Budgetary Power

It is thanks to the budget that the European Parliament has progressively achieved a certain number of significant competences.

Hence in 1970 the Luxembourg Treaty granted the European Parliament with the power to amend the budget. It also established the "own resources" system: the European Communities were to receive a certain share of customs duties, VAT and agricultural taxes from the Member States.
In 1975, the Brussels Treaty provided the European Parliament with the right to make the final decision to adopt the European budget; it also enhanced its power to make amendments by making a distinction between "compulsory" and "non-compulsory expenditure".
This distinction has been removed from the Lisbon Treaty which enhances the budgetary power of the European Parliament.

  • Adoption of the budget

    The European Parliament shares the budgetary power with the Council of Ministers these two institutions comprise the European Union's "budgetary authority". They decide what the European Union will spend for the year. These have to be established within the limits established by the "multiannual financial perspective", or the "pluriannual financial framework"; this is established for 7 years via an inter-institutional agreement. Parliament is not however able to intervene with regard to the total amount contained within this financial framework.

    In 2009, the European budget that was adopted totalled 133.8 billion €, i.e. 1.03% GNR, which equals a rise of 0.3% in comparison with 2008.

    Here is how expenditure is distributed according to the main budgetary lines:

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    Source: European Union Budget for the financial year 2009

    Present financial perspectives, signed in May 2006 apply to the period 2007-2013.

    The European Parliament and the Council of Ministers have to adopt a preliminary draft budget established by the European Commission. The special legislative procedure in force now finds its source in the ordinary legislative procedure and provides almost equal power to the Parliament but it does oblige it however to adhere to great internal consensus. The procedure is restricted to one reading per institution and the timetable is tight. A conciliation committee is convened if an agreement is not reached.

    The president of European Parliament finalises the procedure by confirming that the budget has finally been adopted.

    For more information on the community budget 2009, click here


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    Source: European Commission.
    Data assembled and put together by the Robert Schuman Foundation, © FRS


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    Source: European Commission
    Data assembled and put together by the Robert Schuman Foundation, © FRS

  • Budgetary Control

    By way of its Committee on Budgetary control ("Cocobu"), the European Parliament controls how the European Commission uses community funds.

    At the end of each budgetary year (1st January to 31st December each year), the European Commission presents a report on how it has used community funds to the European Parliament. The European Parliament then decides on the recommendation of the Council of Ministers to grant, to adjourn or to refuse the Commission the "budgetary discharge" for its execution of the community budget. This procedure enables the completion of the budgetary year.

    It is the threat of not granting the discharge in 1999 because of a lack of transparency in the Commission's management that initiated the process whereby Jacques Santer's Commission resigned collectively.