EU BUDGET: a pivotal force, not as a replacement but as a complement to national budgets. It serves as a reservoir of financial and economic resources strategically deployed by EU institutions to sustain economies and societies, extending impact beyond national borders. This financial lifeline empowers EU countries to attain superior performances than they would achieve independently.

The essence of the EU budget lies in its multifaceted support system:

1. Long-term Development Goals: The EU budget channels resources towards fostering sustainable development, laying the   groundwork for enduring societal and economic advancements
2. Savings of Public Funds: Acting as a (co)financer of expansive projects, the EU budget facilitates substantial savings in   public funds, fostering responsible and impactful financial practices
3. Internationalisation of Best Practices: By nurturing an environment conducive to international collaboration, the EU   budget promotes the exchange of best practices and case studies across national borders
4. Timely and Efficient Support: The EU budget positions itself as a timely and efficient support system, extending its reach   to citizens, public administrations, and businesses when needed the most

EU budget represents a dynamic financial journey, strategically aligned with the EU’s long-term objectives. It operates within multi-annual structured cycles, aiming to ensure strategic financial management over set periods.

The multi-annual structured cycles are settled in seven-year intervals, with the current one that spans from 2021 to 2027.

This cyclical approach in the strategic planning of financial activities is reflected in the operation of the budget and fund management within specific intervals, which are also cyclical – from long-term budget to annual budget.

Periodically, the effective deployment of funds goes through the following steps that make up a management process:

PLANNING		APPROVAL		IMPLEMENTATION		EVALUATION
EU institutions collaboratively plan financial allocations through the launch of specific programmes.		The budget planned or requested by the various beneficiaries undergoes approval processes, ensuring alignment with EU objectives.		Funds are distributed and projects are implemented.		Results are continuously assessed to gauge the impact and effectiveness of financial allocations.

Building upon the understanding of the EU financial landscape and the introduction of related seven-year cyclicality, let’s delve inside the budgeting process, navigating it from the long-term to the annual implications.

Within this holistic framework of the EU budgeting process, the MFF and Annual Budget work in tandem, effectively ensuring a balance between long-term vision and short-term goals, also allowing for agile responsiveness as needed.

Focusing on the 2021-2027 cycle, the EU’s long-term budget, powered by the NextGenerationEU recovery instrument, reaches an unprecedented €2.018 trillion (as per current prices in November 2020).

Dual composition:

• MFF for 2021-2027: €1.211 trillion
• NextGenerationEU: €806.9 billion

Key highlights:

• Over 50% of the total aims to advance the EU through research, innovation, fair climate and digital transitions, as well as preparedness, recovery, and resilience, marking a significant focus in modernisation
• 31.9% is allocated to address new and reinforced priorities, underscoring a dynamic approach to emerging challenges
• 30% is dedicated to address the challenges of climate change, with a focus on biodiversity protection and gender-related issues
• 10% of the spending for 2026 and 2027 is committed to biodiversity
• 20% of NextGenerationEU funding is directed toward bolstering the digital transformation

2021-2027: A modernised EU long-term budget, powered by the NextGenerationEU

Source: European Commission, The 2021-2027 EU budget – What’s new?

…but what is the NextGenerationEU?

NextGenerationEU is a recovery instrument complementing the MFF introduced in 2020 in response of the socio-economic repercussions of the pandemic. It aims to steer Europe towards research, innovation, sustainability, digital transitions, and resilience at large.

NextGenerationEU foresees a financial injection of EUR 806.9 billion, of which EUR 723.8 billion is earmarked for the Recovery and Resilience Facility (RRF), plus a contribution of EUR 83.1 billion to existing programmes such as REACT-EU, HORIZON EU, etc.

The RRF provides substantial support for public investments, with a focus on green and digital projects. Funded by NextGenerationEU, these resources, totalling €338 billion in grants and €385.8 billion in loans, have been channelling into various programmes and among EU countries as beneficiaries, i.e. the National Recovery and Resilience Plan (NRRP).

The allocation of funds follows criteria like GDP per capita, unemployment rates, population size, and the pandemic’s impact.

NextGenerationEU: more than €800 billion for Europe's recovery

Source: European Commission, The 2021-2027 EU budget – What’s new?

Who benefits from the EU budget?

Efficiently organising funding, the EU budget strategically divides resources into spending categories (headings – see next slide for further details) and programmes, ensuring effective support for beneficiaries across various EU policy areas. This approach facilitates a cross-cutting impact, aligning with the overarching goals of the long-term budget.

Integration with NextGenerationEU:

While NextGenerationEU operates as a distinct instrument, its financial streams seamlessly integrate with programmes embedded in the long-term budget. This synergy ensures that the impact of NextGenerationEU is maximised across diverse policy domains.

Dual Funding for Key Headings:

To amplify its influence, several headings receive funding from both the MFF and NextGenerationEU. This collaborative approach enhances the budget’s capacity to address multifaceted challenges and bolster transformative initiatives.

• Heading 1: Single Market, Innovation and Digital
  • Research and Innovation
  • EU strategic investments
  • Single Market
  • Space
• Heading 2: Cohesion, Resilience and Values
  • Regional Development & Cohesions
  • Recovery and Resilience
  • Investing in People, Social Cohesion and Values
• Heading 3: Natural Resources and Environment
  • Agriculture & Maritime Policy
  • Environment & Climate Action
• Heading 4: Migration & Border Management
  • Migration
  • Border Management
• Heading 5: Security & Defence
  • Security
  • Defence
• Heading 6: Neighbourhood & The World
  • External Action
  • Pre-Accession Assistance
• Heading 7: European Public Administration

Allocations per heading for 2021 to 2027 - in billion

Source: European Commission, The EU’s 2021-2027 long-term budget and NextGenerationEU – Facts and figures

Allocations per policy and programme – with a focus on MFF

Breaking down the 2021-2027 MFF reveals targeted allocations that drive impactful policies and programmes.

A substantial 31.9% is earmarked for critical areas such as research, education, and border protection, fostering a holistic approach to EU priorities. When integrating NextGenerationEU funding, this share surges beyond 50% of the total, emphasising the collective commitment to fortify key sectors for sustainable growth and resilience.

Additionally, economic, social, and territorial cohesion secures a 30.5% share, while the common agricultural policy commands 30.9%. Notably, both policies undergo significant modernisation, aligning with the overarching goal of supporting green and digital transitions.

To the right, a detailed table presents an overview of MFF allocations per policy and programme, offering transparency and insight into the strategic distribution of resources.

Strategic Collaboration: Both routes come together to accomplish general EU objectives. Centralised financing simplifies programmes throughout the EU, whereas decentralised funding encourages customised initiatives that take into account the uniqueness and diversity of local needs.

Within the direct management framework, let’s explore the leading role of the European Commission. It assumes a pivotal position, directly being responsible and overseeing every facet of a programme’s implementation:

1. Launching Calls for Proposals: Initiating the process by inviting project proposals
2. Evaluating Submitted Proposals: Rigorous assessment to ensure alignment with objectives
3. Signing Grant Agreements: Formalizing commitments with successful project proponents
4. Monitoring Project Implementation: Ongoing oversight to guarantee adherence to set guidelines
5. Assessing the Results: Evaluation of project outcomes against predefined criteria
6. Making Payments: Facilitating financial disbursements as stipulated

These comprehensive tasks unfold within the Commission's departments, spanning its headquarters, EU delegations, or through designated EU executive agencies. Notably, centralised programs executed through direct management constitute approximately 20% of the EU budget for 2021-2027. This centralized approach ensures a cohesive and streamlined implementation process, driven solely by EU entities without the involvement of external third parties.

Beside the direct management framework, let’s focus on the shared management framework, where EU funds are jointly administrated with the Member States and Regions. This collaborative model involves both the European Commission and national authorities within Member States, including ministries and public institutions, jointly overseeing specific programmes. Approximately 70% of EU programmes operate under this shared management structure.

Within shared management, Member States’ administrations at national, regional, and local levels play a key role in selecting projects for financing and assume day-to-day management responsibilities. Through a synergistic partnership with Member States, the EU Commission ensures the successful completion of projects and the effective utilisation of funds.

The national website portals and programme websites provide real-time information on upcoming funding opportunities. This includes details such as the regions covered by funding calls, eligibility criteria, funding amounts, programme and EU policy objectives, and timelines.

Key EU funds managed under the shared framework include:

• European Regional Development Fund (ERDF)
• European Social Fund Plus (ESF+)
• Cohesion Fund (CF)
• Just Transition Fund (JTF)
• European Maritime, Fisheries and Aquaculture Fund (EMFAF)
• Asylum, Migration and Integration Fund (AMIF)
• Internal Security Fund (ISF)
• Instrument for Financial Support for Border Management and Visa Policy (BMVI

Recalling the EU programmes highlighted in the resource allocation discussion (refer to section 1.4 (3) – slide no. 11), let’s now explore their distribution across various cross-cutting priority areas. Each programme is dedicated to supporting distinct policy areas, as illustrated below:

Access EU funding & tenders’ opportunities and available EU programmes through the SEDIA Portal – free consultation

Here are some examples of key EU programmes dedicated, among other things, to skills development and promoting the competitiveness of micro, small, and medium-sized enterprises (MSMEs). These enterprises are encouraged to explore these valuable opportunities to strengthen their digital resilience and remain competitive.

The journey of an EU project begins with the conception of an idea. The initial step involves conceptualising a project that aligns with EU priorities and objectives. This idea is then shaped into a comprehensive formal project proposal – to be submitted. The macro-initial phase of moving from an idea to a proposal consist of various key steps:

1. Project Conceptualisation:
   • Identify a concept for a project that aligns with EU priorities
   • Define the overarching objectives, goals and outcomes of the proposed idea of project through a concept note
2. In-Depth Analysis:
   • Assess the feasibility of the project, considering resources, timelines, and any challenges
   • Conduct a preliminary review of the project’s alignment with EU objectives and goals
3. Partner(s) and Stakeholder(s) Engagement:
   • Identify and engage relevant stakeholders, including potential partners, targets, and experts
   • Gather input and support for the project idea from key stakeholders
4. Alignment with EU Guidelines:
   • Ensure that the concept note aligns with the guidelines and priorities of the specific and targeted EU funding programme
   • Address any specific requirements outlined in the funding call of reference
5. Detailed Project Planning:
   • Develop a detailed project plan outlining specific activities, milestones, deliverables and timelines
   • Formulate a budget estimate based on the planned project plan

To transition from the macro-initial phase to the proposal writing (and then to its submission), it is essential to deal with the key documents that guide the proposal process. These include:

• EU Regulation: The official regulation, published on the Official Journey of the European Union, that establish the specific programme in its elements such as budget, % funding, timeline, funded actions, etc.
• Work Programme: A comprehensive document outlining the strategic objectives, priorities, roadmap for deadlines, budget breakdown and specific areas of interest for funding within a certain period. It is published on the programme’s website
• Programme Guide: A detailed manual providing in-depth insights into the overall structure, rules, objectives, priorities and specific requirements of the funding programme. It also includes the eligibility and award criteria for a proposal
• Call for Proposals: Also published on the Official Journey of the European Union and notified through the news section of the programme website, it opens the period for submitting a proposal, representing the official call that specifies the procedural details and the deadlines for each action
• Form: The official template through which applicants submit their project proposals, capturing essential details outlined in the Call for Proposals

Applicants must thoroughly analyse these documents to align the project idea with the programme’s characteristics. Key aspects to consider include:

• Strategic Alignment
• Thematic Relevance
• Compliance
• Form Completion

When we introduce the form completion (see previous slide – no. 21), we have already started talking about the phase following the initial one, i.e. the proposal writing or development phase.

Adhering to the “WHY, WHAT, WHO, WHEN, HOW” framework ensures a systematic and comprehensive approach to proposal development. Here is a focus on the key elements of the proposal development phase:

• Objectives – WHY:
  • General Objectives: Long-term aims producing benefits beyond the project duration, contributing, improving, strengthening, facilitating, and implementing
  • Specific Objectives: Attainable during the project’s lifetime, such as testing a concept or developing new knowledge

Tips:

• Connect objectives to relevant European policies, such as the 2030 European Digital Decade
• Showcase how the proposal addresses a pertinent problem
• Measure potential impact / improvement, linking it to EU strategic objectives and specific programme’s priorities
• Define mechanisms and actions for results sharing and promotion, uptake measures, and validation by end users
• Ensure project sustainability: financial, political-institutional, environmental

After comprehensive development, the proposal is formally submitted through the designated platform (formal submission), signifying the conclusion of the idea-to-proposal process. The completed form is submitted through the specified platform, which varies according to the specific programme requirements.

At the same time, a new process begins: the proposal evaluation process.

Project Evaluation: The submitted proposal undergoes evaluation by designated entities and evaluators. Evaluation criteria include criteria such as clear objectives, tangible and intangible results, stakeholder responsibilities, and strategic alignment.

If Approved: The project proceeds to compliance and execution, with contract negotiations following feedback from evaluators. The project starts with a kick-off and concludes, after its implementation, with a final report on project results.

• Revision and Feedback: The revision phase focuses on improving the strengths of the proposal and correcting weaknesses identified through the evaluator's feedback, ensuring a stronger presentation in any subsequent evaluations
• Continuous Improvement: This critical phase emphasises adaptability and commitment to the success of the project; each iteration reinforces the quality of the proposal and alignment with the evaluation criteria for resubmission