Activities of the European Union

Investing in our future

The annual budget of the European Union amounts to almost €142 billion (2011 figures) – a large sum of money in absolute terms, but only 1% of the wealth generated by the EU's member countries every year.

Most of that money is spent on improving the life of the EU's citizens and communities – with a large part channelled to less well-off regions and groups in society, and into generating jobs and growth across the EU.

Overview
Legislation
More information

Overview

Who decides how the money is spent?

Deciding how much the EU will spend – and what on – is a democratic process. Every year:

the European Commission proposes a budget for the following year, covering each policy and programme
elected representatives in the European Parliament and EU Council decide on the spending plans

Follow-up

Once the money has been used, the Commission must report back to the Parliament on how it was spent.
The expenditure is also subject to scrutiny by the European Court of Auditors.

What's the money spent on?

Training workers in new skills is one thing the EU budget funds © EU, DG REGIO

In Europe

Some of the main uses are:

training people in new skills and stimulating businesses to innovate and create jobs
helping preserve the environment and improve quality of life through rural and regional development
building hard infrastructure: roads, railways, bridges, power and gas transmission lines that connect the farthest corners of the EU
supporting cultural diversity and educational exchanges
providing emergency assistance when there are floods or earthquakes.

Abroad

As a major global player, the EU has certain obligations to the outside world: promoting economic and social development, keeping the peace and helping victims of disasters and conflict.

It is particularly active in 3 groups of countries:

parts of the developing world with which certain EU countries have strong historic ties, especially Africa and the Caribbean and Pacific regions
emerging economies along the EU's eastern borders and around the Mediterranean
potential EU member countries.

Top 3 spending areas (2011 figures)

45% goes on making the EU more competitive and boosting development in its poorer countries/regions ("cohesion").
31% is spent on subsidies to EU farmers. No longer linked to excessive production, this aid instead secures supplies of safe food at reasonable prices and ensures farmers enjoy a fair income, also in return for preserving the environment.
11% is allocated to rural development.

How is the EU budget spent? (2011 figures)

R&D - where pooling resources makes sense

Generally, the EU is responsible for spending money only where it makes sense for member countries to pool resources. Scientific research programmes, vital for keeping Europe globally competitive, are a good example of this.

EU research funding promotes integrated research projects involving scientists working in different EU countries. This approach shares the fruits of national research EU-wide, as well as creating economies of scale and effort.

The fields that benefit are manifold, including biotechnology, information technologies, nanotechnology and space research.

What it costs to run the EU

The costs of running the EU (administration) amount to 6% of total spending. This includes running costs for all the institutions (mainly the European Commission, Parliament and EU Council) and the translators and interpreters who make information available in all of the EU’s official languages.