Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

that the Council obtains the consent of the Parliament for the approval of
the financial perspective.
The overall limit to the size of the budget is decided by unanimity in the
Council, without the participation of the other Community institutions.
The current limit is 1.24% of the Union’s GNI. However the present size of
the budget, in payment appropriations, is less than 1% of GNI (0.89% in
2009), leaving a considerable amount of head-room below the own
resources limit. In fact the annual budget has declined in size as a
proportion of GNI since 1993 when it was 1.21%, and actual spending has
been considerably lower than that foreseen by the annual budgets. In
nominal terms of course there has been a steady increase in the size of
annual budgets, reaching €134 billion in 2009 (commitment
appropriations). The EU budget is therefore at the same time small in
relation to public spending in the Union (approximately 2%) but quite
substantial in nominal terms.
The resources required to implement the agreed expenditure, so-called
“own resources”, consist mainly of transfers from the member states based
on the size of their gross national incomes. Traditional own resources,
that is to say customs duties and certain agricultural duties as well as the
VAT- based own resource, now account for only 33% of the required
resources, the remainder coming from the GNI-based resource. Thus only
a relatively small proportion of the resources needed to meet planned
expenditure come automatically to the Union and are therefore “own
resources” in the strict sense.
The current structure of the EU budget
Expenditure
It is a well-known fact that, however the budget figures are presented,
around 80% of the budgetary funds go to finance agricultural spending
and cohesion policy. In the 2009 budget, agriculture, fisheries and rural
development accounted for 42% of commitment appropriations. Cohesion
policy amounted to a further 36%.
It is certainly true that the Union has made an attempt to reduce spending
on the Common Agricultural Policy over several years. In the 2008 budget
for instance narrow agricultural expenditure was the only major budget
line to decrease over the previous year. Indeed, expenditure on agriculture
in the current financial framework is expected to increase in nominal
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