Direct EU funding
The European Union’s seven-year budget, i.e. the multiannual financial framework, is largely made up of payments based on the gross national income (GNI) of the Member States, supplemented by traditional own resources (e.g. external customs duties) and contributions based on value added tax (VAT). The EU budget for 2021-2027 is set at over €1.100 billion, exceptionally complemented by an EU “Next Generation” credit limit of approximately €800 billion to mitigate the economic consequences of the COVID pandemic.
During the budget negotiations, EU countries agree on which policies should benefit from the common budget, how much and how they should be structured.
WITHIN THE EU FRAMEWORK, THERE ARE TWO TYPES OF FUNDING: EU FUNDS UNDER SHARED MANAGEMENT AND UNDER DIRECT MANAGEMENT.
In the case of FUNDS UNDER SHARED MANAGEMENT– such as the instruments financing the Common Agricultural Policy and Cohesion Policy – the amount allocated to each Member State over the seven-year cycle is determined in advance. It is then up to the Member State itself to allocate the funds and to assess the applications received, within the framework of the so-called operational programmes. Of course, Member States are also accountable to the European Commission for these funds in detail, but they have more flexibility to tailor the funding to national development needs. These funds under shared management represent almost two-thirds of the current EU budget, €750 billion.
In contrast, EU FUNDS UNDER DIRECT MANAGEMENT are made up of funds covering individual EU policies, managed centrally by the European Commission. This means that the Commission calls for proposals and is responsible for evaluating and monitoring their implementation. The budget negotiations will determine the amount of money allocated to each policy – the new priorities – and the funds allocated to them, and the priorities assigned to them. However, it is not specified what proportion of these funds will be allocated to each Member State, or what specific calls for tender will be made for these amounts over the following seven years.
Funds
Direct funding is a major funding opportunity, accounting for around a third of the EU budget for 2021-2027, or €350 billion, and covering a wide range of areas through 24 dedicated funds. Support for one horizontal and two vertical areas has been prioritised between 2021 and 2027: the largest fund, Horizon Europe, will invest €95 billion in R&D and innovation across a wide range of policy areas, while proposals for greening and digitisation can apply for funding from several funds.