Drafting the budget
The budget is decided jointly by the Commission, the Council and Parliament. The Commission submits a draft spending plan to the Council and Parliament for their consideration. They can make changes and, if they disagree, they can try to work out a compromise.
Each year’s budget falls within a long-term spending plan known as the ‘financial framework’. This is a seven-year framework, currently running from 2007-13. It allows the EU to plan spending programmes effectively for several years in advance.
Managing EU funds
The Commission is ultimately responsible for allocating the budget. However, EU countries manage 76% of EU funds. In cases of fraud or undue payments, the Commission works with the European anti-fraud office and the EU countries to recover the money. To ensure transparency, information on beneficiaries of EU funds is available to the public.
What the money is spent on
There are roughly six areas of expenditure in the EU budget.
Currently the largest share goes towards creating growth and jobs and reducing economic gaps between regions. Another big portion goes to agriculture, rural development, fisheries and protection of the environment. Other spending areas include the fight against terrorism, organised crime and illegal immigration.