• 1.2

At the roots of European projects

A major global player 3

The European Union is one of the most important political and economic players in the world:

  • by population (the EU is the third largest “bloc” in the world by population weight, after China and India);
  • per GDP (the EU is the second largest market in the world, after the United States and before China);
  • by trade (the EU the world’s largest exporter, ahead of China and the United States);
  • for foreign investment (the EU is the world’s largest source and destination of investment);
  • by cultural heritage (the EU is by far the world’s leading tourist destination);
  • by role in international cooperation (the EU is by far the largest funder of international cooperation projects).

The European Union has ensured the longest period of peace in Europe and the largest union of peoples ever in history, based on the principles of the rule of law, democracy, freedom and equality. The EU won the Nobel Peace Prize in 2012.

The goals and achievements of the EU 4

Membership in the European Union has a significant impact on many aspects of our daily lives.

  • The use of a single currency makes European economies more stable and more competitive globally.
  • The Schengen agreements guarantee European citizens maximum freedom of movement between member states.
  • The single market broadens the horizon of European businesses and protects product quality and consumer health.
  • European institutions promote civil and social rights, innovation and sustainable development in member countries and around the world.
  • The EU carries a vision in dealing with emergencies (Covid19) and major global challenges (combating climate change, fighting poverty, technological innovation).

These, in sum and without any claim to exhaustiveness, are the major goals and achievements of European construction, adopted in a progressive manner at the initiative of its member states.

A unique institutional arrangement 5

The European Union is not a state, but it possesses many of the attributes that characterize it. For example:

  • A binding legislative process within member states, compliance with which is overseen by a European Court of Justice;
  • Democratic representativeness (the European Parliament, elected by universal suffrage, has binding powers in the appointment of the European Commission, the legislative process and the approval of the EU budget);
  • Competence (partial or total) over some of the typical prerogatives of states, such as monetary policy, fiscal policy, and foreign and security policy;
  • The availability of its own resources independent of those of member states to implement its policies.

European projects are among the main tools available to EU institutions to implement their policies. Therefore, as such, they are the recipients of a specific allocation within the community budget and are subject to a complex legislative process, which includes priority setting, extensive strategic and political debate, technical formulation and a vote of approval, involving all EU institutions (in particular, the European Commission, the European Parliament and the EU Council).

This process is particularly important for those working with European funds: the legislative process determines the nature of the projects that will be funded, while the community budget identifies the amount of available allocations.

The EU budget 6

The EU budget for the 2021-2027 programming period (known as the Multiannual Financial Framework, or MFF) amounts to 1,074.3 billion euros, plus special resources from the “NextGenerationEU” program (the so-called “Recovery Fund”), amounting to 750 billion euros. The total allocation is 1,824.3 billion euros (all amounts are in 2018 prices).

  • EU resources account for about 1.40 percent of Community Gross National Income. They are financed by a small percentage levied on each state’s Gross National Income, by duties levied on EU trade with third countries, by a levy (0.30 percent) on the VAT collected by each state, and by a rate (€0.80 per kg) on plastic packaging generated and not recycled in each member state.
  • NextGenerationEU’s additional resources (750 billion euros) are financed separately through borrowing from capital markets. There is a temporary mechanism for obtaining the funds needed to repay these loans, and discussions have been initiated to establish new EU “own resources.”
  • Total resources for the period 2021-2027 are allocated as follows. Data shown are in millions of euros at 2018 prices. Within the various headings are many of the funding lines that will be discussed later, such as Horizon Europe, InvestEU, ReactEU, Erasmus+, LIFE, ERDF or ESF+.
Budget lines 2021-2027 MFF NGEU TOTAL
I. Single market, innovation and digital agenda 132.781 10.600 143.381
II. Cohesion, resilience and values 377.768 721.900 1.099.668
III. Natural resources and environment 356.374 17.500 373.874
IV. Migration and border management 22.671 22.671
V. Security and defense 13.185 13.185
VI. Neighborhood and the rest of the world 98.419 98.419
VII. European public administration 73.102 73.102
Total 1.074.300 750.000 1.824.300