Convention to address future EU finances

The 105-member Convention on the future of the Europe will debate the Union’s finances on the second day of its plenary session on 4 April.

The Convention members have presented 69 amendments to the draft Articles 38 to 40. There is broad consensus on the idea of formally establishing the financial perspective in the Constitution as a binding framework for the annual budget.

As regards own resources, some amendments support maintaining the procedure currently laid down in the EC Treaty, whilst others advocate intervention by the Parliament by means of the legislative procedure or assent. Views also diverged on the proposals for majorities within both the Council and the Parliament, on the requirement for national ratification. A large number of amendments propose leaving open the possibility of creating European taxes in relation to own resources.

Draft Article 39, which contains the budgetary principles, seems to have been well-received. Many amendments propose the addition of the principle of necessary means which is currently the subject of Article 6(4) of the Treaty on European Union. Some amendments propose defining the principle of budgetary discipline not only in relation to own resources but also in relation to the financial perspective.

Some amendments advocate devoting a separate article to the financial perspective. A large number of Convention members believes that the financial perspective should set binding ceilings per category of expenditure. Opinions over the adoption procedure vary considerably: while some members propose adoption by the Council following consultation of the European Parliament, others want the legislative procedure orad hocprocedures for joint adoption by the European Parliament on the Council to apply.

 

Draft Articles 38 to 40 make upTitle VII - Union Financesof the draft Constitutional Treaty. They cover the following areas:

  • Article 38 - The Union's resources:The Union's budget shall be financed wholly from own resources (this article reproduces the existing Article 269 of the Treaty of the European Community);
  • Article 39 - The budgetary and financial principles:The Union's revenue and expenditure shall be in balance; principles of sound financial management shall be respected; the implementation of expenditure shall require the prior adoption of a binding legal act; fraud and any other illegal activities affecting the Union's financial interests will be countered.
  • Article 40 - The Union's budgetary procedure:The draft Article states that the European Parliament and the Council shall, on a proposal from the Commission, jointly adopt the Union's annual budget. This budget shall be established in compliance with the multiannual financial perspective. The wording of this article removes the distinction between compulsory and non-compulsory expenditure, which would introduce complete co-decision of the European Parliament.

 

The next meeting of the Convention is on 24 and 25 April.

 

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