The European Budgetary Procedure

Three institutions, the Commission, the Council and the Parliament, are involved in the budgetary procedure and to understand European financial procedures it is first necessary to differentiate between the European Budget and the Financial Perspective.

The European Budget is decided annually by the European Parliament and the Council, and is controlled by the European Commission.

The Financial Perspective is a spending plan for several years that limits EU expenditure and reflects the Union's policy priorities. For the next period, the financial perspective covers 7 years.

The Financial Perspective is not a multi-annual budget, because it only fixes the limits of expenditure and does not fix an amount to the expected activities of the budget. However, one of its main features is that it allows for multi annual planning and contributes to a financial discipline.

As the Financial perspective is not foreseen in the Treaty, it has to be adopted within the frame of the Inter institutional agreement. The Commission, the Council and the European Parliament reached an agreement the 17 of May 2006, for the next budgetary period.

The annual budget procedure

All European institutions make their own estimates for the preliminary draft budget according to their own internal procedures.

The European Commission presents a preliminary draft budget in April or early May, before the Budget Council's meeting in July.

After a conciliation meeting with the European Parliament, the Council adopts a draft budget (1st reading) then forwards it to the Parliament in September.

After the Parliament's 1st reading, amendments can be made to the draft budget.

If there are any discrepancies in the budget, the Parliament can refer it back to the Council for a 2nd reading. The Parliament may modify the Council text before it votes on the final budget in December. The Parliament reserves the right to reject the budget entirely. Once all modifications have been made, the President of the Parliament signs it into law.

Here you can find the annual budget of the EU