Budget of the European Union
In the 1980s and 1990s, Member States and the European Parliament broadened the scope of EU competences through changes in the Union's founding Treaties.
In parallel, the EU enhanced its role in areas such as transport, space, health, education and culture, consumer protection, environment, research, justice cooperation and foreign policy.
If the European Parliament may accept the Council's position or fails to take a decision within 42 days, then the budget is adopted.
[6] The European Commission, in cooperation with Member States, is responsible for the implementation of the EU budget in accordance with the Financial Regulation.
[7] The EU budget is implemented in accordance with the principles of unity and of budgetary accuracy, annuality, equilibrium, unit of account, universality, specification, sound financial management and performance and transparency.
[10] The annual discharge procedure allows the European Parliament and the Council to hold the Commission politically accountable for the implementation of the EU budget.
The European Parliament decides, after a recommendation by the Council, on whether or not to provide its final approval, known as 'granting discharge', to the way the Commission implemented the EU budget in a given year.
In October 2018, the European Court of Auditors gave the EU annual accounts a clean bill of health[12] for the 11th year in a row, finding them true and fair.
If Member States or final beneficiaries are found to spend EU money incorrectly, the Commission takes corrective measures.
The European Commission operates a system of inspections to control the collection of these duties in Member States and thus ensure compliance with the EU rules.
In 2017, eight Member States saw their VAT contribution reduced thanks to this 50% cap (Estonia, Croatia, Cyprus, Luxembourg, Malta, Poland, Portugal and Slovenia).
Member States are required to send a statement of VAT revenues to the EU before July after the end of the budget year.
The EU examines the submission for accuracy, including inspection visits by officials from the Directorate-General for Budget and Eurostat, who report back to the country concerned.
The country has a legal obligation to respond to any issues raised in the report, and discussions continue until both sides are satisfied, or the matter may be referred to the European Court of Justice for a final ruling.
Due to this covering mechanism the rate to be applied to the Member States' gross national income varies from one financial year to another.
Nowadays this resource represents the largest source of revenue of the EU Budget (generally around 70% of the total financing).
Currently, the total amount of own resources allocated to the Union to cover annual appropriations for payments cannot exceed 1.20% of the sum of all the Member States' GNI.
Payments of VAT- and GNI-based resources are based upon the budget estimates made for that year, subject to later correction.
This includes tax and other deductions from EU staff remunerations, contributions from non-EU countries to certain programmes (e.g. relating to research), interest on late payments and fines, and other diverse items.
[3] It goes together with the Next Generation EU recovery package of €750 billion in grants and loans over the period 2021–2024 to meet the unparalleled economic challenge of the COVID-19 pandemic.
[citation needed] Note: in this budget period, "EU 27" meant the 27 member states prior to the accession of Croatia.
The United Kingdom withdrawal from the European Union has led the EU to reconsider its funding mechanisms, with the rebates likely to change.
[29] The Multiannual Financial Framework for the 2021-2027 period will shift €53.2 billion as national rebates to Germany and the frugal Four funded by the Member States according to their GNI.
