2020 EU Budget: Performance report highlights swift and global EU response to the coronavirus crisis while supporting key EU priorities

This article is brought to you in association with the European Commission.

The EU budget has helped ensure a swift and comprehensive EU response to the coronavirus crisis and its consequences, while supporting overarching EU priorities. This involved mobilising financial resources rapidly and flexibly to address the most pressing needs, without making any compromise on applying the highest standards of financial management.

Today the Commission presents two complementary pieces on EU budget performance reporting:

• an Annual Management and Performance Report for the EU budget
• and a forward-looking Communication on the performance framework for the EU long-term budget 2021-2027.

The first document – the Annual Management and Performance Report – has shown that, despite its relatively small size, the EU budget is capable of achieving major results, and can play a critical role in times of crisis. The robust internal control framework of the Commission ensured that the EU budget remained well and effectively protected throughout the year.

The performance framework – the subject of the second document – will make sure that the European Commission preserves the strong focus on the achieved results in the future, starting from the effective implementation of the current multiannual financial framework, complemented by the NextGenerationEU recovery instrument. Taken together, the two represent the largest stimulus package ever financed from the EU budget.

Johannes Hahn, Commissioner in charge of the EU Budget and Administration, said: “2020 was an extremely challenging year due to the coronavirus pandemic but once more, the EU demonstrated its ability to cope with this challenge. Thanks to the EU budget, the EU put forward an unprecedentedly swift and comprehensive response to help overcome the health, economic and social repercussions of the pandemic, while extending our solidarity well beyond our borders. While fighting the pandemic, we kept our focus on our priorities and met all our budgetary goals, including in terms of climate and biodiversity. As for the forthcoming years, the Commission has a great responsibility to continue to implement effectively the long-term EU budget and NextGenerationEU. Even in times of crisis it remains our objective to maximise the effectiveness of EU spending besides continuing to deliver for EU citizens and partners beyond.”

The EU’s Annual Management and Performance Report (AMPR) for the EU budget for 2020

The Annual Managament and Performance Report for the EU budget is the document through which the Commission takes overall political responsibility for the management of the previous’ year EU budget.

The 2020 Annual Managament and Performance Report demonstrates that the EU used its 2020 budget rapidly and effectively to mitigate the coronavirus crisis and its consequences.

• In only a few weeks, the EU mobilised every single available euro within its budgetary remit to alleviate the impact of the crisis. Funds were deployed rapidly through new flexibility in existing programmes, such as the structural funds, or through new initiatives, including the Emergency Support Instrument or the innovative SURE
• The budgetary response to coronavirus pandemic and its consequences was comprehensive, addressing the immediate health crisis as well as its socio-economic impact.
• Centralised EU procurement helped ensure safe and effective vaccines for all EU Member States. SURE provided financing to Member States to support employment, reaching an estimated 25-30 million workers.
• The EU has also taken the lead in providing equitable access to vaccines around the world through the efforts of Team Europe and its support to the COVAX facility.

While fighting the pandemic, the EU continued making progress on its political priorities through the EU budget:

• It supported the green transition, by spending 20.1% of its 2014-2020 budget (€216 billion) on the fight against climate change — thus delivering on its 20% objective—and 8% (€85 billion) on biodiversity.
• It supported the digital transition, for example by helping connect 25 million households to high-speed internet through cohesion funds and the European Fund for Strategic Investments.

The EU budget was able to achieve these results while at the same time safeguarding taxpayers’ interests thanks to effective measures against fraud and irregularities.

The report also shows that the EU Budget was well-managed in 2020, thanks to

• a strong internal control framework
• a constant monitoring of the risks (in particular those related to the coronavirus crisis)
• its well-established multiannual control cycle and other mitigating measures.

In particular, the risk of mistakes when paying out funds to our partners and beneficiaries is estimated at 1.9% of the overall volume. Many of these errors, estimated to correspond to 1.0% of the overall volume, are actually found and corrected before the programmes are closed. That leaves us with a risk for actual mistakes of 0.9% of the overall volume, which is well below the 2% materiality threshold, as applied by the European Court of Auditors.

Performance Framework for the EU’s 2021-2027 long-term EU budget

Spending the EU resources effectively is all the more important given the unprecedented size and role of the EU Budget post-2020 and the creation of the Recovery Instrument NextGenerationEU.

• The performance framework described in the Communication’s Communication will assist the Commission and its partners to implement and steer the budget even more effectively.
• It comprises the concrete objectives that each programme in the 2021-2027 long-term budget and NextGenerationEU needs to achieve and indicators and targets to measure progress and regularly report on results.
• A modern performance framework is also a critical management tool. It will provide the necessary information to identify emerging issues early, so that timely corrective actions can be taken, and to inform reallocation of resources when new priorities emerge – within the limits envisaged by the legal framework.
• The Commission cannot implement a modern and strong performance framework alone. Boosting the effectiveness and transparency of EU programmes requires a coordinated effort. The Commission warmly welcomes the increasing emphasis placed on the performance of EU spending by the European Parliament, the Council of the European Union, the European Court of Auditors and the Member States. Working together will help ensure that this EU budget of unprecedented size and ambition delivers its full potential, to the benefit of EU citizens.

Background

Annual Management and Performance Report (AMPR)

Through the Annual Managament and Performance Report, the Commission takes overall political responsibility for the management of the previous’ year EU budget. It is foreseen by Article 318 TFEU and Article 247 of the Financial Regulation, and is part of the Integrated Financial and Accountability Reporting (IFAR) package, which the Commission submits in support of its request for discharge to the European Parliament. The discharge is the procedure through which the European Parliament evaluates the implementation of the EU Budget by the Commission.

The Annual Managament and Performance Report is based on:

• Annual Activity Reports
• Programme Statements
• Evaluation of EU programmes
• Work of the Internal Auditor
• Work of the Audit Progress Committee
• Work of the European Court of Auditors

The Commission is publishing the Annual Managament and Performance Report on the implementation of the 2020 budget at the same time as the Draft Budget for 2022. This provides stakeholders with one comprehensive set of performance information, consistent across both the draft budget and the discharge procedures. The Commission thus emphasizes its focus on performance and the role of performance information in budgetary planning.

The main report has been purposefully kept very short (10 pages) to maximize its accessibility and readership. This enhances the Commission’s accountability. The annexes provide valuable additional information. In particular:

• Annex 1, “Performance and Results”, presents a high-level summary of the performance of the EU budget in 2020;
• Annex 2, “Internal Controls and Financial Management”, describes how the Commission protected EU resources despite the challenges brought about by the coronavirus pandemic; and
• Annex 3, “Programme Performance Overview” includes short and reader-friendly performance fiches for each EU spending programme.

The Commission Communication to the European Parliament and the Council on the Performance Framework for the EU Budget under the 2021-27 MFF highlights the importance the Commission attaches to the effective implementation of the budget. The Commission issues this Communication in the context of the transition between two multiannual financial frameworks, which provides an opportunity to explain the performance framework and the Commission’s plans for its further improvement.