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[Luxembourg 2005 Presidency of the Council of the European Union]
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Financial perspectives

Financial perspectives form the framework for Community expenditure over a period of several years. They are the product of an interinstitutional agreement between the European Parliament, the Council and the Commission and indicate the maximum volume and breakdown of the foreseeable Community expenditure. They are adjusted annually by the Commission to take account of prices and the trend in Community GDP.

However, it should be borne in mind that the financial perspectives are not a multiannual budget, since the annual budgetary procedure remains essential to determine the actual amount of expenditure and the breakdown across the various budget headings.

To date, three interinstitutional agreements of this kind have been concluded, in 1988, 1992 and 1999, respectively:

  • the 1988-1992 financial perspectives (Delors I package);
  • the 1993-1999 financial perspectives (Delors II package);
  • the 2000-2006 financial perspectives.

The 2000-2006 financial perspectives form part of a new interinstitutional agreement, which is the main feature of the Agenda 2000 financial package. This agreement, which received political endorsement at the Berlin Summit in March 1999, should enable the Union to enlarge and strengthen its policies, while remaining within a rigorous financial framework.

The financial perspectives establish the reference framework for a seven-year period (2000-2006). Although they cannot incorporate expenditure linked with new accessions before they take place, they nevertheless have three features that are interesting in terms of enlargement:

  • Agricultural funding is being extended to encompass a new rural development policy, veterinary measures, a pre-accession agricultural instrument and a margin made available for enlargement;
  • the allocation for the structural funds intended for the 15 Member States has been gradually reduced from 2002 by focusing priorities on a more limited number of regions. Moreover, structural operations will include a new pre-accession instrument;
  • the amount allocated for external action will increase by 2% per year in order to cover the increase in pre-accession aid under the PHARE programme. In addition, the allocation provided for pre-accession aid (PHARE, ISPA and SAPARD) will remain unchanged irrespective of the number of applicant countries which will become members of the European Union during the period 2000-2006. In this way, resources can be concentrated on the countries which have the greatest need.

An overall effort to achieve budgetary discipline will enable the current ceiling on expenditure of 1.27% of Community GDP to be maintained.

A new interinstitutional agreement on the financial perspectives for the period 2007-2013 is being negotiated.

This page was last modified on : 29-12-2004

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