1. The EUROPEAN UNION’S BUDGET

2. The EU Budget Problems of the financial perspective 2007-2013
Is not the sum of the EU Member States Budgets
Since 1988, it is a multiannual planning instrument
Financial perspectives
Problems of the financial perspective
Enlargement
Financial crisis
Geo-political changes (oil price, turbulences in Middle East, Asian emerging economies, etc)

3. The EU Budget
is funded mainly by its own resources (99%) and other sources of revenue
the own resources are not allowed to exceed 1,23% of the EU’s GNI
total revenue must equal total expenditure.

4. Resources Traditional own resources Other sources:
Mainly customs duties on imports from outside the EU
Variable levis on agricultural products
own resource from value added tax (VAT)
own resource based on gross national income (GNI)
Other sources:
taxes on EU staff salaries
contributions from non-EU countries to certain programmes
fines on companies for breaching competition laws, etc.

5. Expenses
The multiannual financial framework lays down maximum amounts  for each broad category of expenditure ('headings' for a clearly determined period of time (several years).
 financial framework had as  objectives:
headings 1 and 2: harnessing European economic integration (the "single market") to the broader goal of sustainable growth, by mobilising economic, social, and environmental policies.
heading 3: strengthening the concept of European citizenship by creating an area of freedom, justice, security and access to basic public goods and services.
heading 4: establishing a coherent role for Europe on the global stage – inspired by its core values – in the way it assumes its regional responsibilities, promotes sustainable development and contributes to civilian and strategic security

6. For

7. EU BUDGET AS % OF THE TOTAL EU’s GDP

8. Funding of the EU Budget
EU’s budget must balance every year
Financing sources: four main types
Tariff revenue
‘Agricultural levies’ (tariffs on agricultural goods)
‘VAT resource’.
Like a 1% value added tax (reality is complex).
GNI based.
tax paid by members based on their GNI.
Miscellaneous
relatively unimportant since 1977
taxes paid by eurocrats, fines and earlier surpluses
Pre-1970s direct member contributions

9. Evolution of Funding sources

10. Contribution vs GDP, 1999, 2000
% of GDP per member is approximately 1% regardless of per-capita income
EU contributions are not ‘progressive’
e.g. richest nation, (L) pays less of its GDP than the poorest nation (P)

11. Net Contribution by Member

12. EU Budget expenditures

13. The budget: Expenditure

14. Evolution of spending priorities

15. Evolution of spending, level

16. Evolution of spending level