EU MULTIANNUAL BUDGET – FINANCIAL FRAMEWORK FOR 2007– 2013
Since 1988, annual budget of European Union (EU) is planned according to the Financial Framework. The Financial Framework is the EU multiannual budget planning mechanism that indicates the maximum amount and the composition of foreseeable Community expenditure, the structure and ceiling for own resources, and the amount of annual EU budget.
The draft Financial Framework is proposed by the European Commission (EC). It is then debated and adopted unanimously by the Member States at the Council of the European Union. Furthermore it is examined and approved by the European Parliament (EP).
The EC is responsible for the implementation of the Financial Framework and is supervised by the Court of Auditors and the EP. Specific EU policies are also implemented by the Member States. For instance the agricultural and regional development (cohesion and structural funds) policies are implemented by institutions authorised by the Member States.
The EU budget is not allowed to be in deficit. EU income is basically comprised of customs duties and agricultural levies (or the so-called traditional own resources), VAT payments and mandatory Member State payments based on the size of their gross national income (GNI).
Currently the EU Financial Framework for 2007-2013 is in force. For more detailed information on the EU budget and Financial Framework for 2007-2013, click here.
Financial Framework for 2007-2013
At the European Council of 15-16 December 2005, the Member States agreed on the Financial Framework for 2007-2013. The total amount of the 2007-2013 EU multiannual budget was set at 1,045 % of the national gross income of the EU Member States, or EUR 862.3 billion.
For the decision on the distribution of the financial assets for 2007-2013 to take force, the Council, the EC and the EP had to sign an Interinstitutional Agreement. The Agreement serves to implement budgetary discipline, improve the annual budget procedure and co-operation of EU institutions on budget issues, and to ensure sound financial management. The Interinstitutional Agreement was signed on 14 June 2006 and entered into force on 1 January 2007.
The total amount of financing allocated to Latvia for the period 2007-2013 equals EUR 6.60 billion, of which EUR 4.62 billion are intended for the cohesion and structural funds and EUR 1.988 billion – for agriculture rural development.
In addition to the above mentioned financing allocated to Latvia, there are also opportunities to apply for financial support in the framework of joint EU programmes, the result being dependent on the quality of individual projects. Examples of such programmes are the 7th framework programme for research and technology development, Youth in Action, Culture 2007, Media 2007, etc.
EU budget review
By concluding the agreement on the EU budget for 2007-2013, the EU Member States also agreed to modernise the EU budget so as to increase its capacity to meet the challenges of the 21st century. According to the European Council conclusions of December 2005, the EU Member States call on the EC to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, to report in 2008/9. On the basis of EC proposals, the EU Member States will commence a discussion on the general EU budget reform.
On 12 September 2007 the EC launched a public consultation process on local, regional, national and EU level by publishing a consultation paper Reforming the budget, changing Europe thus preparing for the debate on the EU budget review scheduled in 2008/2009. The consultation paper reveals the problematic aspects of the EU budget and proposes issues to be focused on during the review of the EU budget. The public discussion was open until 15 June 2008, during which the EC received 279 contributions provided by European citizens, NGOs, local governments and governments of 25 EU Member States.
On 26 March 2007 the Prime Minister established an Interministerial working group responsible for elaboration of Latvian national position on the EU budget review. The working group is coordinated by the Ministry of Foreign Affairs. The principal objective of national position is to ensure that the Cabinet members and representatives of ministries according to their respective area of responsibility express the common position on the EU budget review when representing the Republic of Latvia in the EU institutions.
On 18 March 2008, the Cabinet approved Latvian national position No 1 on the EU budget review that also includes Latvia's initial opinion on the EC public consultation paper. The national position reflects Latvia's view on priorities during the EU budget review process and the sectors in which the EU financing would have the highest added value at the local, regional, national and EU levels. Based on Latvia's national position No 1, Latvia has submitted its contribution in the public consultation of EU budget review, which is also published on the website of EC Directorate General for Budget. See Latvia's opinion here.
Additional information
EU website on the EU budget review Reforming the budget, changing Europe
