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Editura Universitară The Budget of the European Union: Financing Options for Member States

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Publisher: Editura Universitară

Author: Brenda-Andreea Piuaru

Edition: I

Publisher year: 2024

Pages: 114

ISBN: 978-606-28-1898-2

DOI: 10.5682/9786062818982

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This work, titled The Budget of the European Union: Financing Options for Member States, systematically and comprehensively addresses the functioning of this complex financial mechanism, starting from the basic concepts of the budget and progressing to modern methods of its foundation, the specificities of the EU budget, and the funding opportunities available to member states.
Structured into five chapters, the book initially explores the theoretical framework of public budgets and public finances, providing the reader with a clear perspective on how national and European budgets operate. The author then analyzes in detail the methods of budget formulation, both classical and modern, placing special emphasis on recent innovations in budget management, such as effectiveness based and objective driven methods that have transformed resource allocation processes at the European level.
The central chapter of the work is dedicated to the budget of the European Union, reviewing its historical evolution and the unique characteristics it presents compared to national budgets. The author details the multiannual financial framework, budget management, sources of revenue, and types of expenditure, all of which illustrate the crucial role the budget plays in achieving the political and economic objectives of the Union.
A major attraction of the work is the chapter dedicated to funding options for member states. In this section, readers will discover the diversity of financial instruments available, ranging from grants and subsidies to trust funds and public procurement contracts. This part of the book provides a clear overview of how member states can access and utilize these resources to stimulate economic growth, innovation, and sustainable development.
In conclusion, the paper ends with an analysis of the Multiannual Financial Framework 2014 – 2020, the Multiannual Financial Framework 2021 – 2027, and the NextGenerationEU initiative—two key instruments in the post pandemic economic recovery process that offer the European Union and its member states new investment opportunities for their common future.
This book is intended for both specialists in economics and public finance, as well as those interested in European public policies. Through a clear and detailed presentation of the European Union budget and funding options, the work offers a valuable guide for understanding and utilizing the resources available in the community space. I hope this book contributes to a better awareness of European budgetary mechanisms and to a more effective use of European funds for the benefit of member states and their citizens.
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BRENDA-ANDREEA PIUARU is a professional with experience in the field of non-reimbursable financing, especially European ones. After almost two decades of activity in this field, he returned to the academic environment under the guidance of Prof. Univ. Dr. Bianca Tescașiu and a team of recognized professors from Transilvania University in Brașov, such as Prof. Univ. Dr. Gheorghe Epuran, who enriched her research with perspectives on the theory of information asymmetry, Ms. Prof. Dr. Bianca Chițu, who inspired her to explore the marketing dimension within European funding and Ms. Prof. Dr. Ileana Tache, who guided - will pay special attention to non-governmental organization beneficiaries. His research carried out during his doctoral studies is appreciated for the coherence of his vision and the rigorous approach to complex topics related to communication, public budget, European funding and the application of information asymmetry theory.
In parallel with her academic work, the author is actively involved in a variety of grant projects, participating in social transformation and innovation projects of non-governmental organizations, helping them obtain funding for important projects and causes. By collaborating with NGOs, it transformed valuable ideas into concrete actions, contributing to the sustainable development of communities and supporting relevant social causes.

LIST OF FIGURES / 9

LIST OF TABLES / 10

PREFACE / 11

FOREWORD / 13

CHAPTER 1
THE BUDGET – CONCEPTUALIZATION AND PARTICULARS
/ 15
1.1. The budget concept / 16
1.1.1. Definition of the budget / 16
1.1.2. The public budget in theory / 17
1.1.3. The public budget in practice / 18
1.2. Public revenues / 23
1.3. Public expenses / 25
1.4. Surplus, deficit, budget balance / 28

CHAPTER 2
METHODS OF FUNDING THE BUDGET
/ 30
2.1. Classic methods of substantiating the budget / 31
2.1.1. Automatic method / 31
2.1.2. Increase/decrease method / 32
2.1.3. Direct evaluation method / 32
2.2. Modern methods of substantiating the budget / 33
2.2.1. Cost advantage or cost effectiveness method / 33
2.2.2. Planning, programming, budgeting or PPBS method / 34
2.2.3. The method of management by objectives or the MBO method / 35
2.2.4. Zero budget base method or ZBB / 35 method
2.2.5. The method of rationalizing budget options or the RCB / 36 method

CHAPTER 3
BUDGET OF THE EUROPEAN UNION
/ 38
3.1. The evolution of the EU budget / 40
3.2. Specificity of the EU budget / 44
3.2.1. The multiannual financial framework and the annual budget / 45
3.2.2. Management and execution of the EU budget / 48
3.2.3. The size of the EU budget / 49
3.3. Revenues and expenses of the EU budget / 52
3.3.1. EU budget revenues / 55
3.3.2. EU budget expenses / 62

CHAPTER 4
FINANCING OPTIONS FOR MEMBER STATES
/ 67
4.1. Grants / 68
4.2. Financial instruments / 70
4.3. Trust funds / 72
4.4. Awards / 74
4.5. Subsidies / 77
4.6. Public procurement contracts / 78

CHAPTER 5
MULTIANNUAL FINANCIAL FRAMEWORK 2014 – 2020, MULTIANNUAL FINANCIAL FRAMEWORK 2021 – 2027 AND NextGenerationEU
/ 80
5.1. MULTIANNUAL FINANCIAL FRAMEWORK 2014 – 2020 / 81
5.1.1. European Regional Development Fund (ERDF) / 82
5.1.2. European Social Fund (ESF) / 82
5.1.3. Cohesion Fund (FC) / 83
5.1.4. European Agricultural Fund for Rural Development (FEADR) / 84
5.1.5. European Fund for Fisheries and Maritime Affairs (FEPAM) / 84
5.2. MULTIANNUAL FINANCIAL FRAMEWORK 2021 – 2027 / 85
5.2.1. Fund for a Just Transition (FTJ) / 85
5.2.2. European Social Fund Plus (ESF+) / 86
5.3. NextGenerationEU / 86

BIBLIOGRAPHY / 90

ANNEXES / 98
APPENDIX 1 / 98
APPENDIX 2 / 104
APPENDIX 3 / 105

The European Union (EU) budget is a key element of the European integration mechanism and a primary driver of economic and social development within the community space. Over the decades, the way in which member states contribute to and benefit from this budget has become a highly significant topic in the European public debate. In a dynamic and often unpredictable global context, the EU budget is no longer merely a matter of public accounting but a strategic tool for the stability and growth of the Union.
This work, titled The Budget of the European Union: Financing Options for Member States, systematically and comprehensively addresses the functioning of this complex financial mechanism, starting from the basic concepts of the budget and progressing to modern methods of its foundation, the specificities of the EU budget, and the funding opportunities available to member states.
Structured into five chapters, the book initially explores the theoretical framework of public budgets and public finances, providing the reader with a clear perspective on how national and European budgets operate. The author then analyzes in detail the methods of budget formulation, both classical and modern, placing special emphasis on recent innovations in budget management, such as effectiveness based and objective driven methods that have transformed resource allocation processes at the European level.
The central chapter of the work is dedicated to the budget of the European Union, reviewing its historical evolution and the unique characteristics it presents compared to national budgets. The author details the multiannual financial framework, budget management, sources of revenue, and types of expenditure, all of which illustrate the crucial role the budget plays in achieving the political and economic objectives of the Union.
A major attraction of the work is the chapter dedicated to funding options for member states. In this section, readers will discover the diversity of financial instruments available, ranging from grants and subsidies to trust funds and public procurement contracts. This part of the book provides a clear overview of how member states can access and utilize these resources to stimulate economic growth, innovation, and sustainable development.
In conclusion, the paper ends with an analysis of the Multiannual Financial Framework 2014 – 2020, the Multiannual Financial Framework 2021 – 2027, and the NextGenerationEU initiative—two key instruments in the post pandemic economic recovery process that offer the European Union and its member states new investment opportunities for their common future.
This book is intended for both specialists in economics and public finance, as well as those interested in European public policies. Through a clear and detailed presentation of the European Union budget and funding options, the work offers a valuable guide for understanding and utilizing the resources available in the community space. I hope this book contributes to a better awareness of European budgetary mechanisms and to a more effective use of European funds for the benefit of member states and their citizens.

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