The EU Budget is the starting point for the Court’s audit work
The European Union has a budget of approximately 120 billion euro, around 1% of the gross national income (GNI) of its 27 Member States. Compared to national budgets this is a small share. However, for some Member States funds from the EU play an important role in financing public activities and the total amount is close or equal to the GNI of some Member States. The revenue of the European Union mainly consists of contributions from Members States based on their gross national income (GNI – 65,4%,) and on a measurement connected to value added tax collected by the Member States (VAT – 16,9%). Customs and agricultural duties (so called traditional own resources – 16,5%) also represent a significant share of revenue. The composition of the budget has evolved over time, agriculture and cohesion policies being its major components.
The budget is decided annually - within the context of seven-year financial frameworks - by the Council, i.e. representatives of the Members States, and the directly elected European Parliament. The European Commission proposes the budget and is also responsible for implementing it. A very significant proportion - notably agricultural and cohesion spending - is implemented in cooperation with the Member States. Depending on the spending schemes, national administrations may be responsible for setting spending strategies, selecting beneficiaries and projects and making payments. A specific feature of Community expenditure is the high percentage of payments based on claims submitted by the beneficiaries themselves, be they farmers or project managers throughout the Union.
