FAQ

FREQUENTLY ASKED QUESTIONS ON THE
2007-2013 BUDGETARY PERIOD

1. What is a financial perspective?

2. What is the difference between the European budget and a financial perspective?

3. How is the financial perspective and the budget accepted?

4. What are the main objectives of the 2007-2013 period?

5. How does the implementation of the EU budget impact the citizens?

6. Who is responsible for the Community Programmes?

7. Who controls the execution of budgetary measures?

8. How do the European Union and Member States share the responsibility of supporting policies?

9. How is the European budget shared between Member States?

10. What is the total EU budget expenditure?

11. Where does the money for the EU budget come from?

1. What is a financial perspective?
A financial perspective is an instrument for budgetary planning and discipline in the multi-annual spending plan that limits EU expenditure and is agreed upon by the Parliament, Council and Commission. The financial framework sets annual maximum amounts (ceilings) of commitments for the main categories of expenditure (headings) and an overall payments ceiling. It should not be confused with the financial framework included in legislative co-decisions, fixing an amount for the programme concerned during the life of that programme.

2. What is the difference between the European budget and a financial perspective?
The annual budget sets the yearly expenditure of the EU, while the financial perspective limits it.

3. How is the financial perspective and the budget accepted?
The Commission, European Parliament and the Council all have a role in deciding the budget. The European Commission prepares the preliminary draft budget based on the multi-annual financial perspective in force and the budget guidelines for the coming year and submits it to the Council in April or early May. The budgetary authority, comprised of the Council and the Parliament, either amends and adopts the budget or rejects the draft, putting a system of provisional twelfths into place until an agreement is reached. The European Parliament then signs the agreed budget into law.

4. What are the main objectives of the 2007-2013 period?
Integrating the single market and mobilising economic, social, and environmental policies towards the idea of sustainable growth.

5. How does the implementation of the EU budget impact the citizens?
With 45 to 50 percent of the Union's national income going to national, regional or local governments in the Member States, half of the money collected by the EU goes directly back to the citizens. In addition, almost 95% of the Union budget goes directly to the beneficiaries of EU policies, i.e. to farmers, regions, third countries, NGOs, small businesses, research centres, students, and so on. .

6. Who is responsible for the Community Programmes?
The Commission is responsible for ensuring Member States implement the Community Programmes, providing a set of Implementing Rules explaining how the Financial Regulation is to be applied.

The staff of each Directorate General manages the European Union Programmes and activities in their particular policy area, working with their counterparts in the Member States to ensure the Programme is carried out.

7. Who controls the execution of budgetary measures?
The European Commission is responsible for the ensuring full implementation of the budget by the Member States in accordance with the principles of sound financial management. A majority of the Community budget (some 80%) is implemented under "shared management" principle, where the authorities in the Member States, rather than the Commission departments, manage the expenditure.

8. How do the European Union and Member States share the responsibility of supporting policies?
European policies can be divided according to the amount of power given to the Community and Member States in deciding and executing the polices:

• Community policies : In these strongly integrated policies areas, the Member States' competences are limited with a majority of the power going to the Union. The policy areas covered include Common Agricultural Policy (CAP), Common Trade Policy, Transport Policy and European Monetary Union.

• Less integrated policies: In the areas of economic and social cohesion and the regional policies, the European Union only has a contributory competence with financial charges being shared between the national and EU levels.

• Exclusive national competences : In policies such as education, culture, research, health and employment, the Member States have complete control over the policies and the EU can only make recommendations.

9. How is the European budget shared between Member States?
While a large amount of the budget comes directly from Member States, the budget is not divided according to the amount each state gives. Rather the EU budget is treated as a whole and it is entirely redistributed based on need.

10. What is the total EU budget expenditure?
Since the amount of money made available to the Union is limited by agreement of the Member States and the Parliament, the ceiling is currently set at 1.24% of the Union's gross national income for payments made from the EU budget. However, approximately 45% of the Union's gross national income goes to national, regional and local public expenditure in the Member States.

11. Where does the money for the EU budget come from?
The EU budget has three main sources of income:

• Customs duties

• A portion of the harmonised value added tax (VAT) base of each Member State

• Contributions from Member States based on the size of their gross national income (GNI)