What is the 'EU Budget Focused on Results'?
At a time of increasing pressure on the public finances it is more important than ever to get the most out of every euro. EU resources are scarce and in high demand. The EU budget amounts to around 1% of the EU's combined Gross Domestic Product (GDP) or approximately 2% of the public spending of the 28 EU Member States. Goal of the 'EU Budget Focused on Results' initiative is the effective use of EU resources – EU taxpayers' money – so that they are put to good use for the benefit of citizens. The EU Budget Focused on Results is also about showing people the concrete benefits of the EU budget.
Why is this important?
The EU budget pools the resources of Member States and brings economies of scale. It funds projects that Member States could not fund on their own, for instance cross-border infrastructure and pan-European clinical trials. It helps to achieve the 10 priorities of the Juncker Commission, and to address the challenges the EU is currently facing.
The EU budget already has a huge and positive impact. For example, for the 2007–2013 period, EU Cohesion Funds boosted average GDP by an annual 2.1% in Latvia, by 1.8% in Lithuania and by 1.7% in Poland.
The EU budget helps millions of students, thousands of researchers, cities, businesses, regions and NGOs. The EU budget contributes to healthier and safer food, new and better roads, railways and airports, and a cleaner environment; it increases studying opportunities abroad and cultural exchanges. The EU remains the largest development aid donor worldwide and delivers humanitarian assistance all over the globe.
However, the EU budget can achieve even better results. In the past, the focus has often been on simply using the funds and playing by the rules. Now we need to emphasise performance even more strongly than in the past. Today, demand for EU funding is rising and in many Member States the EU budget is a key source of investments. The pressure is greater than ever to make sure EU money is well-spent.
How will you make sure the EU budget is focused on results?
The 'EU Budget Focused on Results' approach set out by Kristalina Georgieva, the Vice-President responsible for budget and human resources, is organised around four priority areas:
- Where do we spend? The goal is to invest the EU budget according to the Commission's policy priorities, such as stimulating growth, jobs and competitiveness, and responding swiftly and effectively to emergencies such as the current refugee crisis. For example, the 2016 Draft Budget presented in May 2015 increases funds aimed at refugees to €833 million, an increase of 27% compared to the previous year. In September 2015, the Commission proposed to almost double this amount by adding a further €780 million, to support its proposal for the relocation of 120,000 additional refugees.
- How do we spend? This means maximising the use of EU funds once we have decided where we spend. For example, using the funds in the budget to attract additional financing (an example is the investment plan for Europe, in which the budget is used to mobilise loans which will stimulate investment), creating better incentives like additional funding (for instance in the structural funds for regional development regions that perform well can be rewarded with further funding) and simplification (create simpler rules to make it easier for beneficiaries to get access to funds). As Vice-President Georgieva recently said in Parliament, "simpler rules are easier to apply but also more difficult to hide behind. This is why we are simplifying access to EU funding."
- How are we assessed? This means ensuring better results by rigorous application of our control framework and performance-based budgeting. To achieve this, the Commission is already working together with Member States, who are responsible for managing 80% of the budget, to make sure they carefully monitor implementation and carry out detailed assessments of all financed projects. In 2014, thanks to thorough checks the Commission managed to recover and repurpose €4.7 billion, which represents 3.3% of all payments made in that year.
- How do we communicate? The objective is to improve awareness of the benefits of the EU budget. The Commission is putting together a database of successful projects funded by the EU budget. This is a step towards improving citizens' awareness of where their money goes.
When can we expect some follow up?
The Commission is working on all of the above areas and will come forward with concrete proposals for the way forward in a policy paper in the first half of 2016. The Commission is also working with EU Member States and the European Parliament on performance-based budgeting. While this work is ongoing, the Commission is already putting the initiative into practice as far as possible in designing annual work programmes.
The EU Budget Focused on Results conference will take place on an annual basis, as an occasion to evaluate progress and to identify what else needs to be done.