Written by Sidonia Mazur.

Pilot projects and preparatory actions (PPs and PAs) are tools in the EU budget designed to test new policy initiatives or prepare the ground for the adoption of future programmes. PPs and PAs give Members of the European Parliament (MEPs) the possibility to initiate innovative policies and fund them before a legal act has been adopted. The financing of both new PPs and PAs and those continued from previous years must be included in the EU budget under the annual budgetary procedure.

What are PPs and PAs?

PPs and PAs are covered by Article 58(2) of the EU’s Financial Regulation, which states that ‘pilot projects of an experimental nature’ are meant to test ‘the feasibility of an action and its usefulness’. Preparatory actions, meanwhile, are designed to ‘prepare proposals with a view to the adoption of future actions’.

PPs and PAs are an exception to the rule that appropriations may be entered in the EU budget only if a legal act has been adopted authorising the expenditure in question: PPs and PAs cannot be used for expenditure for which a legal basis already exists. Therefore, PPs and PAs are an attractive way for MEPs to transform their political ideas into future EU policies and programmes without waiting for legal initiatives from the European Commission. The European Parliament is not the only institution that has the right to propose PPs and PAs. The Council and the Commission can also put forward PPs and PAs, but very rarely do so.

How much money is available for PPs and PAs?

The total amount of appropriations in any budgetary year cannot exceed €40 million for pilot projects, and €100 million for preparatory actions. This means that the total maximum annual allocation for PPs and PAs combined is €140 million. However, the total amount of appropriations actually committed for new preparatory actions must not exceed €50 million. The EU can make a budgetary commitment for a pilot project for no more than 2 consecutive financial years. Budgets for a preparatory action, which often follows a pilot project, are limited to a maximum of 3 years.

Moreover, allocations for PPs and PAs must fit under the annual ceiling in commitments per heading set under the multiannual financial framework for each budgetary year. If a preparatory action is successful, a legal basis for that action could be prepared with a view to the new policy in future functioning under its own legal basis. Moreover, the lessons learnt from the implementation of a PP or a PA might result in the modification of an existing legal basis.

How are PPs and PAs adopted in the EU’s annual budgetary procedure?

The Parliament’s general budget rapporteur presents, in agreement with the other political groups’ shadow rapporteurs on the general budget, a compromise package of PPs and PAs, which the Committee on Budgets (BUDG) usually votes on as a block amendment. The compromise package is based on Parliament’s priorities, as set in Parliament’s general guidelines for the preparation of the budget for the following year. Under Rule 96 of Parliament’s Rules of Procedure (RoP), Parliament gives particular priority to PPs and PAs originating from its legislative initiative reports in accordance with Article 225 of the Treaty on the Functioning of the EU (TFEU) and Rule 47 of the RoP. During the budgetary negotiations with the Council, individual PP and PA budgetary allocations can still change.

A parallel EPRS briefing on the EU’s annual budgetary procedure explains the steps, deadlines and actors involved in the annual budget-making exercise in the European Parliament.

Pre-assessment by the European Commission

In line with the Interinstitutional Agreement on budgetary discipline, cooperation in budgetary matters and sound financial management, MEPs and the Council must propose pilot projects and preparatory actions to the Commission for pre-assessment before the July interinstitutional negotiations (trilogues) between the Council, the Commission and the Parliament. Following the ‘Parliament 2024’ reform, the committee responsible for budgetary issues must send proposed PPs and PAs to the Commission only when those proposals have the support of a committee, a political group or Members reaching at least the low threshold (one 20th of Parliament’s component Members). The proposals are collected by the BUDG committee secretariat. Pre-assessments are mandatory under Rule 96 of the RoP. Pre-assessment participation is possible exclusively through a dedicated electronic form (downloadable from the BUDG eCommittee website) and limited to the Commission’s three working languages (English, French and German). According to Rule 96 of the RoP, PPs and PAs linked to Parliament’s legislative initiative reports in accordance with Article 225 TFEU and Rule 47 of the RoP are sent for information to the Commission and given priority during the vote.

The Commission evaluates the proposals using the following grading.

• Category A: PP/PA could be implemented as suggested by the European Parliament.
• Category B: PP/PA might under certain conditions be fully or partially implementable, but the project would need to be re-designed, or more information might be needed.
• Category C: PP/PA is fully covered by an existing legal base, or the ideas are otherwise being addressed.
• Category D: PP/PA cannot be implemented, or similar actions have already been carried out in the past.

Authors of PPs and PAs can use the feedback from the Commission to improve the design of their PP or PA proposal further and ask for re-assessment over the summer. Parliament’s budget rapporteur intends to include in the compromise package only those PPs or PAs that the Commission assessed as category A or B, as well as those PPs and PAs Parliament considered essential. All PP and PA proposals submitted for pre‑assessment, as well as those re-assessed, must also be tabled as budgetary amendments by the deadline set in the respective specialised committee or in BUDG.

Read this ‘at a glance’ note on ‘Pilot projects and preparatory actions in the annual EU budgetary procedure‘ in the Think Tank pages of the European Parliament.