1

by

Michael CHAMIER

Director of Finance

European Parliament

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Maastricht, May 11, 2001

PRESENTATION

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E U BUDGET

FACTS AND FIGURES 2001

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EUROPEAN UNION

Multi- annual Financial Planning

1. February 1988 in Brussels• First plan agreed by Member States 1988-1991

2. December 1992 in Edinburgh• Second Plan 1994 - 1999

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Multi- annual Financial Planning

3. March 1999 in Berlin

• Third plan 2000 - 2006

•Including enlargement 6 Member states

•Adjusted annually by C.P.I.

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EUROPEAN UNION

NO BORROWING !!!

NO DEBT !!!

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EUROPEAN UNIONOWN RESOURCES

• Principle of “Divine Right” to collect revenues from Member states

• No Direct taxation - Yet

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EUROPEAN UNIONOwn Resources

2000 - 2006

– Maximum 1,27% of GNP of 15 Member States

– Forecast for 2006 Expenditure is only 1,13% of GNP

– 0,14% Margin still available

– Calculated for 6 new Member States only

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EUROPEAN UNION Own Resources

VAT

• 1,0 % of the base VAT revenue of eachMember State

• Reducing to 0,5 % by 2004

• VAT resources reduced in favour of GNP resource

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EUROPEAN UNIONOwn Resources 2001

% € billion

VAT 36,2 33,47

GNP 46,7 43,25

CUSTOMS DUTIES 13,3 12,29

AGRICULT. LEVIES 2,1 1,96

OTHER MISCELLANEOUS 1,7 1,60

100 92,57

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%MEMBER STATES

GERMANY 25,27FRANCE 16,81UNITED KINGDOM 13,86ITALY 12,93SPAIN 7,52NETHERLANDS 6,29BELGIUM 3,82SWEDEN 3,05AUSTRIA 2,48DENMARK 1,99GREECE 1,62FINLAND 1,46PORTUGAL 1,43IRELAND 1,23LUXEMBOURG 0,24

100

GROSS CONTRIBUTIONSBudget 2001

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EUROPEAN UNIONUK rebate

• Thatcher 1984• Unlimited in time• Discrimination for 14 others who pay the difference• Enlargement

• UK will only pay 1/3 of costs• D + NL +Aut. + SV to pay 25% less of UK

difference from 2001

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CATEGORY : 2001 2006

AGRICULTURE 44.530 43 344

STRUCTURAL FUNDS 32.720 30 343

INTERNAL POLICIES 6.272 6 853

EXTERNAL POLICIES 4.735 4.787

ADMINISTRATION 4.776 5 296

RESERVES 916 416

PRE-ACCESSION AID 3.240 3.240

ENLARGEMENT 6 MS --- 14 792

Total 97.189 107 989

Financial Perspectives 2001 - 2006 (commitments - in € million)

15 Member states

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2001 Budget

How much ?

Commitments

€ 96,24 billions

or $ 90 billion

Payments

€ 92,57 billions

or $ 86 billion

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80 % IS SPENT IN MEMBER STATES

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1994 (%) 2001 (%)

AGRICULTURAL POLICY 55,6 45,0

STRUCTURAL FUNDS 26,8 34,0

RESEARCH 4,1 4,1

EXTERNAL POLICIES 5,2 5,1

ADMINISTRATION 6,0 5,1

RESERVE 2,3 3,3

PRE ACCESSION AID -- 3,4 100 100

Expenditure 1994 compared to 2001

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EUROPEAN UNIONNet beneficiaries 1999

Pro -rata

• Greece• Portugal• Ireland• Spain

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• Netherlands• Luxembourg• Germany• United Kingdom• Sweden

• Austria• Finland• Italy• France• Denmark• Belgium

Net Contributors 1999

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EUROPEAN UNIONFinancial perspectives 2000 - 2006

• Nice Treaty• 2004/5 - First M.S. should join • Berlin agreement 1999 includes cost of enlargement

for 6 new Member States only • Agriculture costs estimated at € 3,5 billion• Margin still available (0,14 % GNP)

Enlargement + 12 M.S.

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EUROPEAN UNIONFinancial Perspectives 2000 - 2006

Problems

But revision likely• End 2002, review Agriculture sector • WTO - Next Round• Enlargement

• agriculture + 5- 7 billion for 12 Member States• structural - Iberia• UK Rebates• Commission Review end 2002

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EUROPEAN UNIONFinancial Perspectives 2000 - 2006

Modifications

Possible solution • New Financial perspectives for 2005 -2010• But, maximum 1.27 % GNP is sufficient for

enlargement + 12 m.s.

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EUROPEAN UNIONApproximate Staff numbers 2000

Commission

Parliament

Council

Court of Justice

Court of Auditors

Committees

21 700

4 100

2 650

1 000

550

750

30 750

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ACTORS

A) AUTHORIZING OFFICERS

– For one or more Budget Items

– Issue commitment + payment orders

– Personally responsible

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B) FINCANCIAL CONTROLLER

- Totally independent

- Reports direct to President

- Issues Visa to all commitments and payments

- Refusal of Visa

- Overruling by President only

- Personally responsible

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C) ACCOUNTING OFFICER

- Totally independent

- Reports direct to President

- Accounting Records

- Banking and Treasury

- Refuse payment

- Overruling by President only

- Official Annual Accounts

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D) INTERNAL AUDITOR - NEW

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DISCHARGE

POLITICAL PROCEDURE

COURT OF AUDITORS REPORT

YEAR N - 2

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EUROPEAN PARLIAMENTNUMBER OF MEMBERS

• GERMANY 99• UNITED KINGDOM 72• FRANCE 72• ITALY 72• SPAIN 50• POLAND 50• ROUMANIA 33• NETHERLANDS 25• GREECE 22• CZECH REPUBLIC 20• BELGIUM 22• HUNGARY 20• PORTUGAL 22• SWEDEN 18• BULGARIA 17• AUSTRIA 17• SLOVAKIA 13• DENMARK 13• FINLAND 13• IRELAND 12• LITHUANIA 12• LATVIA 8• SLOVENIA 7• ESTONIA 6• CYPRUS 6• LUXEMBOURG 6• MALTA 5• T O T A L 732