1999Y0618 — EN — 19.05.2003 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B INTERINSTITUTIONALAGREEMENT
of6May1999
between the European Parliament, the Council and the Commission on budgetary discipline and
improvementofthebudgetaryprocedure
(1999/C172/01)
(OJ C 172, 18.6.1999, p. 1)
Amended by:
Official Journal
No page date
►M1Decision 2003/429/EC of the European Parliament and of the Council of
19 May 2003L 147 25 14.6.2003
▼B
INTERINSTITUTIONALAGREEMENT
of6May1999
between the European Parliament, the Council and the Commis-
sion on budgetary discipline and improvement of the budgetary
procedure
(1999/C172/01)
1. The purpose of this Agreement concluded between the European
Parliament, the Council and the Commission, hereafter referred to
as the ‘institutions’, is to implement budgetary discipline and toimprove the functioning of the annual budgetary procedure andcooperation between the institutions on budgetary matters.
2. Budgetary discipline under this Agreement covers all expenditure.
It is binding on all the institutions involved in its implementation
for as long as the Agreement is in force.
3. This Agreement does not alter the respective budgetary powers of
the various institutions, as laid down in the Treaties.
4. Any amendment of this Agreement requires the consent of all the
institutions which are party to it. Changes to the financial perspec-
tive must be made inaccordan ce with the procedures laid downfor
this purpose inthis Agreemen t.
5. This Agreement is in two parts:
— Part I contains a definition and implementing provisions for the
financial perspective 2000 to 2006 and applies for the durationof that financial perspective,
— Part II relates to improvement of interinstitutional collaboration
during the budgetary procedure.
6. Whenever it considers it necessary and at all events at the same
time as any proposal for a new financial perspective presented
pursuant to paragraph 26, the Commission will present a report on
the application of this Agreement, accompanied where necessaryby proposed amendments.
7. This Agreement enters into force on 1 January 2000. It replaces
with effect from the same date:
— the Joint Declaration by the European Parliament, the Council
and the Commission of 30 June 1982 on various measures toimprove the budgetary procedure (
1),
— the Interinstitutional Agreement of 29 October 1993 between
the European Parliament, the Council and the Commission on
budgetary discipline and improvement of the budgetary proce-
dure(2),
— the Declaration by the European Parliament, the Council and
the Commission of 6 March 1995 on the incorporation of finan-cial provisions into legislative acts (
3),
— the Joint Declaration of 12 December 1996 concerning the
improvement of information to the budgetary authority on fish-eries agreements (
4),
— the Interinstitutional Agreement between the European Parlia-
ment, the Council and the European Commission of 16 July
1997 on provisions regarding financing of the common foreignand security policy (
5),1999Y0618 — EN — 19.05.2003 — 001.001 — 2
(1) OJ C 194, 28.7.1982, p. 1.
(2) OJ C 331, 7.12.1993, p. 1.
(3) OJ C 102, 4.4.1996, p. 4.
(4) OJ C 20, 20.1.1997, p. 109.
(5) OJ C 286, 22.9.1997, p. 80.
▼B
— the Interinstitutional Agreement of 13 October 1998 between
the European Parliament, the Council and the Commission onlegal bases and implementation of the budget (
1).
PART I — FINANCIAL PERSPECTIVE 2000 to 2006: DEFINITION
AND IMPLEMENTING PROVISIONS
A.Contentsandscopeofthefinancialperspective
8. The 2000 to 2006 financial perspective, set out in Annex I, forms
an integral part of this Agreement. It constitutes the reference
framework for interinstitutional budgetary discipline. Its contents
are consistent with the conclusions of the Berlin European Councilof 24 and 25 March 1999.
9. The financial perspective is intended to ensure that, in the medium
term, European Union expenditure, broken down by broad cate-gory, develops in an orderly manner and within the limits of ownresources.
10. The 2000 to 2006 financial perspective establishes, for each of the
years and for each heading or subheading, amounts of expenditure
in terms of appropriations for commitments. Overall annual totalsof expenditure are also shown in terms of both appropriations forcommitments and appropriations for payments. The appropriationsfor payments left available for enlargement and to be used in
accordance with the second subparagraph of paragraph 25 are also
identified.
All these amounts are expressed in 1999 prices, except for the
monetary reserve, where the amounts are expressed in currentprices.
The financial perspective does not take account of budget items
financed by earmarked revenue within the meaning of Article 4 ofthe Financial Regulation of 21 December 1977 applicable to the
general budget of the European Communities (
2), hereafter referred
to as the ‘Financial Regulation’.
Specific items of expenditure may be financed only up to the
ceiling fixed for this purpose and without prejudice to the secondsubparagraph of paragraph 11.
Information relating to operations not included in the general
budget of the European Communities and the foreseeable develop-ment of the various categories of Community own resources are set
out, by way of indication, in separate tables. This information is
updated annually when the technical adjustment is made to thefinancial perspective.
The agricultural guideline remains unchanged. It will be re-exam-
ined on the basis of a report which the Commission will present tothe Council before the next enlargement of the European Union inorder to make any adjustment considered necessary.
11. The institutions acknowledge that each of the absolute amounts
shown in the 2000 to 2006 financial perspective represents an
annual ceiling on expenditure under the general budget of theEuropean Communities. Without prejudice to any changes in theseceilings in accordance with the provisions contained in this Agree-ment, they undertake to use their respective powers in such a wayas to comply with the various annual expenditure ceilings during
each budgetary procedure and when implementing the budget for
the year concerned.
However, the ceilings under heading 7 of the financial perspective
(pre-accession aid) are indicative by nature and the two arms of the1999Y0618 — EN — 19.05.2003 — 001.001 — 3
(1) OJ C 344, 12.11.1998, p. 1.
(2) OJ L 356, 31.12.1977, p. 1.
▼B
budgetary authority may jointly decide to alter the breakdown in
the course of the budgetary procedure.
12. The two arms of the budgetary authority agree to accept, for the
duration of the 2000 to 2006 financial perspective, the maximumrates of increase for non-compulsory expenditure deriving fromthe budgets established within the ceilings set by the financialperspective.
Except in heading 2 of the financial perspective (structural opera-
tions), for the purposes of sound financial management, theinstitutions will ensure as far as possible during the budgetaryprocedure and at the time of the budget's adoption that sufficientmargins are left available beneath the ceilings for the various head-
ings.
Within the maximum rates of increase for non-compulsory expen-
diture specified inthe first subparagraph, the EuropeanParliamen tand the Council undertake to respect the allocations of commit-
ment appropriations provided in the financial perspective for
structural operations.
13. No act adopted under the co-decision procedure by the European
Parliament and the Council nor any act adopted by the Councilwhich involves exceeding the appropriations available in the
budget or the allocations available in the financial perspective in
accordance with paragraph 11 may be implemented in financialterms until the budget has been amended and, if necessary, thefinancial perspective has been appropriately revised in accordancewith the relevant procedure for each of these cases.
14. For each of the years covered by the financial perspective, the total
appropriations for payments required, after annual adjustment andtaking account of any other adjustments or revisions, must not besuch as to produce a call-inrate for ownresources that exceeds theceiling in force for these resources.
If need be, the two arms of the budgetary authority will decide,
acting on a proposal from the Commission and in accordance withthe voting rules laid down in the fifth subparagraph ofArticle 272(9) of the Treaty establishing the European Community
(hereafter referred to as the ‘EC Treaty’), to lower the ceilings set
in the financial perspective in order to ensure compliance with theceiling on own resources.
B.Annualadjustmentsofthefinancialperspective
Technical adjustments
15. Each year the Commission, acting ahead of the budgetary proce-
dure for year n + 1, will determine the agricultural guideline andmake the following technical adjustments to the financial perspec-tive in line with movements in gross national product (GNP) and
prices:
(a) revaluation, at year n + 1 prices, of the ceilings and of the
overall figures for appropriations for commitments and appro-priations for payments, with the exception of the monetary
reserve;
(b) calculationof the marginavailable un der the ownresources
ceiling.
The Commission will make these technical adjustments on the
basis of the most recent economic data and forecasts available.However, the technical adjustment of the ceiling for heading 1 ofthe financial perspective (agriculture) will be based on a deflator of
2 % a year. The technical adjustment of the ceiling for the ‘Struc-
tural Funds’ subheading will be based on the overall deflatorstipulated in the Structural Funds regulations for determining theprogramming of the corresponding operations. The index baseagainst which the allocations for 2004 to 2006 are pegged will bereviewed by way of technical adjustment, if necessary, by the1999Y0618 — EN — 19.05.2003 — 001.001 — 4
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Commissionbefore 31 December 2003 onthe basis of the most
recent information available. There will be no ex-postadjustment
of the allocations for earlier years.
The results of such adjustments and the underlying economic fore-
casts will be communicated to the two arms of the budgetary
authority.
No further technical adjustments will be made in respect of the
year concerned, either during the year or as ex-postcorrections
during subsequent years.
Adjustments connected with implementation
16. When notifying the two arms of the budgetary authority of the
technical adjustments to the financial perspective, the Commissionwill present any proposals for adjustments to the total appropria-
tions for payments which it considers necessary, in the light of
implementation, to ensure an orderly progression in relation to theappropriations for commitments.
17. For the adjustment exercise in 2001 and in the event of delays in
the adoptionof the programmes for structural operation s, the twoarms of the budgetary authority undertake to authorise, on aproposal from the Commission, the transfer to subsequent years,in excess of the corresponding ceilings on expenditure, of the allo-cations not used in 2000.
18. The European Parliament and the Council will take decisions on
these proposals before 1 May of year n, in accordance with the
voting rules laid down in the fifth subparagraph of Article 272(9)
of the EC Treaty.
C.Revisionofthefinancialperspective
19. In addition to the regular technical adjustments and adjustments in
line with the conditions of implementation, the financial perspec-tive may be revised in compliance with the own resources ceiling,on a proposal from the Commission, in the event of unforeseen
circumstances.
20. As a general rule, any such proposal for revision must be presented
and adopted before the start of the budgetary procedure for the
year or the first of the years concerned.
Any decision to revise the financial perspective by up to 0,03 % of
the Community GNP within the margin for unforeseen expenditure
will be takenjoin tly by the two arms of the budgetary authorityacting in accordance with the voting rules laid down in the fifthsubparagraph of Article 272(9) of the EC Treaty.
Any revision of the financial perspective above 0,03 % of the
Community GNP within the margin for unforeseen expenditurewill be takenjoin tly by the two arms of the budgetary authority,with the Council acting unanimously.
21. Except for expenditure under heading 2, the institutions will
examine the scope for reallocating expenditure between theprogrammes covered by the heading concerned by the revision,
with particular reference to any expected under-utilisation of
appropriations. The objective should be that a significant amount,in absolute terms and as a percentage of the new expenditureplanned, should be within the existing ceiling for the heading.
The institutions will also examine the scope for offsetting raising
the ceiling for one heading by lowering the ceiling for another.
Amounts available under headings 1 to 6 of the financial perspec-
tive cannot at any time be used for heading 7 of the financialperspective (pre-accession assistance) and, conversely, expenditurereserved for pre-accession assistance cannot be used for headings 1to 6.1999Y0618 — EN — 19.05.2003 — 001.001 — 5
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Amounts available for accession can be used only in order to cover
expenditure arising as a direct consequence of enlargement, andcannot cover unforeseen expenditure arising under headings 1 to 7
of the financial perspective. Conversely, expenditure earmarked for
headings 1 to 7 cannot be used to supplement the cost of newaccessions.
Any revision of the compulsory expenditure in the financial
perspective may not lead to a reduction in the amount availablefor non-compulsory expenditure.
Any revision must maintain an appropriate relationship between
commitments and payments.
D.Consequences of the absence of a joint decision on the adjust-
mentorrevisionofthefinancialperspective
22. In the absence of a joint decision by the European Parliament and
the Council on any adjustment or revision of the financial perspec-tive proposed by the Commission, the amounts set previously will,
after the annual technical adjustment, continue to apply as the
expenditure ceilings for the year in question.
E.Reserves
23. The three reserves appearing in heading 6 of the financial perspec-
tive are entered in the general budget of the European
Communities. The necessary resources will be called in onlywhenthese reserves are implemen ted:
(a) the monetary reserve is intended to cover, during the years
2000 to 2002, the impact onagricultural budget expen ditureof significant and unforeseen movements in the euro/UnitedStates dollar parity inrelationto the parity used inthe budget;
(b) the reserve for guaranteeing loans to non-member countries is
intended to endow the budget headings which will be drawn onto constitute the Guarantee Fund(
1) and for any additional
payments to be made should a debtor default;
(c) the purpose of the emergency aid reserve is to provide a rapid
response to the specific aid requirements of non-member coun-tries following events which could not be foreseen when thebudget was established, first and foremost for humanitarianoperations.
When the Commission considers that one of these reserves needs
to be called on, it will present a proposal for a correspondingtransfer to the two arms of the budgetary authority.
Any Commission proposal to draw on the reserve for emergency
aid must, however, be preceded by anexamin ationof the scope
for reallocating appropriations.
At the same time as it presents its proposal for a transfer, the
Commission will initiate a trialogue procedure, if necessary in asimplified form, to secure the agreement of the two arms of thebudgetary authority on the need to use the reserve and on theamount required.
If the Commission's proposal fails to secure the agreement of the
two arms of the budgetary authority, and if the European Parlia-
ment and the Council are unable to agree on a common position,
they will refrain from taking a decision on the Commission'sproposal for a transfer.1999Y0618 — EN — 19.05.2003 — 001.001 — 6
(1) Set up by Council Regulation (EC, Euratom) No 2728/94 (OJ L 293,
12.11.1994, p. 1).
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F.Flexibility instrument
24. The flexibility instrument with an annual ceiling of EUR
200 million is intended to allow financing, for a given financialyear and up to the amount indicated, of clearly identified expendi-ture which could not be financed within the limits of the ceilingsavailable for one or more other headings.
The portion of the annual amount which is not used may be carried
over up to year n + 2. If the instrument is mobilised, any carry-overs will be drawnonfirst, inorder of age. The portionof theannual amount from year n which is not used in year n + 2 will
lapse.
The flexibility instrument should not, as a rule, be used to cover
the same needs two years running.
The Commission will make a proposal for the flexibility instrument
to be used after it has examined all possibilities for re-allocatingappropriations under the heading requiring additional expenditure.
The proposal will concern the principle of making use of the
instrument and will identify the needs to be covered and theamount required. It may be presented, for any given financialyear, during the budgetary procedure. The Commission proposalwill be included in the preliminary draft budget or accompanied,in accordance with the Financial Regulation, by the appropriate
budgetary instrument.
The decision to deploy the flexibility instrument will be taken
jointly by the two arms of the budgetary authority in accordancewith the voting rules under the fifth subparagraph of Article 272(9)
of the EC Treaty. Agreement will be reached by means of the
conciliation procedure provided for in Part II, Section A andAnnex III to this Agreement.
G.Adjustmentofthefinancialperspectivetocaterforenlargement
25. Where the Union is enlarged to include new Member States during
the period covered by the financial perspective, the EuropeanParliament and the Council, acting on a proposal from theCommission and in accordance with the voting rules under the fifth
subparagraph of Article 272(9) of the EC Treaty, will jointly adjust
the financial perspective to take account of the expenditure require-ments resulting from this enlargement.
Without prejudice to the outcome of the accession negotiations, the
change in the headings concerned should not exceed the amounts
shown in the indicative financial framework based on the assump-tion of an enlarged Union with six new Member States from 2002and contained in Annex II, which forms an integral part of thisAgreement.
The additional requirements will be covered by the available
amounts set aside for this purpose in the financial perspectiveand, if necessary, by using the additional own resources resultingfrom the increased Community GNP after enlargement of the
Union.
H.Duration of the financial perspective and consequences of the
absenceofafinancialperspective
26. Before 1 July 2005, the Commissionwill presen t proposals for a
new medium-term financial perspective.
Should the two arms of the budgetary authority fail to agree ona
new financial perspective, and unless the existing financial
perspective is expressly denounced by one of the parties to this
Agreement, the ceilings for the last year covered by the existingfinancial perspective will be adjusted in accordance withparagraph 15 by applying to these amounts the average rate ofincrease observed over the preceding period, excluding any adjust-ments made to take account of enlargement of the Union. This rate1999Y0618 — EN — 19.05.2003 — 001.001 — 7
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of increase may not, however, exceed the rate of growth of
Community GNP for the year concerned.
PART II — IMPROVEMENT OF INTERINSTITUTIONAL COLLA-
BORATION DURING THE BUDGETARY PROCEDURE
A.Theinterinstitutionalcollaborationprocedure
27. The institutions agree to set up a procedure for interinstitutional
collaborationinbudgetary matters. The details of this collaboration
are set out in Annex III, which forms an integral part of thisAgreement.
B.Establishmentofthebudget
28. The Commission will present each year a preliminary draft budget
showing the Community's actual financing requirements.
It will take into account:
— the capacity for utilising appropriations, endeavouring to main-
tain a strict relationship between appropriations forcommitments and appropriations for payments,
— the possibilities for starting up new policies through pilot
projects and/or new preparatory operations or continuing multi-
annual operations which are coming to an end, after assessingwhether it will be possible to secure a basic act, withinthemeaning of paragraph 36,
— the need to ensure that any change in expenditure in relation to
the previous year is in accordance with the constraints of
budgetary discipline.
29. The institutions will, as far as possible, avoid entering items in the
budget carrying insignificant amounts of expenditure on operations.
The two arms of the budgetary authority also undertake to bear in
mind the assessment of the possibilities for implementing thebudget made by the Commission in its preliminary drafts and inconnection with implementation of the current budget.
C.Classificationofexpenditure
30. The institutions consider compulsory expenditure to be such expen-
diture as the budgetary authority is obliged to enter in the budgetby virtue of a legal undertaking entered into under the Treaties oracts adopted by virtue of the said Treaties.
31. The preliminary draft budget is to contain a proposal for the classi-
fication of each new budget item and each item with an amendedlegal base.
If they do not accept the classification proposed in the preliminary
draft budget, the European Parliament and the Council will
examine classification of the budget item concerned on the basisof Annex IV, which forms an integral part of this Agreement.Agreement will be sought during the conciliation procedureprovided for in Annex III.
D.Maximum rate of increase of non-compulsory expenditure in
theabsenceofafinancialperspective
32. Without prejudice to the first subparagraph of paragraph 12, the
institutions agree on the following provisions:
(a) the European Parliament's autonomous margin for manoeuvre
for the purposes of the fourth subparagraph of Article 272(9)of the EC Treaty — which is to be half the maximum rate —applies as from the draft budget established by the Council atfirst reading, including any letters of amendment.
The maximum rate is to be observed in respect of the annual
budget, including any supplementary and/or amending budgets.Without prejudice to the setting of a new rate, any portion of1999Y0618 — EN — 19.05.2003 — 001.001 — 8
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the maximum rate which has not been utilised will remain
available for use and may be used when draft supplementaryand/or amending budgets are considered;
(b) without prejudice to point (a), if it appears in the course of the
budgetary procedure that completionof the procedure mightrequire agreement on setting a new rate of increase for non-
compulsory expenditure to apply to payment appropriations
and/or a new rate to apply to commitment appropriations (thelatter rate may be at a different level from the former), theinstitutions will endeavour to secure an agreement betweenthe two arms of the budgetary authority by the conciliationprocedure provided for in Annex III.
E.Incorporationoffinancialprovisionsinlegislative acts
33. Legislative acts concerning multiannual programmes adopted under
the co-decisionprocedure con taina provisioninwhich the legisla-tive authority lays down the financial framework for theprogramme for its entire duration.
That amount will constitute the prime reference for the budgetary
authority during the annual budgetary procedure.
The budgetary authority and the Commission, when drawing up its
preliminary draft budget, undertake not to depart from this amount
unless new, objective, long-term circumstances arise for whichexplicit and precise reasons are given, with account being takenof the results obtained from implementing the programme, in parti-cular onthe basis of assessmen ts.
34. Legislative instruments concerning multiannual programmes not
subject to the co-decision procedure will not contain an ‘amount
deemed necessary’.
Should the Council wish to include a financial reference, this will
be taken as illustrating the will of the legislative authority and willnot affect the powers of the budgetary authority as defined by theTreaty. This provision will be mentioned in all instruments which
include such a financial reference.
If the amount concerned has been the subject of an agreement
pursuant to the conciliation procedure provided for in the JointDeclaration of the European Parliament, Council and the Commis-sionof 4 March 1975 (
1), it will be considered a reference amount
within the meaning of paragraph 33 of this Agreement.
35. The financial statement provided for in Article 3 of the Financial
Regulation will reflect in financial terms the objectives of theproposed programme and include a schedule covering the durationof the programme. It will be revised, where necessary, when thepreliminary draft budget is drawn up, taking account of the extent
of implementation of the programme.
The revised statement will be forwarded to the budgetary authority
when the preliminary draft budget is presented and after the budgetis adopted.
F.Legalbases
36. Under the system of the Treaty, implementation of appropriations
entered in the budget for any Community action requires the prioradoptionof a basic act.
A ‘basic act’ is anact of secon dary legislationwhich provides a
legal basis for the Community action and for the implementationof the corresponding expenditure entered in the budget. Such anact must take the form of a Regulation, a Directive or a Decision(Entscheidung or Beschluß). Recommendations and opinions donot constitute basic acts, nor do resolutions or declarations.1999Y0618 — EN — 19.05.2003 — 001.001 — 9
(1) OJ C 89, 22.4.1975, p. 1.
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37. However, the following may be implemented without a basic act as
long as the actions which they are intended to finance fall withinthe competence of the Community:
(a) (i) appropriations for pilot schemes of an experimental nature
aimed at testing the feasibility of an action and its useful-ness. The relevant commitment appropriations may beentered in the budget for only two financial years. Theirtotal amount may not exceed EUR 32 million;
(ii) appropriations relating to preparatory actions intended to
prepare proposals with a view to the adoptionof future
Community actions. The preparatory actions are to follow
a coherent approach and may take various forms. The rele-vant commitment appropriations may be entered in thebudget for only three financial years at most. The legisla-tive procedure should be concluded before the end of the
third financial year. During the course of the legislative
procedure, the commitment of appropriations must corre-spond to the particular features of the preparatory actionas regards the activities envisaged, the aims pursued andthe persons benefited.
Consequently, the means implemented cannot correspond
in volume to those envisaged for financing the definitive
action itself. The total amount of the new headings
concerned may not exceed EUR 30 million per financialyear and the total amount of the appropriations actuallycommitted in respect of the preparatory actions may notexceed EUR 75 million.
When the preliminary draft budget is presented, the Commis-
sion will submit a report on the actions referred to in points (i)and (ii) which will also cover the objective of the action, anassessment of results and the follow-up envisaged;
(b) appropriations concerning actions of a specific, or even indefi-
nite, nature carried out by the Commission by virtue of tasksresulting from its prerogatives at institutional level, other thanits right of legislative initiative as referred to in point (a), and
specific powers directly conferred upon it by the EC Treaty. A
list is contained in Annex V, which forms an integral part ofthis Agreement. The list may be supplemented, in the presenta-tion of the preliminary draft budget, with an indication of theArticles in question and the amounts concerned;
(c) appropriations intended for the operation of each institution
under its administrative autonomy.
G.Expenditurerelatingtofisheries agreements
38. The institutions agree to finance expenditure on fisheries agree-
ments in accordance with the arrangements set out in Annex VI,
which forms an integral part of this Agreement.
H.Financingofthecommonforeignandsecuritypolicy(CFSP)
39. For the CFSP expenditure charged to the general budget of the
European Communities in accordance with Article 28 of the Treatyon European Union, the institutions will endeavour, in the concilia-tion procedure provided for in Annex III and on the basis of the
preliminary draft budget established by the Commission, to secure
each year agreement on the amount of the operational expenditureto be charged to the Community budget and on the distribution ofthis amount between the articles of the CFSP budget chaptersuggested inthe fourth subparagraph of this paragraph. Intheabsence of agreement, it is understood that the European Parlia-
ment and the Council will enter in the budget the amount
contained in the previous budget or the amount proposed in thepreliminary draft budget, whichever is the lower.
The total amount of operational CFSP expenditure will be entered
entirely in one budget chapter (CFSP) and distributed between thearticles of this chapter as suggested inthe fourth subparagraph of1999Y0618 — EN — 19.05.2003 — 001.001 — 10
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this paragraph. This amount is to cover the real predictable needs
and a reasonable margin for unforeseen actions. No funds will beentered in a reserve. Each article covers common strategies or joint
actions already adopted, measures which are foreseen but not yet
adopted and all future — i.e. unforeseen — action to be adoptedby the Council during the financial year concerned.
Since, under the Financial Regulation, the Commission has the
authority, within the framework of a CFSP action, to transferappropriations autonomously between articles within one budget
chapter, i.e. the CFSP allocation, the flexibility deemed necessary
for speedy implementation of CFSP actions will accordingly beassured. In the event of the amount of the CFSP budget duringthe financial year being insufficient to cover the necessaryexpenses, the European Parliament and the Council will seek asolutionas a matter of urgen cy, ona proposal from the Commis-
sion.
Withinthe CFSP budget chapter, the articles in to which the CFSP
actions are to be entered could read along the following lines:
— observation and organisation of elections/participation in demo-
cratic transition processes,
— Union envoys,— prevention of conflicts/peace and security processes,— financial assistance to disarmament processes,— contributions to international conferences,
— urgent actions.
The European Parliament, the Council and the Commission agree
that the amount for actions entered under the article mentioned in
the sixth indent may not exceed 20 % of the overall amount of theCFSP budget chapter.
40. Once a year, the Council Presidency will consult the European
Parliament on a Council document setting out the main aspectsand basic choices of the CFSP, including the financial implications
for the general budget of the European Communities. Furthermore,
the Presidency will regularly inform the European Parliament aboutthe development and implementation of CFSP actions.
Whenever it adopts a decision in the field of CFSP entailing
expenditure, the Council will immediately and in each case sendthe European Parliament an estimate of the costs envisaged (‘finan-cial statement’), in particular those regarding time-frame, staff
employed, use of premises and other infrastructure, transport facil-
ities, training requirements and security arrangements.
Once a quarter the Commission will inform the budgetary authority
about the implementation of CFSP actions and the financial fore-casts for the remaining period of the year1999Y0618 — EN — 19.05.2003 — 001.001 — 11
ANNEX I
FINANCIALPERSPECTIVE(EU-25)ADJUSTEDFORENLARGEMENTAT1999PRICES
(EUR million)
Commitment appropriations 2000 2001 2002 2003 2004 2005 2006
1. AGRICULTURE 40920 42800 43900 43770 44657 45677 45807
1(a) Commonagricultural policy 36620 38480 39570 39430 38737 39602 39612
1(b) Rural development 4300 4 320 4 330 4 340 5 920 6 075 6 195
2. STRUCTURAL ACTIONS 32045 31455 30865 30285 35665 36502 37940
Structural funds 29430 28840 28250 27670 30533 31835 32608Cohesionfun d 2615 2 615 2 615 2 615 5 132 4 667 5 332
3. INTERNAL POLICIES 5930 6 040 6 150 6 260 7 877 8 098 8 212
4. EXTERNAL ACTIONS 4550 4 560 4 570 4 580 4 590 4 600 4 6105. ADMINISTRATION(
1) 4560 4 600 4 700 4 800 5 403 5 558 5 712
6. RESERVES 900 900 650 400 400 400 400
Monetary reserve 500 500 250 0 0 0 0
Emergency aid reserve 200 200 200 200 200 200 200
Guarantee reserve 200 200 200 200 200 200 200
7. PRE-ACCESSION AID 3120 3 120 3 120 3 120 3 120 3 120 3 120
Agriculture 520 520 520 520
Pre-accession structural instrument 1040 1 040 1 040 1 040Phare (applicant countries) 1560 1 560 1 560 1 560
8. COMPENSATION 1 273 1 173 940
TOTAL APPROPRIATIONS FOR COMMITMENTS 92025 93475 93955 93215 102985 105 128 106741▼B1999Y0618 — EN — 19.05.2003 — 001.001 — 12▼M1
(EUR million)
Commitment appropriations 2000 2001 2002 2003 2004 2005 2006
TOTAL APPROPRIATIONS FOR PAYMENTS 89600 91110 94220 94880 100800 101 600 103840
Ceiling, appropriations for payments as % of GNI (ESA 95) 1,07 % 1,08 % 1,11 % 1,10 % 1,08 % 1,06 % 1,06 %
Margin for unforeseen expenditure 0,17 % 0,16 % 0,13 % 0,14 % 0,16 % 0,18 % 0,18 %Ownresources ceilin g 1,24 % 1,24 % 1,24 % 1,24 % 1,24 % 1,24 % 1,24 %
(1) The expenditure on pensions included under the ceiling for this heading is calculated net of staff contributions to the pension scheme, up to a maximu m of EUR 1 100 millionat 1999 prices for the period 2000 to 2006.▼M11999Y0618 — EN — 19.05.2003 — 001.001 — 13
ANNEX II
FINANCIALFRAMEWORK(EU-21)
(EUR million — 1999 prices)
Commitment appropriations 2000 2001 2002 2003 2004 2005 2006
1. AGRICULTURE 40920 42800 43900 43770 42760 41930 41660
Common agricultural policy (not including rural development) 36620 38480 39570 39430 38410 37570 37290
Rural development and accompanying measures 4300 4 320 4 330 4 340 4 350 4 360 4 370
2. STRUCTURAL OPERATIONS 32045 31455 30865 30285 29595 29595 29170
Structural Funds 29430 28840 28250 27670 27080 27080 26660
CohesionFun d 2615 2 615 2 615 2 615 2 515 2 515 2 510
3. INTERNAL POLICIES(1) 5930 6 040 6 150 6 260 6 370 6 480 6 600
4. EXTERNAL ACTION 4550 4 560 4 570 4 580 4 590 4 600 4 610
5. ADMINISTRATION(2) 4560 4 600 4 700 4 800 4 900 5 000 5 100
6. RESERVES 900 900 650 400 400 400 400
Monetary reserve 500 500 250 0 0 0 0
Emergency aid reserve 200 200 200 200 200 200 200
Loanguaran tee reserve 200 200 200 200 200 200 200
7. PRE-ACCESSION AID 3120 3 120 3 120 3 120 3 120 3 120 3 120
Agriculture 520 520 520 520 520 520 520
Pre-accession structural instruments 1040 1 040 1 040 1 040 1 040 1 040 1 040
PHARE (applicant countries) 1560 1 560 1 560 1 560 1 560 1 560 1 560
8. ENLARGEMENT 6 450 9 030 11610 14200 16780
Agriculture 1 600 2 030 2 450 2 930 3 400
Structural operations 3 750 5 830 7 920 10000 12080
Internal policies 730 760 790 820 850▼B1999Y0618 — EN — 19.05.2003 — 001.001 — 14
(EUR million — 1999 prices)
Commitment appropriations 2000 2001 2002 2003 2004 2005 2006
Administration 370 410 450 450 450
TOTAL COMMITMENT APPROPRIATIONS 92025 93475 100405 102245 103345 105 325 107440
TOTAL PAYMENT APPROPRIATIONS 89600 91110 98360 101590 100800 101 600 103840
Of which: enlargement 4 140 6 710 8 890 11 440 14 220
Payment appropriations as % of GNP 1,13 % 1,12 % 1,14 % 1,15 % 1,11 % 1,09 % 1,09 %Margin for unforeseen expenditure 0,14 % 0,15 % 0,13 % 0,12 % 0,16 % 0,18 % 0,18 %
Ownresources ceilin g 1,27 % 1,27 % 1,27 % 1,27 % 1,27 % 1,27 % 1,27 %
(1) In accordance with Article 2 of Decision No 182/1999/EC of the European Parliament and of the Council and Council Decision 1999/64/Euratom (OJ L 26, 1 .2.1999, p. 1 and p. 34), the amount of expenditure available during
the period 2000 to 2002 for research amounts to EUR 11510 million at current prices.
(2) The expenditure on pensions included under the ceilings for this heading is calculated net of staff contributions to the relevant scheme, within the limit of EUR 1 100 millionat 1999 prices for the period 2000 to 2006.▼B1999Y0618 — EN — 19.05.2003 — 001.001 — 15
▼B
ANNEX III
INTERINSTITUTIONAL COLLABORATION IN THE BUDGETARY
SECTOR
A. After the technical adjustment of the financial perspective for the forth-
coming financial year and prior to the Commission's decision on the
preliminary draft budget, a meeting of the trialogue will be convened to
discuss the possible priorities for the budget of that year, with due account
being taken of the institutions' powers.
B. 1. A conciliation procedure is set up for all expenditure.
2. As regards compulsory expenditure, the Commission, in presenting its
preliminary draft budget, will identify:
(a) appropriations connected with new or planned legislation;
(b) appropriations arising from the application of legislation existing
whenthe previous budget was adopted.
The Commission will make a careful estimate of the financial implica-
tions of the Community's obligations based on the rules. If necessary it
will update its estimates inthe course of the budgetary procedure. It will
supply the budgetary authority with all the duly justified reasons it may
require.
If it considers it necessary, the Commission may present to the budgetary
authority an ad hocletter of amendment to update the figures underlying
the estimate of agricultural expenditure in the preliminary draft budget
and/or to correct, on the basis of the most recent information available
concerning fisheries agreements in force on 1 January of the financial
year concerned, the breakdown between the appropriations entered in the
operational items for international fisheries agreements and those entered
inreserve.
This letter of amendment must be sent to the budgetary authority before
the end of October.
If it is presented to the Council less than a month before the European
Parliament's first reading, the Council will as a rule consider the ad hoc
letter of amendment when giving the draft budget its second reading.
As a consequence, before the Council's second reading of the budget, the
two arms of the budgetary authority will try to meet the conditions neces-
sary for the letter of amendment to be adopted on a single reading by
each of the institutions concerned.
3. The purpose of the conciliation procedure is to:
(a) continue discussions on the general trend of expenditure and, in this
framework, on the broad lines of the budget for the coming year in
the light of the Commission's preliminary draft budget;
(b) secure agreement between the two arms of the budgetary authority
on:
— the appropriations referred to in point 2(a) and (b), including
those proposed inthe ad hocletter of amendment referred to at
point 2,
— the amounts to be entered in the budget for non-compulsory
expenditure, in accordance with the third subparagraph of para-
graph 12 of this Agreement,
— and, particularly, matters for which reference to this procedure is
made inthis Agreemen t.
4. The procedure will begin with a trialogue meeting convened in time to
allow the institutions to seek an agreement by no later than the date set
by the Council for establishing its draft budget.
There will be conciliation on the results of this trialogue between the
Council and a European Parliament delegation, with the Commission
also taking part.
Unless decided otherwise during the trialogue, the conciliation meeting
will be held at the traditional meeting between the same participants on
the date set by the Council for establishing the draft budget.
5. A new trialogue meeting will be held before the European Parliament's
first reading to enable the institutions to identify the programmes on
which the conciliation is to focus so as to reach an agreement on their
allocations. At that meeting the institutions will also exchange views on
the state of implementation of the current budget with a view to
discussing the omnibus transfer or a possible supplementary and
amending budget.1999Y0618 — EN — 19.05.2003 — 001.001 — 16
▼B
6. The institutions will continue the conciliation after the first reading of the
budget by each of the two arms of the budgetary authority inorder to
secure agreement on compulsory and non-compulsory expenditure and,
inparticular, to discuss the ad hocletter of amendment referred to in
point 2.
A trialogue meeting will be held for this purpose after the European
Parliament's first reading.
The results of the trialogue will be discussed at a second conciliation
meeting to be held the day before the Council's second reading.
If necessary, the institutions will continue their discussions on non-
compulsory expenditure after the Council's second reading.
7. At these trialogue meetings, the institutions' delegations will be led by the
President of the Council (Budgets), the Chairman of the European Parlia-
ment's Committee on Budgets and the Member of the Commission with
responsibility for the budget.
8. Each arm of the budgetary authority will take whatever steps are required
to ensure that the results which may be secured in the conciliation
process are respected throughout the current budgetary procedure.1999Y0618 — EN — 19.05.2003 — 001.001 — 17
▼B
ANNEX IV
CLASSIFICATIONOFEXPENDITURE (1)
Heading1
— Expenditure of the common agricultural policy
and expenditure on animal and plant healthCompulsory
— Rural development and accompanying measures Non-compulsory
Heading2 Non-compulsory
Heading3 Non-compulsory
Heading4
— Expenditure resulting from international agree-
ments which the European Union or Community
has concluded with third parties, including fisheries
agreementsCompulsory
— Contributions to international organisations or
institutionsCompulsory
— Other items covered by heading 4 of the finan-
cial perspectiveNon-compulsory
Heading5
— Allowances and miscellaneous contributions on
termination of serviceCompulsory
— Pensions and serverance grants Compulsory
— Legal expenses Compulsory
— Damages Compulsory
— Compensation Compulsory— Other items covered by heading 5 of the finan-
cial perspectiveNon-compulsory
Heading6
— Monetary reserve Compulsory
— Loanguaran tee reserve Compulsory
— Emergency aid reserve Non-compulsory
Heading7
— Agriculture (rural development measures and
accompanying measures)Non-compulsory
— Pre-accession structural instrument Non-compulsory
— PHARE (applicant countries) Non-compulsory
(1) Compulsory expenditure.
Non-compulsory expenditure.1999Y0618 — EN — 19.05.2003 — 001.001 — 18
▼B
ANNEX V
ListofArticlesoftheECandEAECTreatieswhichdirectlyconferpowers
on the Commission which are specific and likely to have financial implica-
tions in Part B (operating appropriations)of Section III— Commission—
ofthebudget
I. EC TREATY
Article 138 Social dialogue
Article 140 Studies, opinions, consultations on social matters
Articles 143 and 145 Special reports in the social fieldArticle 152(2) Initiatives to promote coordination with regard to
health protection
Article 155(2) Initiatives to promote coordination with regard to
trans-European networks
Article 157(2) Initiatives to promote industrial coordination
Article 159, second
paragraphReport onprogress made towards achievin g
economic and social cohesion
Article 165(2) Initiatives to promote coordination with regard to
technological research and development
Article 173 Report on technological research and developmentArticle 180(2) Inititatives to promote the coordination of develop-
ment cooperation policies
II. EURATOM TREATY
Chapter 6, Section5 Supply policy
Article 70 Financial support, within the limits set by the
budget, to prospecting programmes in the territories
of Member States
Chapter 7 Articles 77 et
seq.Safeguards1999Y0618 — EN — 19.05.2003 — 001.001 — 19
▼B
ANNEX VI
FINANCING OF EXPENDITURE DERIVING FROM FISHERIES
AGREEMENTS
A. Expenditure relating to fisheries agreements is financed by two items (by
reference to the 1998 budget nomenclature):
(a) international fisheries agreements (B7-8000);
(b) contributions to international organisations (B7-8001).
All the amounts relating to agreements and protocols which will be in force
on 1 January of the year in question will be entered under heading B7-8000.
Amounts relating to all new or renewable agreements which will come into
force after 1 January of the year in question will be assigned to heading B7-
8000 but entered in the reserve B0-40.
B. In the conciliation procedure provided for in Annex III, the European Parlia-
ment and the Council will seek to agree on the amount to be entered in the
budget headings and in the reserve on the basis of the proposal made by the
Commission.
C. The Commission undertakes to keep the European Parliament regularly
informed about the preparation and conduct of the negotiations, including
the budgetary implications.
In the course of the legislative process relating to fisheries agreements, the
institutions undertake to make every effort to ensure that all procedures are
carried out as quickly as possible.
If appropriations relating to fisheries agreements (including the reserve)
prove insufficient, the Commission will provide the budgetary authority
with the necessary information for an exchange of views in the form of a
trialogue, possibly simplified, on the causes of the situation, and on the
measures which might be adopted under established procedures. Where
necessary, the Commission will propose appropriate measures.
Each quarter the Commissionwill presen t to the budgetary authority detailed
information about the implementation of agreements in force and financial
forecasts for the remainder of the year.1999Y0618 — EN — 19.05.2003 — 001.001 — 20