2. THE 2012 GOVERNMENT BUDGET OF THE EUROPEAN UNION
UĞUR ERYILMAZ
YİĞİT GÜREL
SÜVEYDA KAVAK
MANALJAV LKHAGVAJARGAL

3. HOW IS THE EU BUDGET DECIDED?
Based on the multiannual financial framework in force and the budgetguidelines for the coming year, the European Commission prepares the draft budget, and submits it to the Council and Parliament. Thebudgetary authority, comprised of the Council and the Parliament, amends and adopts the draft budget.
In case of disagreement between Parliament and Council a specific Conciliation Committee is convened with the task of reaching agreement on a joint text within a period of 21 days, subject to the approval of both arms of the budgetary authority. If the joint text is rejected by the Council, the European Parliament has the right to ultimately approve the budget

4. Revenue and expenditure – balanced-budget requirement
When the EU Council and the European Parliament approve the annual EU budget, total revenue must equal total expenditure. This information shows us classical budget system is used in EU budget.
In practice, however, actual revenue and expenditure often differ from the estimates. There is usually a surplus, which is used to reduce EU countries' contributions to the budget for the following year.

5. How is the budget financed?

6. Where does the money come from?
The EU budget:
is funded chiefly (99%) from the EU’s own recourse, supplemented by other recourses of revenue
is based on the principle that expenditure must be matched by revenue
has in-built schemes to compensate certain EU countries
Own resources account for 99% of the budget. They are not allowed to exceed 1.23% of the EU's gross national income (GNI).
The remaining 1% of budget revenue comes from other sources of income.
Where does the money come from?

7. Own resources
Own resources provide the EU's main revenue. There are three kinds of own resources.
Traditional own resources
Own resource based on gross national income (GNI)
Own resource from value added tax (VAT)

8. Other revenues taxes on EU staff salaries
contributions from non-EU countries to certain programmes
fines on companies for breaching competition laws, etc.

10. Where does the money go? Sustainable growth
Preservation and management of natural resources
Citizenship, freedom, security and justice
EU as global player
Administration
Compensations

11. REALISTIC BUDGET OF EU 2012
The European Union budget for 2012 has been increased by two per cent, despite European authorities targeting a budget increase of approximately five per cent for next year. The budget will now stand at €129,000,000,000 (US$174,000,000,000 or £110,000,000,000).
The European Commission had wished for a budget increase of 4.9% for At the same time, the European Parliament was aiming to achieve an increase of 5.2%. Such targets were objected to by the governments of various EU member countries; they were considered "unrealistic".

12. A VIEW OF EP Budgets Committee chair Alain Lamassoure
EP Budgets Committee chair Alain Lamassoure warned that too low an increase in payment appropriations for the 2012 budget – the Council had proposed +2.02% – might be misleading for citizens as the Commission estimates 4,9% increase is necessary. “Last year the Council insisted on a maximum increase of 2,91%, whereas both the Commission and Parliament warned that it would be too low with all the investment programmes taking off at a crucial moment. The result is that we now have to repair the budget for 2011 by adding extra funds. The 2011 budget has now already increased by over 3.35% and might increase even more. We have to avoid having to do the same thing this time next year.”

13. Statement of Commissioner Lewandowski on the adoption of the 2012 EU budget
"I am pleased that the Council and the European Parliament have reached an agreement
on the 2012 EU budget this Saturday morning. The increase in payments on 2011 is
1.85%, amounting to €129 billion. This is clearly an austerity budget as most Member
States are in the midst of a serious financial crisis.
I also welcome the fact that, unlike last year, both arms of the budgetary authority have
adopted the EU budget before the end of the conciliation procedure.”

14. The EU budget 2012 - The figures (CA: commitment appropriations - PA: payments appropriations):

16. REFERENCES http://ec.europa.eu/budget/index_en.cfm
Financial Programming and Budget