237


99 %


—


2


2


0


—


0


0




 


Other actions


9


6


—


1


7


82 %


—


2


2


0


—


—


0




 


Pilot projects and prep. actions


48


48


—


—


48


99 %


—


0


0


0


—


—


0




 


Actions under prerogatives of Commission


169


164


—


2


166


98 %


—


3


3


1


—


—


1






Total Heading 2: Cohesion, Resilience and Values






129 654 






63 055 






24






63 491 






126 570 






98 %






76






2 995 






3 071 






10






3






1






14






3


Agricultural Guarantees


41 674 


39 846 


677


629


41 152 


99 %


486


2


488


24


10


0


34




 


Other progr. of Natural Resources and Environment


0


0


0


0


0


—


0


0


0


0


0


0


0




 


Agricultural Fund for Rural Development


15 528 


13 839 


0


1 406 


15 244 


98 %


0


217


217


67


0


—


67




 


Maritime and Fisheries


919


734


1


183


918


100 %


1


0


1


0


0


(0)


0




 


Fisheries (SFPA and RFMO)


159


159


—


—


159


100 %


—


—


—


—


—


—


—




 


Decentralised agencies


30


29


—


1


29


98 %


—


1


1


—


—


—


—




 


Pilot projects and prep. actions


5


5


—


—


5


100 %


—


—


—


—


—


—


—




 


Environment and Climate (LIFE)


542


522


5


3


530


98 %


6


6


12


0


0


0


0




 


Just Transition Fund


177


1


—


167


169


95 %


—


8


8


—


—


(0)


(0)




 


Loan facility under Just Transition Mechanism


167


—


—


1


1


1 %


—


166


166


—


—


—


—




 


Decentralised agencies


61


54


—


7


61


100 %


—


0


0


—


—


0


0




 


Pilot projects and prep. actions


9


9


—


—


9


99 %


—


0


0


0


—


—


0






Total Heading 3: Natural Resources and Environment






59 271 






55 198 






682






2 396 






58 276 






98 %






493






401






894






91






11






0






102






4


Asylum, Migration and Integration


1 521 


1 449 


25


5


1 480 


97 %


2


4


6


35


0


—


36




 


Decentralised agencies


186


148


—


18


166


89 %


—


8


8


12


—


0


12




 


Pilot projects and prep. actions


0


—


—


—


—


—


—


0


0


—


—


0


0




 


Border Mngmt. (IBMF) — Border mngmt and visa


790


630


1


10


641


81 %


1


133


134


15


0


—


15




 


Border Mngmt. (IBMF) — Customs equipment


137


137


0


—


137


100 %


0


—


0


0


—


—


0




 


Decentralised agencies


1 008 


928


—


16


944


94 %


—


48


48


16


—


0


16






Total Heading 4: Migration and Border Management






3 642 






3 292 






26






49






3 368 






92 %






3






193






196






78






0






0






78






5


Internal Security Fund (ISF)


219


192


1


2


196


89 %


1


3


4


19


0


—


19




 


Nuclear decommissioning


37


37


—


—


37


100 %


—


—


—


0


—


—


0




 


Nuclear Safety and decommissioning


44


39


2


1


41


94 %


2


0


2


0


0


—


1




 


Decentralised agencies


226


217


—


4


221


98 %


—


6


6


—


—


0


0




 


Pilot projects and prep. actions


0


—


—


—


—


—


—


—


—


0


—


—


0




 


Actions under prerogatives of Commission


21


18


—


0


18


87 %


—


0


0


3


—


—


3




 


European Defence (Research)


165


158


1


4


163


99 %


1


—


1


(0)


0


0


0




 


European Defence (Non Research)


364


355


1


8


364


100 %


1


—


1


(0)


0


—


0




 


Military Mobility


115


114


1


—


114


100 %


0


—


0


0


—


—


0




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—


—


—


—


—






Total Heading 5: Security and Defence






1 192 






1 130 






5






19






1 154 






97 %






6






9






15






23






0






0






23






6


Neighbourhood, Developm. and Intl. Cooperation


9 640 


8 275 


977


149


9 400 


98 %


68


159


226


0


13


0


13




 


Instrument for Nuclear Safety (EINS)


20


16


1


3


19


97 %


1


—


1


0


0


—


0




 


Humanitarian Aid (HUMA)


2 467 


2 391 


45


10


2 446 


99 %


7


14


21


(0)


0


—


0




 


Common Foreign and Security Policy (CFSP)


409


383


0


25


408


100 %


0


0


1


0


0


0


0




 


Overseas Countries and Territories (OCT)


31


29


1


—


30


96 %


1


—


1


0


0


—


0




 


Other actions


41


35


—


—


35


84 %


—


1


1


6


—


—


6




 


Pilot projects and prep. actions


0


0


—


—


0


66 %


—


—


—


0


—


—


0




 


Actions under prerogatives of Commission


95


93


—


0


93


98 %


—


0


0


2


—


—


2




 


Pre-Accession Assistance (IPA III)


2 200 


1 829 


8


253


2 090 


95 %


17


85


101


6


2


—


8




 


Pilot projects and prep. actions


0


0


0


0


0


—


0


0


0


0


0


0


0






Total Heading 6: Neighbourhood and the World






14 902 






13 049 






1 032 






440






14 521 






97 %






93






258






352






13






16






0






30






7


Staff Pensions


2 398 


2 162 


—


236


2 398 


100 %


—


0


0


—


—


(0)


(0)




 


(Pensions former Members) EP


12


12


—


—


12


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) ECC


1


1


—


—


1


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) Commission


8


8


—


—


8


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) CJEU


13


13


—


—


13


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) ECA


6


6


—


—


6


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) Ombudsman


0


0


—


—


0


100 %


—


—


—


—


—


—


—




 


(Pensions former Members) EDPS


0


0


—


—


0


100 %


—


—


—


—


—


—


—




 


European schools


242


215


2


18


236


97 %


0


6


6


0


—


(0)


0




 


Remuneration statutory staff


2 719 


2 629 


—


36


2 665 


98 %


0


55


55


0


0


—


0




 


Remuneration external staff


371


210


35


32


277


75 %


42


39


81


8


4


0


13




 


Members — Salaries and allowances


17


15


1


0


16


90 %


0


0


0


0


1


(0)


1




 


Members — Temporary allowances


2


2


—


—


2


100 %


—


—


—


0


—


—


0




 


Recruitment costs


35


28


2


0


30


87 %


3


1


4


0


0


—


0




 


Termination of service


9


9


—


—


9


100 %


—


—


—


0


—


—


0




 


Training costs


36


8


11


2


20


57 %


9


4


13


0


2


0


2




 


Social and Mobility


64


13


12


10


35


55 %


9


19


27


0


2


0


2




 


Information and comm. technology


525


129


160


30


319


61 %


126


76


202


0


4


0


4




 


Rents and purchases


356


289


18


33


340


95 %


0


16


16


0


0


—


0




 


Linked to buildings


215


71


49


12


132


62 %


60


21


81


0


2


—


2




 


Security


111


38


30


5


73


66 %


26


11


36


0


1


—


1




 


Mission and representation


65


38


4


1


44


67 %


11


2


13


0


8


0


8




 


Meetings, committees, conference


20


5


1


1


7


36 %


7


2


9


1


3


0


4




 


Official Journal


3


2


1


—


2


84 %


0


—


0


—


0


—


0




 


Publications


24


8


7


2


17


68 %


6


2


8


0


0


0


0




 


Acquisition of information


6


3


2


0


4


71 %


2


0


2


0


0


—


0




 


Studies and investigations


8


1


4


—


5


63 %


3


0


3


0


0


0


0




 


General equipment, vehicle, furniture


44


6


12


3


22


49 %


14


8


22


0


1


—


1




 


Linguistic external services


76


27


4


31


63


82 %


4


9


13


0


0


0


1




 


Other administrative expenditure


38


12


7


8


27


71 %


5


6


11


0


1


0


1




 


Pilot projects and prep. actions


0


0


—


—


0


91 %


—


—


—


0


—


—


0




 


Administrative expenditure of Other Institutions


5 724 


3 870 


598


333


4 801 


84 %


596


208


805


40


76


3


119






Total Heading 7: European Public Administration






13 149 






9 832 






959






792






11 583 






88 %






923






485






1 407 






50






105






4






158






O


Innovation Fund (IF)


6 705 


—


—


21


21


0 %


—


6 685 


6 685 


—


—


—


—




 


Other actions


124


—


—


52


52


42 %


—


72


72


—


—


—


—






Total Heading O: Outside MFF






6 830 






—






—






72






72






1 %






—






6 757 






6 757 






—






—






—






—






S


Solidarity and Emergency Aid (SEAR)


732


18


12


—


30


4 %


700


1


702


—


—


—


—




 


European Globalisation Adjustment (EGF)


30


22


—


5


28


94 %


0


1


2


0


—


—


0




 


Brexit Adjustment Reserve


2 590 


1 253 


1 291 


—


2 544 


98 %


46


—


46


—


—


—


—






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






3 351 






1 294 






1 303 






5






2 602 






78 %






746






3






749






0






—






—






0







Total




261 370 




167 321 




4 163 




71 837 




243 321 




93 %




2 452 




15 152 




17 604 




287




151




7




445





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
















(EUR million)




Programme


Commitments outstanding at the end of previous year


Commitments of the current year


Total commitm. outstanding at the end of the year




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




1


2


3


4=1+2+3


5


6


7


8=5+6+7


9=4+8




1


Horizon Europe


27 571 


(385)


(11 472 )


15 714 


15 309 


(3 362 )


(9)


11 939 


27 653 




 


Euratom


317


(24)


(103)


191


296


(183)


(0)


112


303




 


Thermonuclear Experimental Reactor (ITER)


1 313 


(0)


(518)


795


726


(86)


(1)


639


1 433 




 


Other actions


106


(8)


(44)


54


61


(20)


—


41


95




 


Pilot projects and prep. actions


22


(1)


(8)


13


17


(0)


—


17


30




 


InvestEU Fund


4 053 


(30)


(2 368 )


1 655 


3 348 


(295)


—


3 053 


4 708 




 


CEF — Transport


7 183 


(147)


(1 956 )


5 079 


1 801 


(18)


—


1 783 


6 862 




 


CEF — Energy


3 904 


(68)


(640)


3 197 


801


(3)


—


798


3 994 




 


CEF — Digital


436


(5)


(133)


298


249


(4)


—


245


543




 


Digital Europe


1 140 


(0)


(523)


616


1 264 


(258)


—


1 006 


1 622 




 


Decentralised agencies


36


—


(36)


—


216


(165)


—


51


51




 


Other actions


0


0


0


0


0


0


0


0


0




 


Pilot projects and prep. actions


52


(1)


(13)


38


7


(2)


—


5


43




 


Actions under prerogatives of Commission


41


(2)


(21)


17


25


(3)


—


22


39




 


Single Market


950


(54)


(418)


478


709


(141)


(0)


567


1 045 




 


EU Anti-Fraud


33


(0)


(18)


15


25


(5)


—


19


34




 


Taxation


33


(1)


(20)


12


38


(8)


—


30


42




 


Customs


122


(3)


(89)


31


134


(24)


—


110


141




 


Decentralised agencies


—


—


—


—


123


(123)


—


0


0




 


Other actions


6


(0)


(4)


2


10


(5)


—


5


7




 


Pilot projects and prep. actions


16


(1)


(7)


8


17


(0)


—


17


25




 


European Space Programme


1 369 


(4)


(757)


608


2 086 


(1 254 )


—


831


1 439 




 


Decentralised agencies


15


—


(15)


—


70


(50)


—


20


20




 


Pilot projects & preparatory actions


0


0


0


0


0


0


0


0


0






Total Heading 1: Single Market, Innovation and Digital






48 717 






(733)






(19 163 )






28 820 






27 330 






(6 011 )






(10)






21 309 






50 130 






2


Regional Development (ERDF) (57)



84 149 


(86)


(37 813 )


46 250 


44 355 


(4 645 )


(0)


39 710 


85 960 




 


Cohesion Fund


18 402 


(16)


(9 327 )


9 059 


6 822 


(682)


(0)


6 140 


15 198 




 


Cohesion Fund contrib. to CEF-Transport


7 026 


(29)


(1 844 )


5 152 


1 507 


(11)


—


1 496 


6 648 




 


Pilot projects and prep. actions


7


(1)


(2)


4


3


—


—


3


6




 


European Social Fund Plus (ESF+) (57)



43 257 


(23)


(16 996 )


26 238 


21 946 


(1 694 )


(0)


20 252 


46 489 




 


Support to Turkish-Cypriot Community


117


(2)


(40)


75


35


(3)


(0)


32


107




 


European Recovery and Resilience


51 801 


(4)


(21 231 )


30 566 


136 515 


(26 045 )


—


110 470 


141 037 




 


Pericles IV


1


(0)


(0)


1


1


(0)


—


0


1




 


EU Recovery


2


(0)


(2)


—


74


(45)


—


29


29




 


RescEU


596


(8)


(164)


425


1 114 


(389)


(0)


725


1 150 




 


EU4Health


412


(11)


(108)


293


860


(90)


—


770


1 063 




 


Emergency support within the Union (ESI)


191


(14)


(135)


43


343


(324)


—


19


62




 


Decentralised agencies


20


—


—


20


299


(284)


—


15


35




 


Pilot projects and prep. actions


1


(0)


(1)


0


—


—


—


—


0




 


Actions under prerogatives of Commission


9


(0)


(7)


1


13


(4)


—


9


10




 


Employment and Social Innovation


187


(12)


(73)


102


90


(18)


—


72


174




 


Erasmus+


1 765 


(37)


(887)


840


3 617 


(2 587 )


—


1 030 


1 870 




 


European Solidarity Corps (ESC)


148


(3)


(36)


109


155


(98)


—


57


166




 


Creative Europe


400


(12)


(216)


173


419


(109)


—


310


483




 


Justice


75


(13)


(20)


41


49


(27)


—


22


63




 


Rights and Values


156


(5)


(73)


78


216


(82)


—


134


213




 


Decentralised agencies


33


(2)


(3)


28


247


(235)


—


13


41




 


Other actions


10


(0)


(6)


4


9


(1)


—


8


12




 


Pilot projects and prep. actions


83


(2)


(47)


34


35


(1)


—


34


68




 


Actions under prerogatives of Commission


187


(8)


(115)


63


184


(50)


—


134


197






Total Heading 2: Cohesion, Resilience and Values






209 033 






(288)






(89 146 )






119 599 






218 907 






(37 423 )






(1)






181 482 






301 081 






3


Agricultural Guarantees


334


(6)


(118)


210


41 182 


(41 034 )


—


147


357




 


Other progr. of Natural Resources and Environment


0


0


0


0


0


0


0


0


0




 


Agricultural Fund for Rural Development


38 215 


(17)


(14 599 )


23 598 


18 416 


(645)


(0)


17 771 


41 369 




 


Maritime and Fisheries


2 922 


(38)


(849)


2 035 


1 206 


(68)


(0)


1 138 


3 173 




 


Fisheries (SFPA and RFMO)


23


—


(14)


10


159


(145)


—


14


24




 


Decentralised agencies


—


—


—


—


29


(29)


—


—


—




 


Pilot projects and prep. actions


9


(0)


(5)


4


1


—


—


1


5




 


Environment and Climate (LIFE)


2 154 


(29)


(495)


1 629 


758


(34)


—


724


2 353 




 


Just Transition Fund


8


(5)


(1)


1


6 309 


(168)


—


6 142 


6 143 




 


Loan facility under Just Transition Mechanism


—


—


—


—


11


(1)


—


10


10




 


Decentralised agencies


3


—


(3)


1


61


(58)


—


3


3




 


Pilot projects and prep. actions


24


(2)


(8)


14


8


(1)


—


7


21






Total Heading 3: Natural Resources and Environment






43 691 






(98)






(16 091 )






27 502 






68 142 






(42 185 )






(0)






25 957 






53 459 






4


Asylum, Migration and Integration


2 363 


(19)


(861)


1 482 


1 401 


(618)


—


783


2 265 




 


Decentralised agencies


20


(20)


—


—


184


(166)


—


18


18




 


Pilot projects and prep. actions


0


(0)


—


—


—


—


—


—


—




 


Border Mngmt. (IBMF) — Border mngmt and visa


1 141 


(11)


(313)


817


756


(329)


—


427


1 244 




 


Border Mngmt. (IBMF) — Customs equipment


135


—


(63)


72


138


(73)


—


65


137




 


Decentralised agencies


321


(0)


(227)


94


967


(717)


—


250


344






Total Heading 4: Migration and Border Management






3 980 






(50)






(1 464 )






2 465 






3 446 






(1 903 )






—






1 543 






4 008 






5


Internal Security Fund (ISF)


360


(16)


(124)


221


255


(72)


—


183


403




 


Nuclear decommissioning


377


—


(37)


340


99


—


—


99


439




 


Nuclear Safety and decommissioning


315


(2)


(35)


278


44


(6)


—


38


316




 


Decentralised agencies


0


(0)


—


—


221


(221)


—


—


—




 


Pilot projects and prep. actions


1


—


—


1


—


—


—


—


1




 


Actions under prerogatives of Commission


24


(2)


(12)


10


22


(7)


—


15


25




 


European Defence (Research)


329


(0)


(159)


170


326


(4)


(0)


321


492




 


European Defence (Non Research)


762


(1)


(290)


472


642


(74)


—


568


1 040 




 


Military Mobility


226


—


(113)


113


232


(1)


—


230


343




 


Pilot projects and prep. actions


2


—


—


2


—


—


—


—


2






Total Heading 5: Security and Defence






2 397 






(21)






(769)






1 607 






1 840 






(385)






(0)






1 455 






3 061 






6


Neighbourhood, Developm. and Intl. Cooperation


23 453 


(1 023 )


(6 082 )


16 349 


14 598 


(3 319 )


(0)


11 279 


27 629 




 


Instrument for Nuclear Safety (EINS)


128


(8)


(17)


103


41


(2)


—


39


142




 


Humanitarian Aid (HUMA)


1 084 


(7)


(655)


422


2 497 


(1 791 )


(0)


706


1 128 




 


Common Foreign and Security Policy (CFSP)


178


(20)


(79)


79


387


(329)


—


58


136




 


Overseas Countries and Territories (OCT)


65


(0)


(29)


36


72


(1)


—


71


107




 


Other actions


0


(0)


—


0


50


(35)


—


15


16




 


Pilot projects and prep. actions


2


(0)


(0)


1


—


—


—


—


1




 


Actions under prerogatives of Commission


154


(8)


(67)


79


95


(26)


—


69


148




 


Pre-Accession Assistance (IPA III)


7 471 


(139)


(1 773 )


5 559 


2 413 


(318)


—


2 096 


7 655 




 


Pilot projects and prep. actions


0


0


0


0


0


0


0


0


0






Total Heading 6: Neighbourhood and the World






32 535 






(1 205 )






(8 701 )






22 629 






20 153 






(5 820 )






(0)






14 333 






36 962 






7


Staff Pensions


—


—


—


—


2 398 


(2 398 )


—


0


0




 


(Pensions former Members) EP


—


—


—


—


12


(12)


—


—


—




 


(Pensions former Members) ECC


—


—


—


—


1


(1)


—


—


—




 


(Pensions former Members) Commission


—


—


—


—


8


(8)


—


—


—




 


(Pensions former Members) CJEU


—


—


—


—


13


(13)


—


—


—




 


(Pensions former Members) ECA


—


—


—


—


6


(6)


—


—


—




 


(Pensions former Members) Ombudsman


—


—


—


—


0


(0)


—


—


—




 


(Pensions former Members) EDPS


—


—


—


—


0


(0)


—


—


—




 


European schools


2


—


(2)


—


235


(234)


—


1


1




 


Remuneration statutory staff


0


(0)


—


—


2 665 


(2 665 )


(0)


0


0




 


Remuneration external staff


39


(4)


(35)


—


286


(242)


(0)


43


43




 


Members — Salaries and allowances


2


(1)


(1)


—


15


(15)


—


0


0




 


Members — Temporary allowances


—


—


—


—


2


(2)


—


—


—




 


Recruitment costs


2


(0)


(2)


—


32


(28)


—


4


4




 


Termination of service


—


—


—


—


9


(9)


—


—


—




 


Training costs


12


(2)


(11)


—


21


(10)


—


11


11




 


Social and Mobility


15


(3)


(13)


0


39


(23)


—


16


16




 


Information and comm. technology


163


(4)


(160)


—


314


(159)


—


155


155




 


Rents and purchases


18


(0)


(18)


—


323


(321)


—


2


2




 


Linked to buildings


51


(2)


(49)


—


152


(83)


—


69


69




 


Security


32


(1)


(30)


—


76


(43)


—


33


33




 


Mission and representation


12


(8)


(4)


—


51


(40)


—


11


11




 


Meetings, committees, conference


4


(3)


(1)


—


13


(6)


—


7


7




 


Official Journal


1


(0)


(1)


—


2


(2)


—


0


0




 


Publications


7


(0)


(7)


—


16


(9)


—


7


7




 


Acquisition of information


2


(0)


(2)


—


4


(3)


—


2


2




 


Studies and investigations


4


(0)


(4)


—


3


(1)


—


3


3




 


General equipment, vehicle, furniture


13


(1)


(12)


—


25


(10)


—


15


15




 


Linguistic external services


4


(0)


(4)


—


64


(59)


—


5


5




 


Other administrative expenditure


8


(1)


(7)


—


28


(20)


—


8


8




 


Pilot projects and prep. actions


0


(0)


(0)


0


—


—


—


—


0




 


Administrative expenditure of Other Institutions


684


(86)


(598)


—


4 850 


(4 203 )


7


654


654






Total Heading 7: European Public Administration






1 076 






(116)






(960)






0






11 664 






(10 623 )






7






1 048 






1 048 






O


Innovation Fund (IF)


138


(3)


(10)


125


2 953 


(10)


—


2 943 


3 068 




 


Other actions


8


(7)


(0)


2


53


(52)


—


1


3






Total Heading O: Outside MFF






147






(9)






(11)






127






3 006 






(62)






—






2 944 






3 071 






S


Solidarity and Emergency Aid (SEAR)


—


—


—


—


30


(30)


—


—


—




 


European Globalisation Adjustment (EGF)


—


—


—


—


28


(28)


—


0


0




 


Brexit Adjustment Reserve


—


—


—


—


2 544 


(2 544 )


—


—


—






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






—






—






—






—






2 602 






(2 602 )






—






0






0







Total




341 575 




(2 520 )




(136 306 )




202 749 




357 091 




(107 015 )




(4)




250 071 




452 821 





6.11.   DETAILED MFF: OUTSTANDING COMMITMENTS BY YEAR OF ORIGIN
















(EUR million)




Programme


<2016


2016


2017


2018


2019


2020


2021


2022


Total




1


Horizon Europe


384


388


716


1 267 


2 475 


4 668 


5 814 


11 941 


27 653 




 


Euratom


24


3


2


22


32


74


34


112


303




 


Thermonuclear Experimental Reactor (ITER)


—


—


—


—


—


296


498


639


1 433 




 


Other actions


0


—


1


6


10


13


24


41


95




 


Pilot projects and prep. actions


—


—


0


1


3


2


8


17


30




 


InvestEU Fund


155


98


131


111


157


241


762


3 053 


4 708 




 


CEF — Transport


6


109


99


308


1 664 


1 975 


918


1 783 


6 862 




 


CEF — Energy


35


3


390


270


890


1 057 


552


798


3 994 




 


CEF — Digital


2


2


5


24


23


34


208


245


543




 


Digital Europe


—


—


0


0


0


0


615


1 006 


1 622 




 


Decentralised agencies


—


—


—


—


—


—


—


51


51




 


Other actions


0


0


0


0


0


0


0


0


0




 


Pilot projects and prep. actions


—


—


—


0


2


22


14


5


43




 


Actions under prerogatives of Commission


—


—


—


0


1


2


14


22


39




 


Single Market


28


10


20


25


65


96


217


585


1 045 




 


EU Anti-Fraud


0


—


0


1


1


5


8


19


34




 


Taxation


—


—


—


0


0


2


10


30


42




 


Customs


—


—


0


0


0


2


28


110


141




 


Decentralised agencies


—


—


—


—


—


—


—


0


0




 


Other actions


—


—


—


—


—


—


2


5


7




 


Pilot projects and prep. actions


—


—


0


0


1


4


3


17


25




 


European Space Programme


—


—


1


37


74


402


94


831


1 439 




 


Decentralised agencies


—


—


—


—


—


—


—


20


20




 


Pilot projects & preparatory actions


0


0


0


0


0


0


0


0


0






Total Heading 1: Single Market, Innovation and Digital






634






612






1 364 






2 072 






5 400 






8 895 






9 823 






21 329 






50 130 






2


Regional Development (ERDF)


1 204 


17


3 059 


4 663 


8 258 


14 118 


14 931 


39 710 


85 960 




 


Cohesion Fund


167


—


1 046 


1 594 


2 598 


2 451 


1 203 


6 140 


15 198 




 


Cohesion Fund contrib. to CEF-Transport


293


355


577


598


1 234 


1 600 


495


1 496 


6 648 




 


Pilot projects and prep. actions


—


—


0


1


—


2


1


3


6




 


European Social Fund Plus (ESF+)


458


135


1 356 


2 060 


3 147 


6 355 


12 725 


20 252 


46 489 




 


Support to Turkish-Cypriot Community


3


14


2


3


11


16


24


32


107




 


European Recovery and Resilience


—


—


0


0


3


9


30 554 


110 470 


141 037 




 


Pericles IV


—


—


—


—


0


0


0


0


1




 


EU Recovery


—


—


—


—


—


—


—


29


29




 


RescEU


—


0


1


2


16


191


215


725


1 150 




 


EU4Health


0


0


2


6


15


22


218


799


1 063 




 


Emergency support within the Union (ESI)


—


—


—


—


—


20


22


19


62




 


Decentralised agencies


—


—


1


4


1


4


9


15


35




 


Pilot projects and prep. actions


—


0


—


—


—


—


—


—


0




 


Actions under prerogatives of Commission


—


—


—


—


0


0


1


9


10




 


Employment and Social Innovation


1


1


2


3


19


26


50


72


174




 


Erasmus+


0


1


1


34


121


312


372


1 030 


1 870 




 


European Solidarity Corps (ESC)


2


—


0


8


31


36


31


57


166




 


Creative Europe


—


—


0


5


13


43


111


310


483




 


Justice


0


—


7


5


6


8


15


22


63




 


Rights and Values


—


4


5


5


9


21


33


134


213




 


Decentralised agencies


—


—


—


—


—


1


27


13


41




 


Other actions


0


—


—


0


0


1


3


8


12




 


Pilot projects and prep. actions


—


0


—


1


5


13


15


34


68




 


Actions under prerogatives of Commission


1


0


1


3


7


18


34


134


197






Total Heading 2: Cohesion, Resilience and Values






2 129 






528






6 063 






8 997 






15 494 






25 268 






61 090 






181 512 






301 081 






3


Agricultural Guarantees


—


—


—


16


39


59


96


147


357




 


Other progr. of Natural Resources and Environment


0


0


0


0


0


0


0


0


0




 


Agricultural Fund for Rural Development


1 332 


1 042 


783


784


1 388 


5 383 


12 887 


17 771 


41 369 




 


Maritime and Fisheries


56


1


137


174


650


856


163


1 138 


3 173 




 


Fisheries (SFPA and RFMO)


—


—


1


—


—


2


7


14


24




 


Decentralised agencies


—


—


—


—


—


—


—


—


—




 


Pilot projects and prep. actions


—


—


—


1


2


1


—


1


5




 


Environment and Climate (LIFE)


96


58


96


300


270


326


484


724


2 353 




 


Just Transition Fund


—


—


—


—


—


—


1


6 142 


6 143 




 


Loan facility under Just Transition Mechanism


—


—


—


—


—


—


—


10


10




 


Decentralised agencies


—


—


—


—


—


—


1


3


3




 


Pilot projects and prep. actions


—


0


0


1


0


11


2


7


21






Total Heading 3: Natural Resources and Environment






1 484 






1 100 






1 017 






1 275 






2 349 






6 638 






13 640 






25 957 






53 459 






4


Asylum, Migration and Integration


—


17


98


135


316


645


272


783


2 265 




 


Decentralised agencies


—


—


—


—


—


—


—


18


18




 


Pilot projects and prep. actions


—


—


—


—


—


—


—


—


—




 


Border Mngmt. (IBMF) — Border mngmt and visa


17


9


8


36


243


381


124


427


1 244 




 


Border Mngmt. (IBMF) — Customs equipment


—


—


—


—


—


—


72


65


137




 


Decentralised agencies


—


—


—


—


—


—


94


250


344






Total Heading 4: Migration and Border Management






17






26






105






170






559






1 025 






562






1 543 






4 008 






5


Internal Security Fund (ISF)


1


1


20


25


47


95


32


183


403




 


Nuclear decommissioning


2


8


63


64


64


66


73


99


439




 


Nuclear Safety and decommissioning


25


1


27


44


49


85


48


38


316




 


Decentralised agencies


—


—


—


—


—


—


—


—


—




 


Pilot projects and prep. actions


—


—


—


—


—


1


—


—


1




 


Actions under prerogatives of Commission


0


0


0


0


0


2


6


15


25




 


European Defence (Research)


—


—


—


—


—


—


170


321


492




 


European Defence (Non Research)


—


—


—


—


42


71


359


568


1 040 




 


Military Mobility


—


—


—


—


—


—


113


230


343




 


Pilot projects and prep. actions


—


—


—


0


1


—


—


—


2






Total Heading 5: Security and Defence






28






9






111






134






204






320






801






1 455 






3 061 






6


Neighbourhood, Developm. and Intl. Cooperation


803


589


1 010 


1 757 


2 325 


3 356 


6 509 


11 279 


27 629 




 


Instrument for Nuclear Safety (EINS)


2


3


8


19


16


25


30


39


142




 


Humanitarian Aid (HUMA)


0


0


0


1


26


55


341


706


1 128 




 


Common Foreign and Security Policy (CFSP)


—


0


2


2


18


24


33


58


136




 


Overseas Countries and Territories (OCT)


—


—


—


—


3


—


33


71


107




 


Other actions


—


—


—


—


—


—


0


15


16




 


Pilot projects and prep. actions


1


0


0


0


0


—


—


—


1




 


Actions under prerogatives of Commission


0


—


1


1


7


25


44


69


148




 


Pre-Accession Assistance (IPA III)


346


222


343


712


1 549 


968


1 421 


2 096 


7 655 




 


Pilot projects and prep. actions


0


0


0


0


0


0


0


0


0






Total Heading 6: Neighbourhood and the World






1 152 






814






1 365 






2 492 






3 943 






4 452 






8 411 






14 333 






36 962 






7


Staff Pensions


—


—


—


—


—


—


—


0


0




 


(Pensions former Members) EP


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) ECC


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) Commission


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) CJEU


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) ECA


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) Ombudsman


—


—


—


—


—


—


—


—


—




 


(Pensions former Members) EDPS


—


—


—


—


—


—


—


—


—




 


European schools


—


—


—


—


—


—


—


1


1




 


Remuneration statutory staff


—


—


—


—


—


—


—


0


0




 


Remuneration external staff


—


—


—


—


—


—


—


43


43




 


Members — Salaries and allowances


—


—


—


—


—


—


—


0


0




 


Members — Temporary allowances


—


—


—


—


—


—


—


—


—




 


Recruitment costs


—


—


—


—


—


—


—


4


4




 


Termination of service


—


—


—


—


—


—


—


—


—




 


Training costs


—


—


—


—


—


—


—


11


11




 


Social and Mobility


—


—


—


—


—


—


0


16


16




 


Information and comm. technology


—


—


—


—


—


—


—


155


155




 


Rents and purchases


—


—


—


—


—


—


—


2


2




 


Linked to buildings


—


—


—


—


—


—


—


69


69




 


Security


—


—


—


—


—


—


—


33


33




 


Mission and representation


—


—


—


—


—


—


—


11


11




 


Meetings, committees, conference


—


—


—


—


—


—


—


7


7




 


Official Journal


—


—


—


—


—


—


—


0


0




 


Publications


—


—


—


—


—


—


—


7


7




 


Acquisition of information


—


—


—


—


—


—


—


2


2




 


Studies and investigations


—


—


—


—


—


—


—


3


3




 


General equipment, vehicle, furniture


—


—


—


—


—


—


—


15


15




 


Linguistic external services


—


—


—


—


—


—


—


5


5




 


Other administrative expenditure


—


—


—


—


—


—


—


8


8




 


Pilot projects and prep. actions


—


—


—


—


0


—


—


—


0




 


Administrative expenditure of Other Institutions


0


0


0


0


0


0


0


654


654






Total Heading 7: European Public Administration






—






—






—






—






0






—






0






1 048 






1 048 






O


Innovation Fund (IF)


—


—


—


—


—


—


125


2 943 


3 068 




 


Other actions


—


—


—


—


—


0


2


1


3






Total Heading O: Outside MFF






—






—






—






—






—






0






127






2 944 






3 071 






S


Solidarity and Emergency Aid (SEAR)


—


—


—


—


—


—


—


—


—




 


European Globalisation Adjustment (EGF)


—


—


—


—


—


—


—


0


0




 


Brexit Adjustment Reserve


—


—


—


—


—


—


—


—


—






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






—






—






—






—






—






—






—






0






0







Total




5 445 




3 090 




10 025 




15 140 




27 949 




46 599 




94 453 




250 120 




452 821 





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.
6.12.   DETAILED MFF: OUTSTANDING COMMITMENTS BY APPROPRIATIONS TYPE


















(EUR million)




Heading


From budget appropriations


From assigned revenue appropriations


Total commitm. outstanding at the end of 2022




Commitm. carried forward from 2021


Adjustments


Commitm. made


Payments made


Amount remaining to be settled


Commitm. carried forward from 2021


Adjustments


Commitm. made


Payments made


Amount remaining to be settled




1


2


3


4


5=1+2+3-4


6


7


8


9


10=6+7+8-9


11=5+10




1


Horizon Europe


22 848 


(325)


12 469 


12 020 


22 971 


4 723 


(68)


2 840 


2 814 


4 681 


27 653 




 


Euratom


261


(12)


270


273


245


57


(11)


26


12


59


303




 


Thermonuclear Experimental Reactor (ITER)


1 268 


(1)


710


544


1 433 


45


—


16


60


0


1 433 




 


Other actions


0


0


—


—


—


106


(8)


61


64


95


95




 


Pilot projects and prep. actions


22


(1)


17


8


30


0


0


0


0


0


30




 


InvestEU Fund


2 006 


(28)


1 197 


850


2 325 


2 048 


(2)


2 151 


1 813 


2 383 


4 708 




 


CEF — Transport


7 050 


(142)


1 799 


1 920 


6 787 


132


(5)


2


54


75


6 862 




 


CEF — Energy


3 852 


(66)


797


639


3 944 


52


(1)


4


5


50


3 994 




 


CEF — Digital


433


(5)


249


136


541


3


(0)


—


1


2


543




 


Digital Europe


1 109 


(0)


1 233 


750


1 592 


30


(0)


31


32


30


1 622 




 


Decentralised agencies


36


—


206


192


49


—


—


10


8


1


51




 


Pilot projects and prep. actions


52


(1)


7


14


43


0


0


0


0


0


43




 


Actions under prerogatives of Commission


36


(2)


22


22


34


5


(0)


3


3


5


39




 


Single Market


924


(53)


688


542


1 017 


26


(1)


21


18


28


1 045 




 


EU Anti-Fraud


33


(0)


24


23


34


0


—


0


0


0


34




 


Taxation


31


(1)


37


27


40


2


(0)


1


1


2


42




 


Customs


121


(3)


130


111


137


1


(0)


4


2


3


141




 


Decentralised agencies


—


—


116


116


—


—


—


7


7


0


0




 


Other actions


6


(0)


10


9


7


0


(0)


0


0


—


7




 


Pilot projects and prep. actions


16


(1)


17


7


25


0


0


0


0


0


25




 


European Space Programme


1 222 


(1)


2 008 


1 961 


1 268 


147


(2)


77


50


172


1 439 




 


Decentralised agencies


15


—


68


65


18


—


—


2


0


2


20






Total Heading 1: Single Market, Innovation and Digital






41 340 






(643)






22 073 






20 229 






42 541 






7 377 






(100)






5 257 






4 945 






7 588 






50 130 






2


Regional Development (ERDF)


49 100 


(74)


36 556 


31 267 


54 315 


35 049 


(13)


7 799 


11 192 


31 644 


85 960 




 


Cohesion Fund


13 421 


(16)


6 220 


9 495 


10 130 


4 981 


(0)


601


514


5 068 


15 198 




 


Cohesion Fund contrib. to CEF-Transport


7 023 


(29)


1 494 


1 854 


6 634 


3


(0)


12


1


14


6 648 




 


Pilot projects and prep. actions


7


(1)


3


2


6


0


0


0


0


0


6




 


European Social Fund Plus (ESF+)


21 930 


(23)


15 886 


14 936 


22 858 


21 326 


(0)


6 060 


3 755 


23 631 


46 489 




 


Support to Turkish-Cypriot Community


113


(2)


34


40


104


4


(0)


1


2


3


107




 


European Recovery and Resilience


141


(3)


119


97


160


51 660 


(1)


136 396 


47 178 


140 877 


141 037 




 


Pericles IV


1


(0)


1


1


1


0


—


0


0


0


1




 


EU Recovery


2


(0)


74


47


29


—


—


0


0


0


29




 


RescEU


432


(5)


354


225


557


164


(3)


760


328


593


1 150 




 


EU4Health


402


(10)


839


192


1 039 


10


(1)


21


6


24


1 063 




 


Emergency support within the Union (ESI)


191


(14)


—


135


43


0


—


343


324


19


62




 


Decentralised agencies


19


—


284


269


34


0


—


15


15


0


35




 


Pilot projects and prep. actions


1


(0)


—


1


0


0


0


0


0


0


0




 


Actions under prerogatives of Commission


9


(0)


13


11


10


0


(0)


—


0


—


10




 


Employment and Social Innovation


180


(12)


86


87


167


7


(0)


3


4


6


174




 


Erasmus+


1 526 


(29)


3 406 


3 257 


1 646 


239


(8)


211


217


225


1 870 




 


European Solidarity Corps (ESC)


144


(3)


141


133


149


4


(0)


13


1


16


166




 


Creative Europe


386


(11)


407


313


469


14


(1)


13


12


14


483




 


Justice


74


(13)


44


44


60


0


(0)


6


3


3


63




 


Rights and Values


156


(5)


215


154


212


1


(0)


1


1


1


213




 


Decentralised agencies


31


(1)


245


235


40


1


(1)


3


3


0


41




 


Other actions


10


(0)


8


7


11


0


(0)


1


0


1


12




 


Pilot projects and prep. actions


83


(2)


35


48


68


0


—


—


—


0


68




 


Actions under prerogatives of Commission


186


(8)


181


165


194


1


(0)


3


0


3


197






Total Heading 2: Cohesion, Resilience and Values






95 569 






(263)






66 644 






63 014 






98 937 






113 465 






(27)






152 263 






63 556 






202 144 






301 081 






3


Agricultural Guarantees


334


(6)


40 552 


40 523 


357


—


—


629


629


0


357




 


Agricultural Fund for Rural Development


35 914 


(17)


12 728 


14 000 


34 625 


2 300 


—


5 689 


1 244 


6 745 


41 369 




 


Maritime and Fisheries


2 397 


(38)


1 131 


917


2 573 


525


(0)


75


0


600


3 173 




 


Fisheries (SFPA and RFMO)


23


—


159


159


24


0


0


0


0


0


24




 


Decentralised agencies


—


—


29


29


—


—


—


1


1


—


—




 


Pilot projects and prep. actions


9


(0)


1


5


5


0


0


0


0


0


5




 


Environment and Climate (LIFE)


2 148 


(29)


755


528


2 347 


6


(0)


3


2


7


2 353 




 


Just Transition Fund


3


(1)


1 327 


1


1 327 


5


(4)


4 982 


167


4 816 


6 143 




 


Loan facility under Just Transition Mechanism


0


0


—


—


—


—


—


11


1


10


10




 


Decentralised agencies


3


—


54


54


3


0


—


7


6


0


3




 


Pilot projects and prep. actions


24


(2)


8


9


21


0


0


0


0


0


21






Total Heading 3: Natural Resources and Environment






40 854 






(93)






56 746 






56 225 






41 281 






2 837 






(5)






11 396 






2 051 






12 178 






53 459 






4


Asylum, Migration and Integration


2 335 


(18)


1 393 


1 460 


2 250 


28


(1)


9


19


16


2 265 




 


Decentralised agencies


20


(20)


166


148


18


—


—


18


18


—


18




 


Pilot projects and prep. actions


0


(0)


—


—


—


0


0


0


0


0


—




 


Border Mngmt. (IBMF) — Border mngmt and visa


949


(11)


748


624


1 063 


192


(0)


8


18


181


1 244 




 


Border Mngmt. (IBMF) — Customs equipment


135


—


138


137


137


0


0


0


0


0


137




 


Decentralised agencies


321


(0)


952


928


344


0


—


16


16


—


344






Total Heading 4: Migration and Border Management






3 760 






(49)






3 397 






3 297 






3 811 






219






(2)






50






71






197






4 008 






5


Internal Security Fund (ISF)


352


(16)


251


191


396


9


(0)


4


5


8


403




 


Nuclear decommissioning


377


—


99


37


439


0


0


0


0


0


439




 


Nuclear Safety and decommissioning


315


(2)


44


41


316


0


—


0


0


0


316




 


Decentralised agencies


0


(0)


217


217


—


—


—


4


4


—


—




 


Pilot projects and prep. actions


1


—


—


—


1


0


0


0


0


0


1




 


Actions under prerogatives of Commission


24


(2)


22


18


25


0


—


0


0


0


25




 


European Defence (Research)


322


(0)


318


161


479


7


(0)


7


2


12


492




 


European Defence (Non Research)


746


(1)


627


348


1 024 


17


—


15


15


16


1 040 




 


Military Mobility


226


—


232


114


343


0


0


0


0


0


343




 


Pilot projects and prep. actions


2


—


—


—


2


0


0


0


0


0


2






Total Heading 5: Security and Defence






2 364 






(21)






1 809 






1 128 






3 025 






33






(0)






30






27






36






3 061 






6


Neighbourhood, Developm. and Intl. Cooperation


23 259 


(1 004 )


14 452 


9 285 


27 423 


194


(18)


146


115


206


27 629 




 


Instrument for Nuclear Safety (EINS)


127


(8)


39


19


139


1


—


2


—


3


142




 


Humanitarian Aid (HUMA)


1 052 


(3)


2 481 


2 418 


1 113 


31


(4)


16


28


15


1 128 




 


Common Foreign and Security Policy (CFSP)


146


(20)


362


372


116


32


(0)


25


37


20


136




 


Overseas Countries and Territories (OCT)


65


(0)


72


30


107


0


0


0


0


0


107




 


Other actions


0


(0)


50


35


16


0


0


0


0


0


16




 


Pilot projects and prep. actions


2


(0)


—


0


1


0


0


0


0


0


1




 


Actions under prerogatives of Commission


154


(8)


95


92


148


0


—


0


0


0


148




 


Pre-Accession Assistance (IPA III)


6 860 


(138)


2 320 


1 829 


7 213 


610


(1)


94


261


442


7 655 






Total Heading 6: Neighbourhood and the World






31 666 






(1 181 )






19 870 






14 079 






36 275 






869






(24)






283






442






687






36 962 






7


Staff Pensions


—


—


2 162 


2 162 


—


—


—


236


236


0


0




 


(Pensions former Members) EP


—


—


12


12


—


0


0


0


0


0


—




 


(Pensions former Members) ECC


—


—


1


1


—


0


0


0


0


0


—




 


(Pensions former Members) Commission


—


—


8


8


—


0


0


0


0


0


—




 


(Pensions former Members) CJEU


—


—


13


13


—


0


0


0


0


0


—




 


(Pensions former Members) ECA


—


—


6


6


—


0


0


0


0


0


—




 


(Pensions former Members) Ombudsman


—


—


0


0


—


0


0


0


0


0


—




 


(Pensions former Members) EDPS


—


—


0


0


—


0


0


0


0


0


—




 


European schools


0


—


215


216


0


2


—


19


20


1


1




 


Remuneration statutory staff


0


(0)


2 629 


2 629 


0


—


—


36


36


—


0




 


Remuneration external staff


38


(4)


253


244


42


2


(1)


33


33


1


43




 


Members — Salaries and allowances


2


(1)


15


15


0


—


—


0


0


—


0




 


Members — Temporary allowances


—


—


2


2


—


0


0


0


0


0


—




 


Recruitment costs


2


(0)


31


30


3


0


—


0


1


0


4




 


Termination of service


—


—


9


9


—


0


0


0


0


0


—




 


Training costs


11


(2)


17


18


9


1


(0)


3


3


2


11




 


Social and Mobility


8


(1)


22


20


9


7


(1)


17


15


8


16




 


Information and comm. technology


143


(3)


255


269


126


20


(0)


59


50


29


155




 


Rents and purchases


18


(0)


289


306


0


0


—


34


33


2


2




 


Linked to buildings


39


(2)


131


109


60


12


(0)


21


23


9


69




 


Security


28


(1)


64


65


26


4


(0)


12


8


7


33




 


Mission and representation


11


(8)


50


42


11


0


(0)


2


2


0


11




 


Meetings, committees, conference


3


(3)


12


6


7


1


(0)


1


1


0


7




 


Official Journal


1


(0)


2


2


0


0


0


0


0


0


0




 


Publications


6


(0)


13


14


6


1


(0)


3


3


1


7




 


Acquisition of information


2


(0)


4


4


2


0


(0)


0


0


0


2




 


Studies and investigations


4


(0)


3


5


3


0


—


0


0


0


3




 


General equipment, vehicle, furniture


11


(1)


20


17


14


2


(0)


5


5


2


15




 


Linguistic external services


4


(0)


31


31


4


1


(0)


33


32


2


5




 


Other administrative expenditure


6


(1)


17


18


5


2


(0)


11


9


4


8




 


Pilot projects and prep. actions


0


(0)


—


0


0


0


0


0


0


0


0




 


Administrative expenditure of Other Institutions


630


(22)


4 465 


4 468 


606


53


(56)


384


333


48


654






Total Heading 7: European Public Administration






968






(48)






10 754 






10 741 






932






107






(60)






911






842






116






1 048 






O


Innovation Fund (IF)


0


0


—


—


—


138


(3)


2 953 


21


3 068 


3 068 




 


Other actions


0


0


—


—


—


8


(7)


53


52


3


3






Total Heading O: Outside MFF






0






0






—






—






—






147






(9)






3 006 






72






3 071 






3 071 






S


Solidarity and Emergency Aid (SEAR)


—


—


30


30


—


0


0


0


0


0


—




 


European Globalisation Adjustment (EGF)


—


—


28


28


0


0


0


0


0


0


0




 


Brexit Adjustment Reserve


—


—


2 544 


2 544 


—


0


0


0


0


0


—






Total Heading S: Solidarity mechanisms within and outside the Union (Special instruments)






—






—






2 602 






2 602 






0






0






0






0






0






0






0







Total




216 522 




(2 298 )




183 894 




171 315 




226 803 




125 053 




(227)




173 196 




72 005 




226 018 




452 821 





7.   IMPLEMENTATION OF THE BUDGET BY INSTITUTION
7.1.   IMPLEMENTATION OF BUDGET REVENUE
















(EUR million)




 


Income appropriations


Entitlements established


Revenue


Receipts as % of budget


Outstanding




Institution


Initial adopted budget


Final adopted budget


Current year


Carried over


Total


On entitlements of current year


On entitlements carried over


Total




 


1


2


3


4


5=3+4


6


7


8=6+7


9=8/2


10=5-8




European Parliament


181


181


236


27


263


234


16


250


138 %


13




European Council and Council


61


61


95


2


97


93


1


94


154 %


3




Commission


170 195 


169 630 


242 422 


25 437 


267 859 


236 217 


8 187 


244 404 


144 %


23 455 




Court of Justice


63


63


63


0


63


63


0


63


99 %


0




Court of Auditors


25


25


25


0


25


25


0


25


102 %


0




Economic and Social Committee


13


13


19


0


19


19


0


19


141 %


0




Committee of the Regions


11


11


14


0


14


14


0


14


124 %


—




Ombudsman


1


1


1


0


1


1


0


1


104 %


—




European Data Protection Supervisor


2


2


2


0


2


2


0


2


100 %


—




European External Action Service


50


50


393


0


393


392


0


392


782 %


1





Total




170 603 




170 038 




243 269 




25 467 




268 736 




237 059 




8 205 




245 265 




144 %




23 471 





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 221,7 million (2021: EUR 193,6 million) and the EDF legacy and the Trust Funds of EUR 19,6 million (2021: EUR 18,7 million). These contributions cover the costs of the Commission’s staff in the delegations financed under the EDF and the Trust Funds, including assigned revenue generated during the year from these contributions.
7.2.   IMPLEMENTATION OF COMMITMENT APPROPRIATIONS



















(EUR million)




 


Total appropriat. available


Commitments made


Appropriations carried over to 2023


Appropriations lapsing




Institution


from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budget


from carry-overs


from assigned revenue


Total




 


1


2


3


4


5=2+3+4


6=5/1


7


8


9=7+8


10


11


12


13=10+ 11+12




European Parliament


2 275 


2 151 


21


45


2 218 


97 %


—


46


46


10


1


0


11




European Council and Council


683


599


0


43


641


94 %


0


29


29


13


0


0


13




Commission


476 635 


174 981 


4 448 


172 812 


352 241 


74 %


1 451 


121 371 


122 821 


1 311 


11


252


1 573 




Court of Justice


469


461


0


1


462


98 %


0


0


0


7


0


0


7




Court of Auditors


162


160


0


0


160


98 %


1


0


1


2


0


0


2




Economic and Social Committee


162


147


0


9


155


96 %


0


1


1


6


0


0


6




Committee of Regions


113


109


0


2


111


98 %


0


1


1


1


0


0


1




Ombudsman


12


12


0


—


12


97 %


0


—


—


0


0


—


0




European Data Protection Supervisor


20


20


0


0


20


98 %


0


0


0


0


0


—


0




European External Action Service


1 144 


787


—


285


1 072 


94 %


0


72


72


0


—


0


0





Total




481 676 




179 425 




4 469 




173 196 




357 091 




74 %




1 451 




121 520 




122 971 




1 351 




12




252




1 614 





7.3.   IMPLEMENTATION OF PAYMENT APPROPRIATIONS



















(EUR million)




 


Total approp. available


Payments made


Appropriations carried over to 2023


Appropriations lapsing




Institution


from final adopted budget


from carry-overs


from assigned revenue


Total


%


from final adopted budget


from assigned revenue


Total


from final adopted budget


from carry-overs


from assigned revenue


Total




 


1


2


3


4


5=2+3+4


6=5/1


7


8


9=7+8


10


11


12


13




European Parliament


2 665 


1 801 


344


42


2 187 


82 %


372


57


429


10


37


2


49




European Council and Council


745


521


54


41


616


83 %


77


30


107


13


8


1


22




Commission


255 646 


163 451 


3 565 


71 504 


238 520 


93 %


1 855 


14 944 


16 799 


247


75


4


326




Court of Justice


499


423


26


1


450


90 %


37


0


38


7


4


0


12




Court of Auditors


171


152


8


0


160


94 %


9


0


9


2


0


0


2




Economic and Social Committee


183


134


16


5


155


85 %


12


5


17


6


5


0


11




Committee of Regions


128


97


12


1


110


86 %


12


1


14


1


3


0


4




Ombudsman


14


11


2


—


13


93 %


0


—


0


0


0


—


0




European Data Protection Supervisor


21


18


1


0


19


88 %


2


0


2


0


0


—


1




European External Action Service


1 299 


713


136


242


1 091 


84 %


74


115


189


0


18


0


19





Total




261 370 




167 321 




4 163 




71 837 




243 321 




93 %




2 452 




15 152 




17 604 




287




151




7




445





8.   IMPLEMENTATION OF THE AGENCIES’ BUDGETS
The agencies’ revenue and expenditure, as shown in the reports 8.1 and 8.2 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 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 (8.1) and expenditure (8.2).
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.
8.1.   BUDGET REVENUE









(EUR million)




Agency


Funding MFF heading


Final adopted budget


Revenue received




Agency for the Cooperation of Energy Regulators


1


25


25




Agency for the Operational Management of Large-Scale IT Systems


4


297


339




Body of European Regulators for Electronic Communications


1


7


8




Community Plant Variety Office


N/A


21


18




European Agency for Safety and Health at Work


2b


16


16




European Asylum Support Office


4


172


175




European Aviation Safety Agency


1


224


174




European Banking Authority


1


50


51




European Border and Coast Guard Agency


4


693


705




European Centre for Disease Prevention and Control


2b


96


103




European Centre for the Development of Vocational Training


2b


19


18




European Chemicals Agency


1


115


123




European Climate, Infrastructure and Environment Executive Agency


1, 2a, 3, 5


56


56




European Education and Culture Executive Agency


2b, 6


61


59




European Environment Agency


3


85


81




European Fisheries Control Agency


3


29


35




European Food Safety Authority


2b


135


135




European Foundation for the Improvement of Living and Working Conditions


2b


22


22




European Health and Digital Executive Agency


1, 2b


42


42




European Innovation Council and SMEs Executive Agency


1, 2a


45


46




European Institute for Gender Equality


2b


8


8




European Institute of Innovation and Technology


1


436


449




European Insurance and Occupational Pensions Authority


1


35


35




European Labour Authority


2b


35


26




European Maritime Safety Agency


1


87


116




European Medicines Agency


2b


422


436




European Monitoring Centre for Drugs and Drug Addiction


5


18


19




European Public Prosecutor’s Office


2b


108


51




European Research Council Executive Agency


1


59


59




European Research Executive Agency


1, 3


99


99




European Securities and Markets Authority


1


68


68




European Training Foundation


2b


22


24




European Union Agency for Criminal Justice Cooperation


2b


95


56




European Union Agency for Cybersecurity


1


24


24




European Union Agency for Law Enforcement Cooperation


5


193


201




European Union Agency for Law Enforcement Training


5


11


14




European Union Agency for Railways


1


35


35




European Union Agency for the Space Programme


1


65


1 157 




European Union Fundamental Rights Agency


2b


26


26




European Union Intellectual Property Office


N/A


287


304




Fusion for Energy Joint Undertaking


1


605


831




Translation Centre for the Bodies of the European Union


7


50


44





Total



 



4 997 




6 316 














(EUR million)




Type of agencies revenue


Amounts received




Commission subsidy


3 133 




Fee income


867




Other income


2 316 





Total




6 316 





8.2.   COMMITMENT AND PAYMENT APPROPRIATIONS BY AGENCY










(EUR million)




 


Commitment appropriations


Payment appropriations




Agency


Total appropr. available


Commit. made


Total appropr. available


Payments made




Agency for the Cooperation of Energy Regulators


25


25


31


24




Agency for the Operational Management of Large-Scale IT Systems


378


291


367


268




Body of European Regulators for Electronic Communications


8


8


10


8




Community Plant Variety Office


22


19


21


19




European Agency for Safety and Health at Work


17


16


22


17




European Asylum Support Office


219


182


207


154




European Aviation Safety Agency


297


218


310


170




European Banking Authority


51


50


58


51




European Border and Coast Guard Agency


707


694


956


559




European Centre for Disease Prevention and Control


113


103


172


121




European Centre for the Development of Vocational Training


19


19


19


18




European Chemicals Agency


123


118


137


115




European Climate, Infrastructure and Environment Executive Agency


56


54


59


52




European Education and Culture Executive Agency


59


59


66


59




European Environment Agency


89


72


109


72




European Fisheries Control Agency


36


31


41


23




European Food Safety Authority


151


151


149


134




European Foundation for the Improvement of Living and Working Conditions


23


23


27


22




European Health and Digital Executive Agency


42


41


47


43




European Innovation Council and SMEs Executive Agency


46


46


49


43




European Institute for Gender Equality


9


8


11


9




European Institute of Innovation and Technology


410


384


454


440




European Insurance and Occupational Pensions Authority


35


35


42


39




European Labour Authority


35


33


39


22




European Maritime Safety Agency


123


109


137


110




European Medicines Agency


452


431


539


410




European Monitoring Centre for Drugs and Drug Addiction


20


19


21


20




European Public Prosecutor’s Office


51


50


58


45




European Research Council Executive Agency


59


59


62


59




European Research Executive Agency


99


98


107


100




European Securities and Markets Authority


69


67


75


67




European Training Foundation


25


23


26


23




European Union Agency for Criminal Justice Cooperation


62


55


67


54




European Union Agency for Cybersecurity


39


39


44


25




European Union Agency for Law Enforcement Cooperation


210


198


238


188




European Union Agency for Law Enforcement Training


28


19


31


17




European Union Agency for Railways


39


37


39


35




European Union Agency for the Space Programme


3 801 


645


2 209 


1 321 




European Union Fundamental Rights Agency


26


25


34


26




European Union Intellectual Property Office


564


346


585


324




Fusion for Energy Joint Undertaking


981


704


844


766




Translation Centre for the Bodies of the European Union


50


44


54


45





Total




9 667 




5 649 




8 577 




6 119 

















(EUR million)




 


Commitment appropriations


Payment appropriations




Type of expenditure


Total appropr. available


Commit. made


Total appropr. available


Payments made




Administrative


512


486


636


458




Operational


7 410 


3 452 


6 161 


3 958 




Staff


1 745 


1 711 


1 780 


1 702 





Total




9 667 




5 649 




8 577 




6 119 





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 and declared definitely adopted by the President of the European Parliament.

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.

Available for sale financial assets

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 the total cost of legal obligations (contracts, grant agreements/ decisions) that could be signed in the current financial year.

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.

Effective interest rate

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 and liabilities at amortized cost

All financial assets and liabilities that are according to International Public Sector Accounting Standards measured at armotized cost.

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 irregular expenditure. For expenditure under shared management, the task of recovering irregular 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 the applicable EU or national rules and which has a potentially negative impact on the EU financial interests. Irregularities, which may be the result of the conduct of beneficiaries claiming funds or of the authorities responsible for making payments. The notion of irregularity is wider than that of fraud, which refers to conduct that may qualify as a criminal offence.

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.

Own resources

The main source of revenues for the EU budget. The different own resources are listed in the applicable Own Resource Decision (Decision (EU, Euratom) 2020/2053) and are traditional own resources, VAT-based own resource, GNI-based resource and non-recycled plastic packaging waste-based own resource.

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 instalments 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 three quarters of the EU expenditure falls under this implementation mode.

Traditional own resources

Traditional own resources are defined in the applicable Own Resources Decision (Council Decision (EU, Euratom) 2020/2053) and comprise namely 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.
LIST OF ABBREVIATIONS






AAR


Annual Activity Report




AC


Amortised Cost




AFS


Available For Sale




AMIF


Asylum, Migration and Integration Fund




AOD


Authorising Officers by Delegation




ATM


Air Traffic Management




BOP


Balance of Payments




BUFI Fund


Budget Fines Fund




CAP


Common Agricultural Policy




CCS LGF


Cultural and Creative Sector Guarantee Facility




CEF2


Connecting Europe Facility




CEF DI


Connecting Europe Facility Debt Instrument




CF


Cohesion Fund




CIP


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




CPF


Common Provisioning Fund




CPR


Common Provisions Regulation




CRII+


Coronavirus Response Investment Initiative Plus




D&WM


Decommissioning and Waste Management




EAD


Exposure At Default




EAFRD


European Agricultural Fund for Rural Development




EAGF


European Agricultural Guarantee Fund




EAR


European Union Accounting Rule




EaSI


Employment and Social Innovation




EBRD


European Bank for Reconstruction and Development




ECA


European Court of Auditors




ECB


European Central Bank




ECL


Expected Credit Losses




ECOFIN


Economic and Financial Affairs Council




ECSC i.L.


European Coal and Steel Community in Liquidation




EDF


European Development Fund




EDIF


Guarantee Facility under the Western Balkan




EEA


European Economic Area




EEAS


European External Action Service




EFSD


European Fund for Sustainable Development




EFSE


European Fund for Southeast Europe




EFSF


European Financial Stability Facility




EFSI


European Fund for Strategic Investments




EFSM


European Financial Stabilisation Mechanism




EFTA


European Free Trade Association




EGNOS


European Geostationary Navigation Overlay System




EIB


European Investment Bank




EIF


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


Enterprise Innovation Fund




ENPI


European Neighbourhood and Partnership Instrument




EP


European Parliament




ERDF


European Regional Development Fund




ERI


EIB Resilience Initiative




ESA


European Space Agency




ESF


European Social Fund




ESIF


European Structural and Investment Funds




ESM


European Stability Mechanism




ETF


Exchange-Traded Fund




EU


European Union




EUMETSAT


European Organisation for the Exploitation of Meteorological Satellites




Euratom


European Atomic Energy Community




FGC


Financial Guarantee Contract




FIFO


First-in, First-out




FP7


7th Research Framework Programme for Research and Technological Development




FR


EU Financial Regulation




FSDA


Financial Statement Discussion and Analysis




FVNA


Fair Value through Net Assets/Equity




FVSD


Fair Value through Surplus or Deficit




GDP


Gross Domestic Product




GNI


Gross National Income




GNSS


Global Navigation Satellite Systems




H2020


Horizon 2020




HLRCP


High Level Risk and Compliance Policy




IIW


Infrastructure and Innovation Window




IMF


International Monetary Fund




IPSAS


International Public Sector Accounting Standards




IF


Innovation Fund




IT


Information Technology




ITER


International Thermonuclear Experimental Reactor




JRC


Joint Research Centre




JU


Joint Undertaking




LGD


Loss given Default Rate




LGF


Loan Guarantee Facility




LGTT


Loan Guarantee Instrument for TEN-T projects




MAP


Multi Annual Program — Medium Enterprise Financial Inclusion Programme




MEP


Member of the European Parliament




MFA


Macro Financial Assistance




MFF


Multiannual Financial Framework




MMF


Money Market Fund




MSME


Micro, Small and Medium Enterprise




NDICI


Neighbourhood, Development and International Cooperation Instrument




NGEU


NextGenerationEU




ORD


Own Resources Decision




PBI


Project Bond Initiative




PD


Probability of Default




PF4EE


Private Finance for Energy Efficiency Instrument




PGF


Participants Guarantee Fund




PPP


Public-Private Partnership




PSEO


Pension Scheme of European Officials




RAL



                     ‘Reste à Liquider’ (Outstanding Commitments)




RRF


Recovery and Resilience Facility




RSFF


Risk Sharing Finance Facility




RTD


Research, Technological Development and Demonstration




S&P


Standard & Poor’s Financial Services LLC




SANAD


MENA Fund for Micro-, Small and Medium Enterprises




SAPARD


Special Accession Programme for Agriculture and Rural Development




SEMED


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




SICR


Significant Increase of Credit Risk




SIUGI


SME Initiative Uncapped Guarantee Instrument




SME


Small and Medium-sized Enterprise(s)




SMEW


SME Window (Small and Medium-sized Enterprises Window)




SURE


Support to mitigate Unemployment Risks in an Emergency




TFEU


Treaty on the Functioning of the European Union




TOR


Traditional own resources




TRDI


Temporary Rural Development Instrument




VAT


Value Added Tax






(1)  Commission Implementing Decision C(2021) 9336 final.

(2)  
            Maximum financial contribution calculated for each Member State following the update of 30 June 2022 in line with Article 11(2) of Regulation (EU) 2021/241 (before deduction of support expenditure), see
https://commission.europa.eu/document/c22c182c-f53e-453f-b45a-dacdcf2d69dd_en.

(1)  
            Maximum financial contribution calculated for each Member State following the update of 30 June 2022 in line with Article 11(2) of Regulation (EU) 2021/241 (before deduction of support expenditure), see https://commission.europa.eu/document/c22c182c-f53e-453f-b45a-dacdcf2d69dd_en


(†)  
            Budgetary commitments take into account all decommitments including those related to commitments made before 2022. Out of the total budgetary commitments EUR 136,4 billion was committed in 2022.


(3)  Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements (Recast) (OJ L 168, 7.6.2014, p. 39).

(4)  For a comprehensive overview of the NextGenerationEU (NGEU), please see also Sections 2.2 and 2.3 above.

(5)  The authorised amount for NGEU in 2022 concerned the 2022 support in the form of non-repayable support to Member States under the Recovery and Resilience Facility (RRF), the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) and the additional funding for other European programmes or funds (i.e. Rural Development, InvestEU Fund, Just Transition Fund, Horizon Europe and RescEU). The EURI Regulation sets legal deadlines with respect to the legal commitments while the programming distribution is established based on the planned schedule of annual commitments which are specifically mentioned in the legal bases of the programmes concerned.

(6)  Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument (EURI) to support the recovery in the aftermath of the COVID-19 crisis (OJ L 433 I, 22.12.2020, p. 23).

(7)  Article 212 of the Financial Regulation (EU, Euratom) 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, 30.7.2018, p. 1).

(8)  Decision (EU) 2022/313 of the European Parliament and the Council for EUR 1,2 billion providing emergency assistance to Ukraine, Decision (EU) 2022/1201 of the European Parliament and the Council for EUR 1,0 billion providing exceptional assistance to Ukraine, Decision (EU) 2022/1628 of the European Parliament and the Council for EUR 5,0 billion providing exceptional assistance to Ukraine.

(9)  Regulation (EU) 2022/2463 of the European Parliament and of the Council of 14 December 2022 establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +) (OJ L 322, 16.12.2022, p. 1).

(10)  
            2020 to 2022 figures: excluding revenue relating to the UK’s withdrawal from the EU.


(11)  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).

(12)  Regulation (EU, Euratom) 2018/1046.

(13)  See Article 317 TFEU.

(14)  C(2020) 4240 final of 24 June 2020.

(15)  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).

(16)  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 (INTPA (DEVCO), ECHO, EAC, EACEA and JRC).

(17)  https://ec.europa.eu/info/publications/integrated-financial-and-accountability-reporting_en

(2)  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.

(3)  
            The European Parliament adopted a budget on 23 November 2022 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 the following year. Additionally, under Article 83 of the Staff Regulations (Regulation (EEC, Euratom, ECSC) No 259/68 (OJ L 56, 4.3.1968, p. 1) of 29 February 1968 as amended), the Member States shall jointly guarantee the liability for pensions.


(18)  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).

(19)  Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (OJ L 76, 19.3.2018, p. 3).

(20)  Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010 (OJ L 348, 20.12.2013, p. 129).

(21)  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

(4)  Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1).

(5)  
            
               ‘Not-assigned to MFF heading’ includes consolidated entities' budget execution and consolidation eliminations, off-budget operations and unallocated programmes with individually immaterial amounts.


(22)  
            The EUR 2,7 billion of assets provisioned for the EIB ELM guarantees also cover borrowings under legacy MFA and Euratom (see note 4.1.2).


(23)  
            The EUR 2,7 billion of assets provisioned for the EIB ELM guarantees also cover borrowings under legacy MFA and Euratom (see note 4.1.2)


(24)  Decision (EU) 2018/412 of the European Parliament and of the Council of 14 March 2018 amending Decision No 466/2014/EU granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union (OJ L 76, 19.3.2018, p. 30).

(25)  Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument — Global Europe, amending and repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 480/2009 (OJ L 209, 14.6.2021, p. 1).

(26)  Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 establishing the InvestEU Programme and amending Regulation (EU) 2015/1017 (OJ L 107, 26.3.2021, p. 30).

(27)  Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).

(28)  Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17).

(29)  Council Decision (Euratom) 2021/281 of 22 February 2021 amending Decision 2007/198/Euratom establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it (OJ L 62, 23.2.2021, p. 41).

(30)  Regulation (EU) 2021/696 of the European Parliament and of the Council of 28 April 2021 establishing the Union Space Programme and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013 and (EU) No 377/2014 and Decision No 541/2014/EU (OJ L 170, 12.5.2021, p. 69).

(31)  Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing Horizon Europe — the Framework Programme for Research and Innovation, laying down its rules for participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (OJ L 170, 12.5.2021, p. 1).

(32)  Council Regulation (Euratom) 2021/765 of 10 May 2021 establishing the Research and Training Programme of the European Atomic Energy Community for the period 2021-2025 complementing Horizon Europe — the Framework Programme for Research and Innovation and repealing Regulation (Euratom) 2018/1563 (OJ L 167 I , 12.5.2021, p. 81)

(33)  Regulation (EU) 2021/1755 of the European Parliament and of the Council of 6 October 2021 establishing the Brexit Adjustment Reserve (OJ L 357, 8.10.2021, p. 1).

(34)  Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (OJ L 311, 14.11.2002, p. 3)

(35)  Regulation (EU) No 661/2014 of the European Parliament and of the Council of 15 May 2014 amending Council Regulation (EC) No 2012/2002 establishing the European Union Solidarity Fund (OJ L 189, 27.6.2014, p. 143).

(36)  Regulation (EU) 2020/461 of the European Parliament and of the Council of 30 March 2020 amending Council Regulation (EC) No 2012/2002 in order to provide financial assistance to Member States and to countries negotiating their accession to the Union that are seriously affected by a major public health emergency (OJ L 99, 31.3.2020, p. 9).

(37)  Regulation (EU) 2021/1153 of the European Parliament and of the Council of 7 July 2021 establishing the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014 (OJ L 249, 14.7.2021, p. 38).

(38)  Regulation (EU) 2018/1718 of the European Parliament and of the Council of 14 November 2018 amending Regulation (EC) No 726/2004 as regards the location of the seat of the European Medicines Agency (OJ L 291, 16.11.2018, p. 3).

(39)  https://commission.europa.eu/system/files/2022-01/high_level_risk_and_compliance_policy_hlrcp_formatted.pdf

(40)  Decision C(2021) 2502 was repealed and replaced with Decision C(2022) 9700.

(41)  Council Regulation (EU, Euratom) 2016/804 of 17 May 2016 amending Regulation (EU, Euratom) No 609/2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements (OJ L 132, 21.5.2016, p. 85).

(6)  
            Excluding loans for RRF (NGEU) and for financial assistance.


(7)  
            Excluding deferred charges.


(42)  
            Excluding deferred charges.


(43)  For example in the Working Document XI attached to the Draft Budget that presents the implementation of Budgetary Guarantees, the Common Provisioning Fund and the assessment of the sustainability of the contingent liabilities arising from budgetary guarantees and financial assistance pursuant to Article 41(5) of the Financial Regulation.

(44)  The risk of guarantees on equity is based on the notional amount that is covered by the guarantee.

(8)  
            With correction coefficient (‘CC’) applied.


(9)  
            Paid for the first 3 years following departure.


(45)  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.

(46)  Council Regulation (EU, Euratom) No 608/2014 of 26 May 2014 laying down implementing measures for the system of own resources of the European Union (OJ L 168, 7.6.2014, p. 29).

(47)  Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027 (OJ L 433 I, 22.12.2020, p. 11).

(48)  Technical adjustment of the financial framework for 2023 in accordance with Article 4 of Council Regulation (EU, Euratom) 2021/365 laying down the multiannual financial framework for the years 2021 to 2027, COM(2022) 266 final, 7.6.2022.

(49)  Technical adjustment of the financial framework for 2022 in accordance with Article 4 of Council Regulation (EU, Euratom) 2021/365 laying down the multiannual financial framework for the years 2021 to 2027, COM(2021) 365 final, 7.6.2021.

(50)  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1).

(51)  Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (OJ L 24, 29.1.2004, p. 1).

(52)  Adjustment of the multiannual financial framework in accordance with Article 7 of Council Regulation (EU, Euratom) 2020/2093 lying down the multiannual financial framework for the years 2021 to 2027, COM(2022) 80 final, 28.2.2022.

(53)  Council Regulation (EU) 2020/2094.

(54)  This MFF programme includes the complementary financial envelope from the NextGenerationEU for the REACT-EU package. Please consult the Chapter 1.1 Multiannual Financial Framework 2021–2027 of the Notes to the Budgetary Implementation Reports. The paragraph on Heading 2 details the contribution of this MFF programme to the REACT-EU package.

(55)  This MFF programme includes the complementary financial envelope from the NextGenerationEU for the REACT-EU package. Please consult the Chapter 1.1 Multiannual Financial Framework 2021–2027 of the Notes to the Budgetary Implementation Reports. The paragraph on Heading 2 details the contribution of this MFF programme to the REACT-EU package.

(56)  This MFF programme includes the complementary financial envelope from the NextGenerationEU for the REACT-EU package. Please consult the Chapter 1.1 Multiannual Financial Framework 2021–2027 of the Notes to the Budgetary Implementation Reports. The paragraph on Heading 2 details the contribution of this MFF programme to the REACT-EU package.

(57)  This MFF programme includes the complementary financial envelope from the NextGenerationEU for the REACT-EU package. Please consult the Chapter 1.1 Multiannual Financial Framework 2021–2027 of the Notes to the Budgetary Implementation Reports. The paragraph on Heading 2 details the contribution of this MFF programme to the REACT-EU package.


ELI: http://data.europa.eu/eli/C/2023/2/oj
ISSN 1977-091X (electronic edition)