Serwisy Funduszy Europejskich

European Funds sites


03-03-2009

About European Funds

 

Resources from the European Union budget – where do they come from and what are they for?

The European Union resources are collected by member states and transferred to the EU budget. Most commonly these resources come from the following sources:

  • duties that are charged on imports of products coming from a non-EU states (so-called EU traditional own resources (TOR));
  • VAT revenue (value added tax) – it is an established percentage rate that each member state has to pay to the EU in relation to the resources coming from VAT revenue);
  • resource based on national revenue of each member state (each state pays 0.73 % of its gross national product (GNP) to the EU budget).

At the moment it is the largest source of European Union funding

Source: European Commission: Directorate-General for Budget  

 

 

 

 


In 2007 Poland received EUR 7.8 billion (7.4% of all EU expenditure) from the EU. After paying its contribution, Poland made a net profit of approx. EUR 5.1 billion. To put it in other words, the amount we pay to the EU budget constitutes only ¼ of the amount we receive. Compared to 2006 it is more than double. It is estimated that in the period 2007-2013 Poland will receive from the European Union an overall amount of EUR 87 billion, and it will have to give back to the EU budget EUR 22 billion, which implies that Poland will make a net profit of approx. EUR 65 billion. It is definitely the greatest amount among all EU member states.

Where does the European Union allocate the collected money? First of all, they are allocated to the implementation of Common Agricultural Policy (including fishing and fisheries), as well as cohesion policy. Both these policies are intended to facilitate improvement of European Union competitiveness and exercise a positive impact on development, inter alia, agriculture, culture, infrastructure, education and security. The administrative costs of running European Union institutions and humanitarian and development aid for non-European Union states are also financed from the budget. The following Diagram shows the areas on which the EU funding is spent at the moment. For the first time in the history of the European Union, in the current programming period 2007-2013, the resources for support to competitiveness and cohesion exceed the funds allocated to agriculture and rural development.

Source: European Commission, Directorate-General for budget 


Regional/cohesion/structural policy (explanation of terms)

In relation to EU subsidies one can come across one of the following terms: regional policy, cohesion policy or structural policy. Do they differ among each other? Theoretically, yes. Structural policy is a term traditionally used to denote European Community interventions (and from 1993 onwards – European Union) applied already in 1957. Regional policy is focused on increasing economic and social cohesion within the European Union, which means that its basic task consists in financial assistance for the regions. While, cohesion policy indicates the basic objective of the intervention which is eliminating differences within the Community. However, in practice these terms are used interchangeably. Following the above one can assume that the European Union regional policy, structural policy and cohesion policy all have the same objective – levelling economic differences among European Union regions and, in consequence, among its inhabitants.


Rules of regional policy

The partnership principle and additionality principle (also known as co-financing principle or complementarity principle) are the two major principles of European Union regional policy.

  • The partnership principle is based on an assumption that all interested social partners are involved in both the programming and implementation stage. This requires co-operation between the European Commission and relevant public authorities of a given country at the national, regional and local level (i.e. gminas, poviats and voivodeships), as well as co-operation with economic and social partners.
  • Additionality (complementarity) principle means that the European Union funds should supplement financial resources of individual member states, and not replace them. The European Union measures are not aimed at driving out and replacing the measures undertaken at national and regional level, but they should enrich and reinforce them.

Other regional policy principles include: subsidiarity principle, concentrations principle, programming principle and co-ordination principle.

  • The subsidiarity principle means that all the measures should be undertaken at possibly the lowest administrative level able to implement them within the frameworks of a given region or a member state. The European Union institutions can implement established tasks only when regions or member states are unable to implement them efficiently and independently.
  • The concentrations principle consists in limiting support from EU funds only to measures of fundamental significance to the socioeconomic cohesion of the European Union. It implies, for example, support for least favoured regions. From the horizontal perspective, the principle also means that the funds intervention in order to be effective should not be scattered, but it should be concentrated at few precisely defined objectives, therefore the European Union financial assistance is directed at a small number of precisely defined objectives and projects.
  • The programming principle means that the European Union institutions control and monitor the use of funds, and they ensure that the process is in compliance with general Community policies and detailed European Commission guidelines. In line with this principle, the regional authorities must develop among each other formal agreement procedures in order to define and implement the regional development strategies. It should be remembered that the regional policy aims at long-term solutions for problems in a given region, and not at implementing individual short-term programmes.
  • The co-ordination principle regulates the operation of structural funds. It aims at efforts to focus regional policy measures and resources at priorities of fundamental significance to the socioeconomic cohesion of the European Union. The aforementioned principle is manifested in actions undertaken by the Commission which are targeted at allocating the resources from the Structural Funds to a limited number of regions affected by the most serious problems and selected on a basis of relevant criteria.

Subsidies – an element of the cohesion policy (+ an obligation to make a national contribution)

It should be noted that a subsidy, which can be awarded to an entrepreneur, gmina, NGO, etc., is not wholly financed from the European Union resources, but it is partly financed from national resources. The above is in line with one of the cohesion policy principles, mainly the additionality principle. The maximum financing for a project which can be granted from the EU funds amounts to 85%. It the previous years it was 75%.

 

 

2004-2006

2007-2013

 

subsidy

(100%)

EU funds (75%)

 

EU funds (85%)

 

national funds (25%)

 

national funds (15%)

 

 

 

 





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