Drafting the budget
The budget is decided jointly by the Commission, the Council and Parliament. The Commission submits a draft to the Council and Parliament for their consideration. They can make changes; if they disagree, they have to work out a compromise.
Each year’s budget sets out the amounts agreed in advance according to a plan known as the multiannual financial framework. This enables the EU to plan its funding programmes effectively for several years in advance. The current framework runs from 2014 to 2020.
Managing EU funds
The ultimate responsibility for allocating the budget lies with the Commission. However, national governments manage about 80% of EU funds. Where undue payments have been made, the Commission works with the EU countries concerned to recover the money. To ensure transparency, organisations and companies that receive EU funding are on public record.
What the money goes on
The EU budget breaks down into about 6 areas of expenditure.
Currently the largest share goes on creating growth and jobs and reducing economic gaps between the EU's various regions. Agriculture, rural development, fisheries and environmental protection also account for a major share. Other areas of expenditure include combating terrorism, organised crime and illegal immigration.