Budget of European Union

A. , Multiannual Financial Framework and Annual budget I A., Multiannual Financial Framework and Annual budget I. Multiannual Financial Framework (1988) 1. it is the EU long-term spending plan 2. it lays down the maximum annual amounts which the EU may spend in different political fields ('headings') yearly over a period of at least 5 years ↓ it is not the budget of the EU for a time period , but is an expression of political priorities 3. its aim is to ensure the predictability of EU spending 4. procedure of its adoption 5. period 2014-2020 a., commitment appropriations: EUR 960 billion b., payment appropriations: EUR 908 billion

1. it is adopted within the framework of MFF 2. adoption of procedure II. Annual budget 1. it is adopted within the framework of MFF 2. adoption of procedure a., Commission: the annual draft budget b., Council of European Union c., European Parliament d., Council - accepts the opinion of EP → annual budget is adopted - it does not accept the opinion of EP e., Conciliation Committee 3. if at the beginning of a financial year, the budget has not yet been definitively adopted, a sum equivalent to not more than 1/12 of the budget appropriations for the preceding financial year may be spent each month

B. , Structure of budget I. Revenues 1 B., Structure of budget I. Revenues 1. traditional own resources (TOR) a., it was introduced in 1971 b., its importance c., its components: there are import duties on goods brought into the EU. (agricultural duties and customs duties) d., their collection: Member States + states are allowed to keep a proportion of the revenue to cover administration (20%).

2. VAT-based resource a., it was introduced in 1979 b., it is a certain percentage of VAT collected in all Member States c., monthly payment 3. GNI- based resources a., it was introduced in 1988 b., it is certain amount/percentage of GNI of Member States c., its aim is to ensure that the total contribution of the Member States to the EU revenues will be in the same level in every Member States 4. other revenues

5. the importance of different sources and changes over time

VAT – 16.85% GNI – 64.05% TOR – 14.36%

II. Expenditures 1. Smart and Inclusive Growth a II. Expenditures 1. Smart and Inclusive Growth a., Competitiveness for growth and jobs b., Economic, social and territorial cohesion 2. Sustainable Growth: Natural Resources 3. Security and citizenship 4. Global Europe 5. Administration 6. Compensations + the share of different categories and changes over time

C. The monitoring of budget execution I C. The monitoring of budget execution I. Monthly report - the Commission II. Annual activity reports 1. each Commission Directorate-General - activity report 2. each Directorate-General (DG) has an internal audit unit 3. European Commission a., assessment of the Commission's financial situation b., synthesis report III. European Court of Auditors 1. it is independent external audit unit of EU 2. annual report 3. the opportunity to check the activity of persons, companies and institutions + to inform the EC

D. , Conflicts of EU budget – Net balance with EU I D., Conflicts of EU budget – Net balance with EU I. Existence of net contributors and net recipients 1. net contributors 2. net recipients II. Source of conflict 1. net contributors

E. , The most important characteristics of EU budget I E., The most important characteristics of EU budget I. the EU budget finances public goods and services (such as education, health care) to an insignificant degree II. The EU budget can have no deficit = revenues and expenditures must always be in balance III. Principle of indivisibility: IV. Redistributional nature: it redistributes money between Member States