1. Asst. Prof. Dr. Alexander Bürgin IUE1 The Budget Repetition

2. Asst. Prof. Dr. Alexander Bürgin IUE2 The Budget 1. Expenditures

3. Asst. Prof. Dr. Alexander Bürgin IUE3 The size of the budget is relatively small Around 1 % of the total Gross National Income of the EU and 2.5% of public expenditures of MS Reason: EU policies are mostly regulative and not distributive or redistributive

4. Asst. Prof. Dr. Alexander Bürgin IUE4 Structure and Ceiling for the period 2007-2013 http://ec.europa.eu/budget/budget_glance/what_for_en.htm

5. Asst. Prof. Dr. Alexander Bürgin IUE5 http://ec.europa.eu/budget/index_en.htm

6. Asst. Prof. Dr. Alexander Bürgin IUE6 CAP-expenditures are the biggest part of the EU-budget Reasons: –Agriculture Policy with great transfer of financial responsibility from national budgets to EU budget (used for price gurantees and payment of direct income suppport) –One of the oldest EU-policy, lots of MS reluctant to downsize CAP CAP-reforms led to a reduction from 70% (1980s) to 45 % (mid-1990s) imbalance between CAP and other (more important) policy areas still existent

7. Asst. Prof. Dr. Alexander Bürgin IUE7 Stimulating growth has become an important part of the budget Sustainable growth has become one top-priorityy of the Union. The EU economy needs to be more competitive and less prosperous regions need to catch up with the others. Over the period 2007–13, out of every euro spent from the EU’s annual budget, eight cents will go to make the EU more competitive.

8. Asst. Prof. Dr. Alexander Bürgin IUE8 Faster funding for Europe's regions Funding for cohesion in 2009: €48.5 billion for Europe's regions (a 2.5% rise on 2008). Out of every euro spent, 36 cents will go to such cohesion activities.

9. Asst. Prof. Dr. Alexander Bürgin IUE9 http://ec.europa.eu/budget/reform/budget_glance/how_managed_en.htm

10. Asst. Prof. Dr. Alexander Bürgin IUE10 The Budget 2. Revenues

11. Asst. Prof. Dr. Alexander Bürgin IUE11 The revenues of the EU are mainly national contributions The revenues of the EU consists (2006) of: –Common Customs Tariff duties and other duties stemming from trade with non-members (11,5% of EU Budget) –Agriculturl levies for non-members designed to increase import prices to EU-levels (1,2%) –A percentage rate to the VAT (14%) –Contributions of the MS based on their GNI (72%) (larger states = largest gross contributors, Germany as largest net contributor)

12. Asst. Prof. Dr. Alexander Bürgin IUE12 Where does the money come from? http://ec.europa.eu/budget/budget_glance/where_from_en.htm

13. Asst. Prof. Dr. Alexander Bürgin IUE13 The Budget 3. Budgetary Decision Making

14. Asst. Prof. Dr. Alexander Bürgin IUE14 The Financial Perspective constrains the annual budget procedure The financial perspective was introduced 1988 after an interinstitutional agreement on Budgetary Discipline between EP, Council an Commission Purpose of financial perspective –As a several year programm it allows the EU to use funds in a more ordered way –By specifiying ceilings on all categories of EU expenditure it imposes discipline –By restricting the annual budget procedure it helps to avoid conflict

15. Asst. Prof. Dr. Alexander Bürgin IUE15 The process leading to the financial perspective is highly political Reasons: –Decisions are taken at the highest political level at the European Council acting by unanimity –Differences reflecting the national economic neeeds and preferences –Differences are sharpened by the fact that outcomes are expressed in numerical figures –Net contributors try to reduce their share

16. Asst. Prof. Dr. Alexander Bürgin IUE16 http://news.bbc.co.uk/2/hi/europe/4492714.stm

17. Asst. Prof. Dr. Alexander Bürgin IUE17 The influence of EP and Commission on the financial perspective is limited The EP is not a direct participant in the main decision-making process but its approval of the financial perspective is required The Commission structures the negotiation with ist initial proposals

18. Asst. Prof. Dr. Alexander Bürgin IUE18 In the annual budget procedure Council and EP jointly constitute the budget authority The preliminary draft budget of the Commission has ist first reading in the Council The EP can propose amendments to the Council draft Before Lisbon Treaty: The Council has the last word on compulsory expenditures (can reject EP amendments) - EP has the last word on non- compulsory expenditure (in the framework set by the financial perspective)

19. Asst. Prof. Dr. Alexander Bürgin IUE19 The Lisbon Treaty increased the budgetary power of the EP Current distinction between compulsory and non- compulsory expenditure disappears Parliament and Council decide together on whole EU budget (previously Council had last say on compulsory expenditure Financial perspectives will be legally binding A single reading followed by work in a conciliation committee replaces two readings in both Council and EP

20. Asst. Prof. Dr. Alexander Bürgin IUE20 Assessment of EPs budgetary competences Revenues: No influence on the revenue- side of the budget Revenues Financial Perspective: political agreement between MS – but EP has to approve the FP Annual budget: EP power constrained by expenditure ceilings and compulsory expenditures – but: EP can reject the budget