EU budget for 2021: We supported the economic recovery

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Commission presents annual report on the management and performance of the EU budget for the financial year 2021

In difficult times, the EU budget, complemented by the NextGenerationEU recovery instrument, continued to produce results for EU citizens, in full compliance with the highest standards of financial management. Yesterday the Commission presented the annual report on the management and performance of the EU budget for the financial year 2021, through which the Commission assumes the overall political responsibility for the management of the EU budget for the previous year.

EU Commissioner for Budget and Administration Johannes Hahn said: “The EU budget has played a key role in the overall EU response to another extremely difficult year. We have continued to support the EU’s economic recovery, while continuing to generate added value for the benefit of EU citizens, businesses and communities. The successful launch of the Recovery and Sustainability Facility will give an even stronger impetus to the green and digital transition. »

Good results in a difficult environment

According to the report, last year EU funds continued to play a crucial role in the EU’s response to the coronavirus pandemic, and its consequences. Key projects included financing the introduction of the COVID-19 digital certificate, the provision of healthcare-related equipment, the provision of assistance to medical staff and operational support for mobile medical assistance, and the purchase of low-income vaccines.

The report notes the high level of flexibility shown by the Commission in managing the budget to meet the challenges while they were ongoing – something the Commission continues to do, even in a changing geopolitical environment.

In 2021 the Commission began borrowing for the recovery through NextGenerationEU and made the first disbursements, based on approved recovery and resilience plans.

Green and digital engagement

The Recovery and Sustainability Plans adopted in 2021 provide funds for climate and digital policies, both of which are higher than the targets set by EU law, as an expression of the EU’s genuine commitment to green and digital transformation.

In total, 34.6% of the combined budget of the EU and NextGenerationEU, ie EUR 146 billion, was spent on combating climate change in 2021. This means that they have already been spent from the EU budget for 2021 alone, two thirds of the total amount spent during the period 2014-2020. The EU also appears to be well on track to meet the overall target for 2021 to 2027.

Protecting the EU budget

These results have been achieved while ensuring adequate protection of the EU budget against fraud and irregularities in the interests of taxpayers. Budget protection measures include a strong internal control framework, ongoing risk monitoring (especially those related to the coronavirus crisis) and established multiannual control strategies to help prevent, detect and correct errors, as well as identify areas for improvement.

As a result of the existing audits, the risk of errors in the payment of funds to our partners and beneficiaries is estimated at 1.9% of total expenditure. This percentage is lower than the 2% threshold, as applied by the European Court of Auditors. Many of these errors, which are estimated to account for 1.1% of the total cost, will be identified and corrected before the programs close. Of course, there is still the risk of actual errors of 0.8% of total costs at the end of the program life cycle.

Record

Annual Management and Performance Report (EAD)

With its annual management and performance report, the Commission assumes overall political responsibility for managing last year’s EU budget. It is provided for in Article 318 TFEU and Article 247 of the Financial Regulation and is part of the package of consolidated financial reports and reports and accountability, which the Commission submits in support of its request for discharge to the European Parliament. Discharge is the process by which the European Parliament evaluates the implementation of the EU budget by the Commission.

The annual management and performance report is based on:

  • in the annual activity reports
  • in the program statements accompanying the draft budget
  • in evaluations of Union programs
  • in the work of the internal auditor
  • in the work of the audit monitoring committee
  • in the proceedings of the European Court of Auditors.

The Commission publishes the annual management and performance report on the implementation of the 2021 budget at the same time as the draft budget for 2023. This provides stakeholders with a comprehensive set of performance information, draft budget and discharge procedures. The Commission therefore emphasizes its focus on performance and the role of performance information in information on financial planning.

In addition to the main report, which is very concise, aimed at maximizing accessibility and readability, the annexes provide valuable additional information. Particularly:

  • Annex 1 “Horizontal Priorities” summarizes the high level of performance of the EU budget in 2021 in relation to the Commission’s key priorities;
  • Annex 2, “Internal controls and financial management”, describes how the Commission has protected EU resources despite the challenges posed by the coronavirus pandemic;
  • Annex 3, “Mechanism for Recovery and Sustainability”, describes this new instrument in the EU recovery service, based on its performance and its main achievements to date;
  • Annex 4, “Program Performance Overview”, provides concise and understandable performance sheets for each EU Expenditure Framework.
  • Other technical annexes, detailing in particular the results of the inspections and the preventive and corrective measures taken in 2021.

Lena Flytzani

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