EU budget in my country Slovakia

8/10/2019 EU budget in my country Slovakia

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The EU budget in my country

Slovakia



S

Bratislava



3T H E E U B U D G E T I N M Y C O U N T R Y — S L O V A K I A

What is the EU budget?The EU budget is an important tool that puts EU policiesinto practice. It finances actions that Member Statescannot fund on their own or which they can fund moreeconomically by pooling their resources. The EU budget isadopted through a democratic procedure: it is preparedby the European Commission (the EU’s executive body)and is then discussed and agreed by the Council of the EU(representing EU Member States, including Slovakia) andby the European Parliament (where the democraticallyelected Slovak representatives sit). Once adopted, thebudget is then managed either jointly by the EU MemberStates and the Commission, or directly by the Commission.In practice, 80 % of the EU budget is managed by nationalor regional governments. Through grants, loans and otherforms of financing, the EU budget provides financial supportto hundreds of thousands of beneficiaries such as students,scientists, NGOs, SMEs, towns and regions.

Where does the money come from?

The EU budget is largely financed by ‘own resources’ whichare based on three kinds of sources:

▶ customs duties on imports from outside the EU and sugarlevies;

▶ a small part of value added tax (VAT) levied in the EU;

▶ gross national income (GNI): each Member State transfersa standard percentage of its GNI to the EU. This forms thelargest source of income to the EU budget (76 % in 2012).

This system has been unanimously decided on by EU

Member States for a 7-year period, and has been ratified

by all national parliaments. It aims to provide a reliable andsufficient level of revenue for the EU budget, while at the

same time taking into account the Member States’ ability

to pay. Each Member State thus contributes in line with its

wealth. The other sources of revenue for the EU budget

include taxes on EU staff salaries, fines on companies for

breaching competition laws and bank interests, etc. There isno direct EU tax. EU countries remain in control of their taxes.

Did you know …? ▶ EU funds amount to 75 % of the public

investments in Slovakia.

▶ In 2007–13 EU funds for Slovakia amountedto EUR 13.7 billion.

▶ 3.3 % of Slovakia’s wealth comes from EUinvestment.

▶ The EU budget supports Slovakian farmers and thedevelopment of rural communities, for instance byinvesting in projects boosting rural tourism.

▶ The EU invests heavily in Slovakia’s regions, withprojects for modernising water systems andconstructing motorways.

▶ The EU budget is YOUR budget: from scientists tofarmers, from students to entrepreneurs, we allbenefit from projects funded by the EU.



4 T H E E U B U D G E T I N M Y C O U N T R Y — S L O V A K I A

Where does the money go?

Some 94 % of EU money is spent on the various EUpolicies, and most of it goes back to Member States. Inmany cases the EU budget supports large and complexprojects. One of them is the European Partnership Actionagainst Cancer, where collective European effort helps toprevent the disease and find a cure for it. Approximately6 % of the EU budget is spent on the functioning of theEU institutions. This is used to pay for the salaries and

pensions of EU employees, translation and interpretation,security, buildings and IT systems, etc. This expenditure isnecessary in order to allow the EU to work.

The chart below provides an overview of how much the EUinvested in each of its Member States in 2012, and showsthe contribution of European funding to each country’swealth. In Slovakia, EU funding represents 3.3 % of thecountry’s wealth (GNI).

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

0 %

1 %

2 %

3 %

4 %

5 %

6 %

1a. Competitiveness

1b. Cohesion

2. Natural resources

3a. Freedom, security

and justice

3b. Citizenship

4. The EU as a global

player

5. Administration

6. Compensation

% GNI

PL ES FR DE IT BE UK PT EL CZ HU RO SK NL IE AT LT BG SE LU DK FI LV EE SI CY MT

Who keeps an eye on EU spending?

The Commission has put into place robust internal controlmeasures in order to ensure that funds are spent efficientlyand effectively. As 80 % of the EU budget is managed bynational or regional governments, Member States alsoplay an important role in ensuring that rules are observed,and in detecting and addressing irregularities and fraud.Additionally, the European Court of Auditors reviews theEU accounts every year. For several years the Court has

confirmed that the EU accounts are properly kept, but alsopoints out errors in procedures (e.g. accounting errors bynational programme participants or claims for non-eligiblecosts). Errors do not mean that EU money is lost, wasted oraffected by fraud. A large part of the money spent in erroris recovered. In addition, the European Parliament approveshow the Commission has spent the budget following theend of every financial year.

If you want to see which entities have received EU funding,the financial transparency system will show you whichentities have received payments from the EU budget.

Expenditure by Member State in 2012 (in million EUR)




The EU multiannual framework2014–20 in brief

Although the EU budget is adopted every year, it must beestablished within the limits of the multiannual financialframework (MFF). The MFF is an expenditure plan settingmaximum annual amounts which the EU can spend indifferent fields of activities over a 7-year period. It thereforeshapes the EU’s political priorities for 7 years.

For the 2014–20 funding period, the EU wants to meetthe targets of the Europe 2020 growth strategy, focusingon what Europe needs in order to overcome the economicand financial crisis and concentrating on areas where itcan make a genuine difference. Some of the Commission’sproposals for radical reform were watered down byMember States but very important changes remain. Keyelements of the 2014–20 MFF include:

▶ a focus on growth, jobs and competitiveness withincreased investment in education and research, and a newConnecting Europe Facility fund to boost pan-Europeaninfrastructure projects for transport, energy and informationand communication technologies;

▶ a higher quality of spending thanks to simpler rules forEU funds, a clear focus on investments producing tangibleresults, as well as the possibility of suspending EU funding

if a country fails to implement sound economic and fiscalpolicies;

▶ a reformed common agricultural policy for a morecompetitive and environmentally friendly Europeanagriculture;

▶ the fight against climate change as a key componentof all major EU policies and devoting 20 % of the2014–20 MFF to actions against climate change;

▶ solidarity with the poorest EU countries and regions byconcentrating the largest portion of regional funding inthose parts of the EU and by introducing a new youthemployment fund;

▶ reduced administrative expenditure growth thanks tocuts in staffing numbers at European institutions.

Too many EUcivil servants?

There are around 55 000 EU civil servants andother employees serving 508 million Europeansand countless people in need around the world.By comparison, the German Finance Ministryalone employs more people than the EuropeanCommission’s services responsible for financialaffairs, taxation and budget (1 850 v 1 542).Furthermore, in order to adapt to the harsheconomic situation in Europe, the EU institutions arealso cutting costs: the Commission’s wide-rangingstaff reform is expected to save EUR 8 billion by2020, reducing its staff by 5 %, while at the sametime increasing its working hours.




The EU budget and SlovakiaIn 2012, Slovakia’s public expenditure amounted to aroundEUR 27 billion — much less than the EUR 136 billion EU

budget for the same year. However, it represented 39 % ofthe country’s GNI, whereas the EU budget for the 27 Member

States at that time was roughly 1 % of the Union’s GNI.

The EU and national budgets serve different yetcomplementary purposes. The EU budget targets areaswhere EU money can generate added value. For example,a project of such magnitude as the European satellitenavigation system Galileo could not be financed by a singleMember State alone.

Unlike Slovakia’s budget — or any other national budget —the EU budget does not fund defence expenditure orsocial protection, but is mostly investment spending.For example, as an effective transport network is essential

0 %

10 %

20 %

30 %

40 %

EUSlovakia

1.05 %

39 %

Administration

6 %

Citizenship, freedom,

security and justice

1 %

The EU as a global player

5 %

Natural resources

43 %

Sustainable

growth

45 %

EUR 136 billion

for a successful economy, the EU is co-financing theconstruction of a motorway linking Slovakia to Poland andthe Czech Republic.

Slovakia is one of the EU member countries that receivesmore from the EU budget than it contributes, and

will remain so throughout the next budgetary period(2014–20). Bear in mind that this net balance does notaccurately reflect the many benefits of EU membership.Many of them, such as peace, political stability, securityand freedom to live, work, study and travel anywhere in theUnion cannot be measured.

The EU budget v national expenditure

The EU budget in 2012




Growth

and jobs

3 %

Citizenship, freedom,

security and justice

1 %

Agriculture and

rural development27 %

Regional policy

69 %

Total

EUR 2.3 billion

B e l g i u m

B u l g a r i a

C z e c h R e p u b l i c

D e n m a r k

G e r m a n y

E s t o n i a

I r e l a n d

G r e e c e

S p a i n

F r a n c e

I t a l y

C y p r u s

L a t v i a

L i t h u a n i a

L u x e m b o u r g

H u n g a r y

M a l t a

N e t h e r l a n d s

A u s t r i a

P o l a n d

P o r t u g a l

R o m a n i a

S l o v e n i a

S l o v a k i a

F i n l a n d

S w e d e n

U n i t e d K i n g d o m

– 1

0

1

2

3

4

5

6

In addition, European investments are intended to benefitthe EU as a whole, and European funding in one countrycan benefit other EU Member States. Through the internalmarket, Slovakian companies have unlimited access to508 million consumers. With more than 80 % of its exportsgoing to EU countries in 2012, this is of significant benefit

for Slovakia. The country is also quickly catching up withthe European average in terms of development: since itentered the EU, the Slovakian GDP per person rose from57 % in 2004 to 75 % of the EU average in 2012.

EU funding in Slovakia (2012)

Operating budgetary balance 2012 (% of GNI)

Operating budgetary balance: the difference between what a country receives from and pays into the EU budget. There are many possible methods of calculating budgetary balances. In its financial report,

the Commission uses a method based on the same principles as the calculation of the correction of budgetary imbalances granted to the United Kingdom (the UK correction). It is, however, important

to point out that constructing estimates of budgetary balances is merely an accounting exercise of the purely financial costs and benefits that each Member State derives from the Union and it gives no

indication of many of the other benefits gained from EU policies such as those relating to the internal market and economic integration, not to mention political stability and security.




Regional policy

The largest share of the money that Slovakia receives fromthe EU budget goes to its regions (69 %). The EU regionalpolicy aims to reduce the economic, social and territorialdisparities between Europe’s regions and countries. Itinvests in projects supporting job creation, competitiveness,economic growth, improved quality of life and sustainabledevelopment. Transport infrastructure and the environmentand are top priorities for Slovakia. Consequently, the EU has

contributed to the modernisation of wastewater treatmentfacilities in the Trenčín region, and invested in new trainsfor the Slovakia Railway Company.

Agriculture and rural development

The second largest area of EU expenditure in Slovakia isagriculture and rural development (27 %). EU agriculturalpolicy promotes safe and good food and supports farmers— the income per agricultural worker increased by 83 %between 2004, when the country joined the EU, and 2012.Funding also looks after the environment and stimulatesrural economies, for example by helping to renovate sometourist accommodation in the Žilina region.

Did you know thatagriculture is the onlypolicy funded almostentirely by the EU?

That is why it represents a large proportion of theEU budget. It is also less costly for EU countries asa whole than implementing 28 different nationalpolicies. The common agricultural policy hasundergone a major reform, whereby its share of theEU budget has fallen from 70 % in 1985 to around40 % today, and is set to continue falling to 33 %in 2020. A new reform which comes into force in2014 further strengthens European agricultural

competitiveness, making it more environmentallyfriendly and reducing the gap for countries likeSlovakia, which receive lower direct payments thanthe EU average. At the same time, Slovakia will stillreceive higher funds for rural development.




EU projects near youInfrastructure and transport

NEW MOTORWAY LINKING SLOVAKIA TO THE CZECHREPUBLIC AND POLAND

The new four lane section of the D3 motorway will stretch

from the village of Hričovské Podhradie in the Žilinaregion, to the outskirts of Žilina. Once completed, some696 000 people in the region around the town of Žilina areexpected to benefit from improved connections and roadsafety. The new motorway section is of vital importancenot only for the region, but also for the country as a whole,as it will improve connections with neighbouring countries.(EU funding: EUR 67.5 million)

SLOVAKIAN RAILWAYS UPGRADED

The Slovakia Railway Company has replaced or modernisedits trains in the Bratislavský Kraj, Západné Slovensko,Stredné Slovensko and Východné Slovensko regions. Thenew equipment, which is more environmentally friendly andsafer, will make it possible to transport more passengersand will make journeys more comfortable. (EU funding:EUR 88.5 million)

Agriculture and rural development

COSY COTTAGE GETS A MAKEOVER

Are you looking for a nice holiday rental? An enterprisinglocal from Zuberec in the Zilina region — a popular holidaylocation surrounded by mountains and lakes — was ableto use EU funds to restore an old cottage, turning it intomodern tourist accommodation. This type of initiative

not only supports the development of rural tourism — italso helps creating employment for local inhabitants. (EUfunding: EUR 675 799)

OVER EUR 1 MILLION IN EU FUNDING FOR ŽILINA FARMS

The farming company Agrosev has thousands of hectaresof land in the Žilina Region, but its outdated technologyand machinery had prevented it from fully exploiting its

potential. EU funds helped the farm to buy new equipmentand significantly modernise its facilities. Competitivenessshot up as the quality and efficiency of crop and livestockproduction improved. (EU funding: EUR 1.3 million)

Slovakian railways upgraded




Education and culture

THE ERASMUS PROGRAMME

Some 2 685 Slovak students studied or worked abroad in2011–12 thanks to the Erasmus exchange programme,and the country welcomed 1 355 students from otherEuropean countries. The experience enriches students’lives academically and professionally, but also improveslanguage and intercultural skills. Young Slovaks received

an average monthly grant of EUR 413 from the EuropeanCommission towards the extra costs of living abroad.

FROM OLD SWIMMING POOL TO EXHIBITION HALLIN KOŠICE

Košice is European Capital of Culture in 2013. It is the firstSlovak city to be awarded the prestigious title. With morethan 200 cultural events organised in 70 locations, it is an

excellent opportunity for the city to attract more touristsand rethink its development through culture. One of thekey attractions is the Hall of Art, an old swimming-pool,transformed into an exhibition hall for contemporary art.

Growth and jobs

BRINGING QUALIFIED DOCTORS TO THE ŽILINA REGION

The rural Žilina region has suffered from a lack of qualifiedmedical specialists in dentistry, anaesthesiology andintensive medicine, clinical oncology, clinical immunologyand allergies. ‘The project increased and supportedthe skills of health workers reflecting regional needs,’said Katarína Mičencová who coordinated the project.A total of 25 physicians — six dentists, four GPs and15 anaesthetists and intensive-care specialists — receivedtraining in their fields. (EU funding: EUR 55 610)

Research and innovation

REVOLUTIONARY NEW MATERIAL

Discovered by scientists at Manchester University, grapheneis set to become the wonder material of the 21st century,becoming as important as steel or plastics. The GrapheneProject brings together academic and industrial researchgroups, including a Slovak research company, to investigateand exploit the unique properties of the material. (EUfunding: EUR 54 million)

Environment and energy

CLEANER WATER FOR THE REGION OF TRENČÍN

The six agglomerations of Trenčín, Nové Mesto, TrenčianskaTeplá, Trenčianske Teplice, Trenčianske Stankovce andChocholná Velčice will see their wastewater treatmentfacilities improved thanks to EU funds. New or upgradedwastewater treatment plants and sewage systems willreduce water pollution, leading to safer, healthier water forinhabitants. (EU funding: EUR 48.3 million)

Did you know?

Slovak writer Jana Beňová was one of the

winners of the 2012 European Union Prize for

Literature for her books Café Hyena and SeeingPeople Off . Every year, the European Union

Prize for Literature rewards the best new or emerging

authors in the EU. Each winner receives EUR 5 000

and priority funding from the EU culture programmeto get the book translated into other languages.




BIOENERGY RECONSTRUCTION OF BOILER ROOMS

Several villages from the Poľana region came together toreplace the coal boilers used to heat municipal premiseswith boilers using local wood waste. The project slashedenergy bills, reduced pollution and gave the region greaterenergy independence. (EU funding: EUR 6.7 million)

A SAFE PATH FOR MIGRATING ANIMALS

Several ‘green bridges’ enabling wild animals to crossmotorways have been built in the alpine area separatingthe Austrian Alps and the Carpathian mountains. Theinfrastructures help to protect local biodiversity and preventcollisions with cars. The area is home to some of Europe’srarest species, such as the brown bear, wolf, lynx and reddeer. (EU funding: EUR 1.5 million)

Cover photo © SerrNovik — Fotolia-com, page 9 ©Marián Rajnoha., page 11 © bonninturina — Fotolia.com

More information on the European Union is available on the Internet (http://europa.eu).Luxembourg: Publications Office of the European Union, 2014

ISBN 978-92-79-36698-7doi:10.2761/23923

© European Union, 2014Reproduction is authorised provided the source is acknowledged.

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