COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.10.1996 
COM(96) 518 final 
COMMISSION COMMUNICATION 
TO THE COUNCIL AND PARLIAMENT 
Financing new buildings for the European Parliament 
in Brussels and Strasbourg 

FINANCING NEW BUILDINGS FOR THE EUROPEAN PARLIAMENT IN 
BRUSSELS AND STRASBOURG 
INTRODUCTION 
1. The decision adopted by the governments of the Member States at the European 
Council in Edinburgh on 12 December 1992 requires the European Parliament to carry 
on its activities in Strasbourg, Brussels and Luxembourg. Appropriate buildings must 
therefore be made available in each of these three cities. 
For new buildings, Parliament is tending towards long-term leasehold formulas with 
purchase options: 
(a) For Brussels and Strasbourg, the aim is to establish a buildings capacity compatible 
with a Parliament of around 700 members, which it currently considers its maximum 
potential size, even in the case of future enlargement of the European Union. 
In Brussels, the "Espace Leopold" programme consists of constructing* three buildings. 
Buildings Dl and D2 have been completed and fully paid for from Parliament's budget 
(for a total of ECU 344.35 million, including ECU 28.55 million in interest). Building 
D3, the cost of which is currently estimated at ECU 831 million including the land, will 
be ready for 1 April 1997. Parliament intends to have vacated all other buildings apart 
from the Espace Leopold, Montoyer and Eastman buildings by the end of 1997, which 
means that shortly after this date the Belliard I and II, Renard, Remorqueur and 
Van Maerlant buildings will be given up. 
In Strasbourg, the IPE IV building, the cost of which is currently estimated at 
ECU 460 million including land, should be available to Parliament on 1 October 1997. 
At that point, Parliament will cease to occupy the Palais and the IPE III building. 
(b) For Luxembourg, Parliament does not foresee any new building projects, but is 
examining the possibilities for purchasing office buildings that it currently leases. 
2. Parliament recently drew up new guidelines for the conditions for financing the 
D3 building in Brussels and the IPE IV building in Strasbourg, with the aim saving 
money and increasing the transparency of the operations: 
- examination of the possibilities of replacing the current financing arrangements, 
which involve the intermediation of property developers and the conclusion of 
leasehold contracts with them, by a direct financing allowing for the purchase of 
the buildings as soon as they are available, or shortly afterwards; 
- reduction of the period for financing from the current 20 years (Bureau decision 
of 24 January 1996) to 10 years. This shorter period was assumed by Parliament 
in the figures it put forward for the 1997 preliminary draft budget. 
Parliament would also like to introduce a strict alignment, as far as possible, between the 
financing formulas in Strasbourg and Brussels. 
3. The European Parliament asked the Commission, as the competent body for 
proposing, regulating and managing the budget, to present a communication to the 
budgetary authority on these guidelines. 
This communication is the response to the request. First of all, it notes the main features 
of the current financing system, on the basis of information provided by Parliament. It 
then states what, according to the Commission, would be the legal, accounting, financial 
and budgetary implications of the new guidelines envisaged by Parliament. 
4. The budgetary authority is asked to take a position: 
- on the principle of direct financing contracted by the European Community 
for these buildings operations, the repayment of which would be charged to 
Parliament's budget; 
- on the length of the financing period, either in the case of direct financing 
or within the framework of the current financing system (without prejudice 
to the improvements which could be made to it, depending on the 
possibilities of the financial markets). 
I - THE CURRENT FINANCING SYSTEM 
1. The D3 building in the "Espace Leopold" complex in Brussels 
The building work undertaken by Parliament in Brussels will bring the total area 
used by it to around 406 000 m2 (above and below ground), compared with 
175 000 m2now. 
A leasehold contract with purchase option was concluded for the construction of the 
complex, for a period of 27 years from the delivery date for each building and with 
a repayment period of 20 years, signed on 8 January 1992 between Parliament and 
the SEL (Société Espace Leopold). 
With regard to long-term financing, this contract allows Parliament, in close 
collaboration with the SEL, to modify, if it is considered more beneficial, the 
financing* terms stated at the outset. 
The contract gives Parliament the possibility of making one or several capital 
payments, deducted from the amount still outstanding. These payments lead to the 
reduction of either the amount or the number, as Parliament decides, of future 
instalments. In this way, the investment costs of the Dl and D2 buildings were fully 
repaid on 31 July 1995 and 1 March 1996 respectively. For the D3 building, the 
financing conditions currently remain those set out at the beginning: credit provided 
by a bank consortium, over 20 years, in BFR (BIBOR+0.15%) or in ecus 
(LIBOR+0.275%). 
Parliament can, at any time, buy the buildings for the sum of the outstanding capital 
or for one ecu if it has been fully repaid. However, the purchase option for the land 
on which the D3 building stands may only be exercised until 31 May 1998, and in 
this case Parliament is bound also to exercise the purchase option on the rest of the 
complex. 
The land on which the D3 building stands is currently leased by the Belgian railways 
(SNCB), which owns it, to the SEL, under a 93-year lease, which has already been 
paid in full. On the condition that Parliament exercises its option on this land before 
31 May 1988, and, therefore, on the whole complex, the Belgian government has 
undertaken to subsidize this purchase (valued, at the end of 1995, at 
BFR 4 138 million, or ECU 107 million), on the basis of the terms of payment 
currently being negotiated with Parliament. 
Independently of the question of whether the land will be purchased or not, the terms 
of the Belgian government's acceptance of the costs of development (BFR 2 600 
million excluding VAT) still have to be agreed. 
2. The IPE IV building in Strasbourg 
This building will consist of a new assembly chamber seating 750, a press centre and 
1133 offices. The building work undertaken by Parliament in Strasbourg will bring 
the total area occupied there to around 255 000 m2 (above and below ground), 
compared with 120 000 m2 now. 
The IPE IV building has been leased for 27 years from the date of delivery and with 
a repayment period of 20 years. The lease was signed on 31 March 1994 by 
Parliament and the SERS (Société d'Aménagement et d'Equipement de la Région 
de Strasbourg). Construction is being financed by a FF 340 million loan 
(PIBOR+0.125%) and a loan in ecus equivalent to FF 2 214 million 
(LIBOR+0.18%). The French government and the various local authorities concerned 
have underwritten a guarantee of up to FF 2 000 million. 
As in the case of the D3 building in Brussels, the contract for the IPE IV building 
leaves Parliament the possibility: 
- of asking for the initial financing conditions to be renegotiated; 
- of making capital payments reducing the total of the instalments or the 
repayment period, 
- of announcing its intention to buy at any moment between the lease taking 
effect and its expiry. However, the question remains of what, depending on the 
length of time before this purchase option is exercised, the fiscal treatment of 
this operation would be in terms of VAT. An answer to this is awaited from the 
French government. 
The SERS has already paid half of the contract price of the land (contract price: 
FF 130 million) to the City of Strasbourg. The balance of FF 65 million must be 
paid 10 years after the building is completed. However, the City of Strasbourg will 
forgo this second payment if Parliament has already exercised its purchase option. 
3. Budgetary effect of the current financing system 
The foreseeable budgetary implications of keeping the current financing conditions 
are presented in Annex A: 
1 - Financial and budgetary data on the D3 building in Brussels 
2 - Financial and budgetary data on the IPE IV building in Strasbourg 
3 - Budgetary costs relating to the other buildings occupied by Parliament (1997-99) 
II - THE IMPLICATIONS OF THE NEW GUIDELINES ADOPTED BY THE EUROPEAN 
PARLIAMENT 
The question of whether direct financing can and should be used to purchase new 
buildings for Parliament in Brussels and Strasbourg must be considered mainly on 
the basis of legal and accounting considerations, as well as from the point of view 
of the benefits which could accrue from it, in particular financial benefits. However, 
the question of shortening the financing period, either within the framework of direct 
financing or within that of the current system, essentially revolves around the 
compatibility of the scheduling of the resulting annual charges with the budgetary 
constraint. 
1. Legal and accounting aspects 
Up to now, borrowing (directly on the capital markets or from financial institutions) 
has been used by the European Community as a means of obtaining the necessary 
funds to be able to grant loans for policy operations. The provisions of the Financial 
Regulation (Article 20(5)) correspond to this borrowing/lending link. 
(a) Legal aspects 
Even if, in the past, direct financing by banks was never used for purchasing 
buildings, this formula, in the Commission's view, is possible from a legal point of 
view. 
Using direct financing (instead, for example, of indirect borrowing through a 
developer with a lease-purchase contract or a long-term lease) for the purchase of 
a building is not incompatible with the provisions of the Treaty. The principle of a 
balanced budget set out in Article 199 of the EC Treaty and in the decision on the 
own resources system would not be breached if the Community borrowed for a 
specific operation leading to the formation of assets (in this case, real assets, as 
opposed to a financial asset as in lending/borrowing operations) justified by its 
activities and requiring a considerable lump-sum expenditure. It is own resources that 
will be used to cover the annual budgetary expenditure for the repayment of the 
loan, while the capital operations (loan and purchase of the building) do not appear 
in the budget, but are recorded in the assets accounts. 
Incidentally, this financing formula was already proposed by the Commission in 
1992 for the "Maison d'Europe" building project in Geneva. 
The implementation of borrowing/lending operations within the framework of 
Community operational policies is based on specific legal instruments adopted on the 
basis of Article 235 of the Treaty. 
In the case of direct financing for the acquisition of a building to be used for 
carrying on the institutions' activities, the operation comes under the administrative 
management of these institutions, which make their own autonomous decisions in 
this respect. The Commission therefore believes that a specific legal instrument is 
not necessary and that direct financing for the purchase of buildings could be done 
with the backing of the two arms of the budgetary authority. 
The budgetary authority would authorize the Commission to charge the necessary 
financing to the European Community, pursuant to Article 211 of the Treaty, 
according to the methods and amounts shown. 
The contracts relating to the purchase of buildings could be passed by Parliament, 
on a mandate from the Commission, the European Community then becoming the 
owner of these buildings. 
(b) Accounting aspects 
As the proceeds of the financing contracted do not constitute budget revenue, they 
would be treated as an extra-budgetary operation and would be included in an annex 
to part B of the Commission budget, in accordance with the arrangements laid down 
in Article 20(5) of the Financial Regulation. The building and the corresponding 
borrowing would be included in the balance sheet accounts among the institution's 
assets. 
The amounts of the repayment instalments for the finance contracted would be 
entered each year under expenditure in Chapter 20 (investments in immovable 
property, rental of buildings and associated costs) of the Parliament section of the 
budget, with the appropriate remarks. 
There would be no need to make a guarantee entry in the budget, because the risk 
of default could only come from the budget itself. 
2. Financial aspects 
In the case of direct financing contracted by the Community for the acquisition of 
buildings, the best terms and most appropriate techniques will first have to be sought 
by asking for tenders from financial institutions interested. In the choice of 
financing arrangements, and therefore the other parties to the contract, it will be 
necessary to take into account not just the comparative cost of the various formulas 
proposed, but also the possibilities of making partial early repayments, should funds 
be available in the budget, and the possibilities of limiting the risks of variability in 
the periodic payments, which might jeopardize the orderly long-term development 
of the administrative expenditure of all the institutions. 
The amounts of the annual instalments for repayment of financing of this type, based 
on the cost of the buildings to be acquired and the assumptions corresponding to the 
current market conditions, are indicated in Annex B. for various repayment periods. 
This same annex also includes a comparison with the current financial arrangement. 
This information shows that, over the same period, the annual budget expenditure 
which would result from direct financing would be only marginally less than that 
which can be anticipated under the current system of financing. This result is not 
surprising in that the savings that can be expected from direct financing involve only 
a reduction in the intermediation margins and perhaps the possibility of obtaining 
slightly better terms from the financial institutions by direct negotiation. 
However, in view of past commitments, this formula would facilitate the exercise of 
purchase options on the buildings within the time limits necessary to obtain the 
benefit of free acquisition of the land: 
- by means of a subsidy corresponding to the price of the land on which the D3 
building stands (ECU 107 million), the methods of payment for which are currently 
being negotiated between the Belgian government and Parliament; 
- by the undertaking given by the French authorities concerned that under these 
conditions they would forgo the half payment, in the 10th year after delivery of the 
building, of the land on which the IPE IV building stands, by which time it would 
mean a saving of around ECU 10 million. 
The Parliament sees the main advantage of the use of direct financing as being a 
considerable simplification of the current legal arrangements. Apart from the 
immediate acquisition of ownership of the buildings, this rbrmula would mean that 
contractual relations could be limited to those established between the Community 
and the group of banks providing the finance, so that there would no longer be any 
intermediation by property developers. This would lead to greater transparency in 
managing the operations, notably for the public. 
3. The question of the financing period: compatibility with the budget 
constraint 
Parliament's wish to shorten the time period initially envisaged for the financing is 
not in fact connected to the formula which would be adopted for this financing: a 
shorter period is possible both in the case of the current arrangements and in the case 
of direct financing; earlier repayments than on the normal schedule would also be 
possible in the two cases. 
(a) Financial considerations 
It is certain that repayment over a shorter period costs less in total, at current prices, 
than repayment over a longer period, the cumulative interest being less, assuming the 
rate stays the same. However, two elements must be taken into account in the 
financial calculation: 
Given the strict budgetary constraint, account should be taken of the alternative 
uses for the additional resources which are needed in the first few years to 
make a repayment over a shorter period. The shortening of the financing period 
may lead to other expenditure being supplanted and therefore to constraints 
which are difficult to sustain in certain areas of activity, or to less economical 
choices for other projects and other institutions. 
- If the comparison is made in present values, all other things being equal, and 
since the rate of discount is equal to the interest rate1, the period of the 
financing has no effect on its cost. 
(b) The budgetary constraint 
The ceiling of heading 5 of the financial perspective is set up to 1999, and it is 
difficult to envisage a revision to raise this ceiling before then. It is also not very 
likely that the allocation for the administrative expenditure of the institutions will 
increase appreciably in real terms in the new framework which will have to be 
defined in the medium-term period to come. Furthermore, within this allocation, 
expenditure on pensions should increase considerably. 
The past and future development of the various categories of administrative 
expenditure of the institutions covered by heading 5 over the period 1995-99 is 
presented in Annex C. 
It emerges from this that, even in the current situation of financing the new 
Parliament buildings over 20 years, there will be tight constraints between now and 
1999, and particularly in 1998, on the growth of the other institutions' administrative 
expenditure. This situation will make it very difficult to implement recruitment 
programmes as planned after the last enlargement, and adapt building capacity 
correspondingly. These constraints will very probably continue beyond 1999. 
Shortening the period of financing of Parliament's buildings to 10 years would 
therefore severely handicap the running of the other institutions. 
Still assuming a 10-year financing of Parliament's buildings and taking as a basis the 
most recent scheduling of its other administrative expenditure, as established by its 
Secretariat, Parliament's share of expenditure in the heading 5 total would rise from 
19.9% in 19962 to 21.8% in 1998 and to 21.3% in 1999 (in relation to the 
heading 5 ceiling excluding pensions, this share would rise from 22.0% in 1996 to 
24.2% in 1998 and 23.7% in 1999). 
An entirely valid assumption in this case. 
Including the effect of the supplementary and amending budget 1/1996. 
CONCLUSIONS 
The Commission is of the opinion: 
(1) That using a direct financing formula for Parliament's new buildings, replacing 
the current system, is legally possible and compatible with the principles of 
sound financial management: 
- it would result in a significant simplification of the current system and much 
greater transparency in contractual relations; 
- using this formula would make it possible to obtain subsidies related to the 
acquisition of land on which the buildings stand; 
- the new financing arrangement would make it possible to become owner of the 
buildings as soon as,.or shortly after, they are delivered: 
- savings, albeit small, can be expected from this new financial package, if the 
market possibilities are properly exploited. 
(2) That shortening the period of financing these buildings could force the other 
institutions into restrictive measures which would hamper their smooth 
operation. 
Any shortening of the financing period envisaged by Parliament should not lead 
to an increase in its share in the heading 5 total beyond 20%, which roughly 
corresponds to the current situation. This proportion is what the chairmen of the 
political groups in Parliament recommended in November 1988 as a financial 
package for establishing ils future budgets. It would already impose tight 
constraints on the other institutions, if account is taken of the expected increase 
in expenditure on pensions, which involves an inevitable reduction in resources 
for the other institutions when Parliament's share in the total of the heading 
reaches a given level. 
10 
ANNEX A: BUDGETARY IMPACT OF THE CURRENT FINANCING SYSTEM 
1 - D3 building in Brussels 
Anticipated date of availability: 1 April 1997 
Estimated cost of the building at the date of availability: ECU 831 million 
(BFR 32 070 million) 
Calculation of the annual lease payment: 
- Period: 20 years 
- Payment: six-monthly, the assumption here being that there would be no early 
payments 
- Basic interest rate: 6% (ECU LIBOR) including margin. The assumption here is 
that the rate remains unchanged over the whole period. 
Exchange rate used: 1 ECU = BFR 38.6974, assumed to remain unchanged over 
the whole period 
Anticipated amount of the annual payment: 
- 1997: ECU 53.9 million 
- subsequent years up to 2017: ECU 71.9 million (per full year) 
Other revenue or expenditure: 
- Subsidy from the Belgian government for the purchase of the land: not taken into 
account in this case (the condition that the ground be purchased, with the whole 
complex, before the deadline of 1998 could not be fulfilled) 
- Possible subsidy ot the cost of developing the land: not taken into account 
(independent of the financing formula) 
11 
ANNEX A: BUDGETARY IMPACT OF THE CURRENT FINANCING SYSTEM 
(CONTD.) 
2 - IPE IV building in Strasbourg 
Anticipated date of availability: 1 October 1997 
Estimated cost of the building at the date of availability: ECU 460 million 
(FF 3 000 million) 
Calculation of the annual lease payment: 
- Period: 20 years 
- Payment: six-monthly, at the end of the period, no early payments 
- Basic interest rate: 6% (ECU LIBOR) for ECU 410 million, ovçr a period of 20 
years; 6% (ECU LIBOR) for ECU 50 million, over a period of 6 years 
The assumption here is that the rate remains unchanged over the whole period. 
Exchange rate used: 1 ECU = FF 6.518, assumed to remain unchanged over the 
whole period 
Anticipated amount of the annual payment: 
ECU (million) 
Building 
Fitting out 1997 
8.8 
2.5 up to 2003 
(per full year) 
-
10.068 up to 2017 
(per full year) 
35.474 
-
Other revenue or expenditure: 
Half payment of the ground in 2007 if the building is not purchased before that 
date: FF 65 million, i.e. ECU 9.9 million. Effect on the sum of annual payments 
to be made to the SERS from this date: ECU 1.3 million 
12 
ANNEX A: BUDGETARY IMPACT ON THE CURRENT SYSTEM OF FINANCING 
3- Budgetary charges relating to the other buildings occupied by Parliament 
(1997-99) in ECU million 
BAK 
Chamber 
Schuman 
Senningerberg 
Tour 
Total Luxembourg 
Palais 
IPE 
IPE I 
IPE II 
IPE III 
Parking 
Total Strasbourg 
Belliard I and II 
Montoyer 
Renard 
Van Maerlant 
Eastman 
Remorqueur 
Dl 
D2 
Total Brussels 
TOTAL 1997 
10.3 
0.3 
3.8 
0.4 
1.7 
16.5 
0.9 
5.3 
0.5 
2.8 
5.0 
0.04 
14.5 
7.1 
5.2 
1.3 
20 
0.3 
0.3 
0 
0 
16.2 
47.2 1998 
10.5 
0.3 
3.9 
0.4 
1.8 
16.9 
5.4 
0.5 
2.9 
. 
0.04 
8.8 
5.3 
0.3 
0 
0 
5.6 
31.3 1999 
10.8 
0.3 
4.0 
0.5 
1.9 
17.5 
5.5 
0.6 
3.0 
0.04 
9.1 
5.4 
0.4 
0 
0 
5.8 
32,4 
13 
ANNEX B: PURCHASE OF BUILDINGS BY DIRECT FINANCING CONTRACTED BY 
THE EC 
1 - D3 building in Brussels 
Amount of financing to be contracted: ECU 831 million 
Calculation of the constant repayment instalments: 
- Interest rate: 5.9%, assumed to remain constant over the repayment period 
- Frequency of payments: June and December 
- Payments made at the end of the period 
Amounts of constant repayment instalments, in million ecus: 
1997 Subsequent years 
Over 10 years 83^4 111.257 
Over 15 years 632 84.292 
Over 20 years 5Ï5 71.360 
Other revenue and expenditure: 
- Subsidy from the Belgian government for the land, if the purchase option is 
exercised. The assumption used here is that the subsidy is staggered over 10 years, 
discounted at a rate of 5.8%, i.e. an annual payment of ECU 13.6 million. 
- Possible subsidy of the cost of developing the land: not taken into account 
(independent of the financing formula) 
14 
ANNEX B: PURCHASE OF BUILDINGS BY DIRECT FINANCING CONTRACTED BY 
THE EC (CONTD.) 
2- IPE IV Building in Strasbourg 
Amount of financing to be contracted: ECU 460 million, including 
ECU 50 million over 6 years 
Calculation of the constant repayment instalments: 
- Interest rate: 5.9%, assumed to remain constant over the repayment period 
- Frequency of payments: June and December 
- Payments made at the end of the period 
Amounts of constant repayment instalments, in million ecus: 
Over 10 years 
Over 15 years 
Over 20 years 1997 
16.2 
12.8 
11.3 6 first years 
(full years) 
64.8 
51.5 
45.2 Subsequent 
years 
54.8 
41.5 
35.2 
Other revenue and expenditure: 
Non payment of the second half (FF 65 million, i.e. ECU 9.9 million) of the 
price of the ground, the 10th year following delivery, as a result of prior 
acquisition of the building 
15 
ANNEX B: PURCHASE OF THE BUILDINGS BY DIRECT FINANCING CONTRACTED 
BY THE EC (CONTD.) 
3- Costs compared with use of direct financing and with the current system 
of financing 
Cumulative total over a financing period of 20 years, in million ecus 
Difference: total 
lease payments minus 
total of repayment 
instalments 
Subsidy D3 land 
Subsidy IPE IV land 
Total Current prices 
D3 
10.8 
136.0 
-
146.8 IPE IV 
6.0 
-
9.9 
15.9 Total 
16.8 
136.0 
9.9 
162.7 Present values, 1997 (1) 
D3 
6.5 
107.0 
-
113.5 IPE IV 
3.5 
-
5.5 
9.0 Total 
10.0 
107.0 
5.5 
122.5 
(1) Discounted at a rate of 6% per year 
16 
ANNEX C: EXPENDITURE UNDER HEADING 5 OF THE FINANCIAL PERSPECTIVE, 
1995-99 
Method 
Table 1 below presents a multi-stage breakdown of the heading between the various 
categories of expenditure to be covered by the ceiling: 
- Pensions (all institutions) 
- Buildings (purchases/leases): Parliament, Commission (except the Publications Office), 
other institutions 
- Other Parliament expenditure (members and staff, administration) 
- Administrative expenditure related to the occupation of the buildings of the institutions 
other than Parliament 
- The balance beneath the ceiling of the heading shows the amounts available for 
expenditure, other than on buildings, for the institutions other than Parliament 
Table 2 shows the development of the institutions' share in the tota1 of the heading 
(including or excluding pensions). For the years 1997 to 1999, only Parliament's share 
is shown, according to the forecast supplied for this institution, as the respective shares 
of the other institutions will depend on decisions made by the budgetary authority for 
dividing resources between the needs shown. 
Data sources and assumptions 
1. Heading 5 ceiling at current prices: current financial perspective, inflation rate of 2% 
in 1998 and 1999. This-last assumption is also applied for estimating the foreseeable 
needs for the various categories of expenditure for the last two years. 
2. Expenditure on pensions (all institutions): financial forecast by the Commission, 
updated for 1997 in the light of the last estimates made under the current budgetary 
procedure. 
3. Parliament expenditure: 
(a) Buildings programmes: 
- 1997: financing of new buildings over 10 years: PDB 
financing of new buildings over 20 years: estimates by Parliament's Secretariat 
- 1998-99: estimates given by Parliament's Secretariat, based on the assumption of direct 
financing of the new buildings, over 10 or 20 years. 
17 
- The payment, staggered over the first 10 years, of the Belgian government's subsidy for 
the purchase of the land on which the D3 building stands, is deducted from the total of 
repayment instalments. 
(b) Other expenditure: updated programme established by Parliament's secretariat 
4. Buildings expenditure (rental/purchases) of the institutions other than Parliament 
(a) 1997: PDB 
(b) 1998-99: forecasts by the institutions concerned, established for the 1997 PDB. These 
schedules correspond, on the whole, with those adopted in February 1996 by the 
interinstitutional technical group on "building programmes and financing terms" (GRIM), 
assuming that preference will be given to lease-purchase formulas. 
5. Other expenditure related to buildings (other than that of Parliament) 
This refers to expenditure on maintenance, security guards, insurance, network and utility 
connections, etc. Forecasts by the institutions concerned. 
6. Other expenditure not already mentioned (staff expenditure and routine administrative 
costs, except property, of the institutions other than Parliament) 
This is determined as the balance in relation to the heading 5 ceiling. 
18 
ANNEX C 
Table 1 : EXPENDITURE UNDER HEADING 5, MILLION ECUS, CURRENT PRICES 
1. Heading ceiling 
% p.a. 
2. Pensions 
3. (1-2) Ceiling minus pensions 
% p.a. 
4. Expenditure on buildings 
Parliament 
(a) over 10 years 
(b) over 20 years 
Commission 
Other institutions 
Total 
(a) 
(b) 
5. Parliament: expenditure other 
than rental/purchase of buildings 
% p.a. 
6. Parliament: total expenditure 
(a) Over 10 years 
(b) Over 20 years 1995 
4022 
349.8 
3672.2 
184.9 
181.8 
37.9 
404.6 
658.4 
843.3 1996 
4191 
4.2% 
396.5 
3794.5 
3.3% 
99.7 
183.3 
82.5 
365.5 
733.9 
11.5% 
833.6 1997 
4352 
3.8% 
421.3 
3930.7 
3.6% 
137.0 
98.8 
207.1 
33.5 
377.6 
339.4 
750.2 
2.2% 
887.2 
849.0 1998 
4504 
3.5% 
450.2 
4053.8 
3.1% 
• 193.8 
134.3 
248.7 
37.3 
479.8 
420.3 
788.0 
5.0% 
981.8 
922.3 1999 
4663 
3.5% 
475.5 
4187.5 
3.3% 
194.9 
135.4 
263.7 
38.8 
497.4 
437.9 
799.1 
1.4% 
994.0 
934.5 
19 
ANNEX C 
Table 1 (contd.): EXPENDITURE UNDER HEADING 5 
7. (3-4-5) Other institutions: 
margin available for expenditure 
other than buildings 
% p.a 
(a) 
% p.a 
(b) 
% p.a. 
8. Other institutions: routine 
expenditure connected with 
buildings 
9. (7-8) Other institutions: 
margin available for staff costs 
and running costs except 
property 
% p.a. 
(a) 
% p.a. 
(b) 
% p.a. 1995 
2609.2 
105.4 
2503.8 1996 
2695.1 
3.3% 
109.9 
2585.2 
3.3% 1997 
2802.9 
4.0% 
2841.1 
5.4% 
118.2 
2684.7 
3.8% 
2722.9 
5.3% 1998 
2786.0 
-0.6% 
2845.5 
0:2% 
126.6 
2659.4 
-0.9% 
2718.9 
-0.1% 1999 
2891.0 
3.8% 
2950.5 
3.7% 
130.3 
2760.71 
3.8% 
2820.22 
3.7% 
i.e. an average annual growth rate in real terms of 0.2% from 1996 to 1999 
i.e. an average annual growth raie in real terms of 0.9% from 1996 to 1999 
20 
ANNEX C 
Table 2: STRUCTURE OF EXPENDITURE BY INSTITUTION UNDER HEADING 5, IN % 
1. Shares in the total ceiling of 
heading 5 
Pensions 
Parliament 
(a) 
(b) 
Commission 
Other institutions 
2. Shares in the heading 5 
ceiling, excluding pensions 
Parliament 
(a) 
(b) 
Commission 
Other institutions 1995 
8.7% 
21.0% 
54.3% 
15.5% 
23.0% 
59.4% 
17.0% 1996 
9.5% 
19.9% 
53.6% 
16.3% 
22.0% 
59.2% 
18.0% 1997 
9.7% 
20.4% 
19.5% 
22.6% 
21.6% 1998 
10.0% 
21.8% 
20.5% 
24.2% 
22.8% 1999 
10.2% 
21.3% 
20.0% 
23.7% 
22.3% 
21 

ISSN 0254-1475 
COM(96) 518 final 
DOCUMENTS 
EN 01 
Catalogue number : CB-CO-96-525-EN-C 
ISBN 92-78-10389-6 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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