Understanding EU Funding – The Three Areas of EU Funding that You Should Know

The EU has a total budget of €1,074.3 billion for the years from 2021 to 2027. In addition to this, there is an extra €750 billion from the special coronavirus fund ‘Next Generation EU’. Most of this money will be redistributed as EU funding.

It’s not that difficult to understand the structure of EU funding. Take some time to immerse yourself in the EU funding system. Once you are familiar with the three central pillars of EU funding and can assign your own ideas to one of these areas, you will already be well on the way towards making a successful EU funding application.

The EU’s Three Central Funding Goals

To simplify it somewhat, it is possible to identify three central EU funding goals:

  1. Promoting cross-border cooperation between different organisations and companies in EU member states in order to jointly develop better solutions for current challenges.
  2. Supporting EU organisations and companies in their cooperation with countries outside the EU or in their operations outside the EU.
  3. Promoting economic and social development in all EU regions. This means that more funding is directed at regions that are less economically developed.

It is important to understand this system, since it will make it easier for you to find your way through the EU funding jungle. The three EU funding goals presented above make it possible for us to distinguish between the three central pillars of EU funding.

The First Pillar: Union Programmes

The ‘Union Programmes’ pillar includes well-known funding programmes such as Horizon Europe, Erasmus+, Creative Europe, LIFE, etc.

The most important characteristics of this area of funding are that:
  • Priority is given to cross-border projects within EU member states.
  • Several organisations or companies work together in European partner consortia, usually with at least three partner organisations from at least three different countries.
  • There are usually competitive calls for proposals with standardised rules and specifications that apply to the entire EU territory. The highest rated applications receive funding.
  • Applications for funding are usually submitted in Brussels, although some applications can also be submitted to national agencies in the member states.
  • English is the main application language, but other languages are also possible.
  • Approximately €218 billion will be available for this pillar between 2021 and 2027. €12.5 billion of this comes from the special coronavirus fund ‘Next Generation EU’.

The Second Pillar: The EU as a Global Player – Foreign Aid Programmes

In this area you will find funding programmes such as the Instrument for Pre-Accession Assistance (IPA) or the Neighbourhood, Development and International Cooperation Instrument (NDICI/Global Europe).

The most important characteristics of this funding area are that::
  • Funding is for projects in so-called third countries and for international projects outside the EU. Third countries are all countries that are not EU members.
  • As a general rule, several organisations or companies from the EU and third countries work together in partner consortia.
  • There are usually competitive tenders with standardised rules and specifications that apply across the entire EU or for the third country to be supported by the funding. The higest rated applications receive funding.
  • Applications are submitted in Brussels or in the relevant third country.
  • English is the main application language.
  • Approximately €98 billion will be available for this pillar between 2021 and 2027.

The Third Pillar: National Funding

This pillar includes well-known funds such as the European Social Fund Plus (ESF+) or the European Agricultural Fund for Rural Development (EAFRD).

The most important characteristics of funding allocation in this area are as follows:
  • Funding is decentralised. In other words, there are national, regional or local funding calls in the respective EU member states or regions.
  • Funding is available for national, regional and local projects and investments in all EU member states.
  • Funding is available for individual companies and organisations, and some funding is also available for individuals. This area of ‘national funding’ also includes funding for cooperative projects with a consortium that consists of different partner organisations.
  • Applications are submitted in the relevant national language.
  • Approximately €1,435.3 billion euros are available for this pillar between 2021 and 2027. €737.5 billion of this comes from the special coronavirus fund ‘Next Generation EU’. The individual shares of the EU member states in this overall budget are determined before the start of each seven-year EU funding period, with the current period stretching from 2021 to 2027.

How Should I Use This Structure?

The above distinction between three funding pillars is a simplified representation of the EU funding system. There are grey areas and EU funding experts could name exceptions to each area of this rule. In practice, it is not always completely possible or accurate to delineate or assign the funding programmes to one of these three areas. However, the basic structure outlined here applies to most EU funding programmes and proven itself to be very helpful.

You should start by thinking about which of these three areas your project idea could be allocated to before beginning a detailed search for a suitable funding programme. You will soon realise that you will then be able to search more systematically, more quickly and more successfully.

Useful Links and Further Information

Have we aroused your interest in the topic of EU fundraising? The EU has many opportunities to help you co-finance your activities in Europe. You can find additional tips on EU funding here. You can find out where to start your funding research here.

You can find further helpful articles and tips in this upgrade2europe learning tool, in our learning videos and in our upgrade2europe handbook. In the handbook you will also find an introduction to the ‘Logical Framework Approach’ tool, the standard tool for developing EU projects, in particular funded projects linked to the first and second pillars presented above. You can use our self-assessment tool if you would like to immediately check online to what extent your organisation is well positioned for Europe.