The EU budget : peanuts!

The great debate about the EU budget is underway. But what’s it all about? In this article published by café babel, Alice Desthuilliers provides a guide to the EU’s revenue and expenditure.

Abstract:

The EU budget has risen from €7 million in 1958 to €116.55 billion in 2005. That is still peanuts considering that it has to finance the common policies of no fewer than twenty-five member states. It pales into insignificance in comparison to the French national budget, for example, which was €300 billion in 2004. With such tiny sums at stake, the current negotiations about the EU budget are just a storm in a teacup.

A brief history of the budget

The cornerstone of the EU’s budgetary policy was laid at the end of the 1980s, which saw the codification of various budgetary mechanisms, the allocation of financial resources to the EU, and the definition of the main items of the budget. According to the 1957 Treaty of Rome, the Commission proposes the budget, which is subject to a vote within the Council after consultation with the European Parliament (EP). Initially devoid of any actual influence over the budgetary process, the EP has gradually acquired greater powers. For instance, it has significant control over the amount of ‘non-compulsory expenditure’, in other words, expenditure which is not listed in the treaties but which constitutes a crucial component of the Union’s budget (Social Fund, Regional Fund, Energy and Industrial Policy, the day-to-day functioning of the institutions). In addition, the EP can refuse to approve the budget. In 1980 and 1985, for example, MEPs refused to sign the budget and relieve the Commission of its obligations. 

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