Communication from the Commission to the Council and the European Parliament - Technical adjustment of the financial perspective for 2003 in line with movements in GNI and prices (Paragraph 15 of the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure)
Date: 2002-02-19
Institutions: European Commission
Subjects: budgetary discipline (EU), budgetary procedure, interinstitutional agreement, multiannual financial framework, national income, price fluctuation

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 19.02.2002
COM(2002) 86 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Technical adjustment of the financial perspective for 2003
in line with movements in GNI and prices

(Paragraph 15 of the Interinstitutional Agreement of 6 May 1999 on budgetary
discipline and improvement of the budgetary procedure)

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

Technical adjustment of the financial perspective for 2003
in line with movements in GNI and prices

(Paragraph 15 of the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and
improvement of the budgetary procedure)

1.

The Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement
of the budgetary  procedure1 contains the financial perspective table for EU-15 (Annex  I)
and the indicative financial framework  for EU-21 (Annex II) based on the assumption of
an  enlarged  Union  with  six  new  Member  States  from  2002  (Cyprus,  Estonia,  Hungary,
Poland, the Czech Republic and Slovenia).

Paragraph 15 of the Interinstitutional Agreement states that each year the Commission will,
ahead  of  the  budgetary  procedure  for  year  n+1,  make  a  technical  adjustment  to  the
financial perspective in line with movements in the EU's gross national product (GNP) and
prices.

The  purpose  of  this  communication  is  to  present  to  the  budgetary  authority  the  result  of
this technical adjustment for 2003.

2.

Tables 1 and 2 show the financial perspective for EU-15 and the financial framework for
EU-21 at 2003 prices.

2.1.

Own resources ceiling

The Council Decision of 29 September 2000 on the system of the European Communities'
own  resources2  will  enter  into  force  once  it  has  been  ratified  by  the  Member  States'
parliaments. These ratification procedures should be completed in early 2002. The decision
will take effect on 1 January 2002 (some provisions on 1 January 2001).

This decision states that, for the purposes of its application, GNP (gross national product)
is  to  be  defined  as  GNI  (gross  national  income),  as  determined  in  accordance  with
ESA 95.3 It also states that the ceiling of own resources, expressed as a percentage of GNI,
should be adjusted in order to maintain unchanged the amount of financial resources put at
the  disposal  of  the  Communities  under  ESA  95.  In  accordance  with  this  decision,  the
Commission made this adjustment in December 2001 and communicated the result to the

1

2

3

OJ C 172, 18.6.1999, p. 1.
Council  Decision  of  29  September  2000  on  the  system  of  the  European  Communities'  own  resources
(2000/597/EC, Euratom) - OJ L 253, 7.10.2000, p.42.
Council  Regulation  (EC)  No  2223/96  of  25  June  1996  on  the  European  system  of  national  and  regional
accounts in the Community - OJ L 310, 30.11.1996.

2

                                                
budgetary authority.4 The own resources ceiling of 1.27% of GNP-15 is changed to 1.24%
of GNI-15.

For  the  purposes  of  clarity,  Tables  1  and  2  set  out  the  figures  relating  to  the  technical
adjustment  for  2003  in  line  with  both  the  ESA  (second  edition)  and  the  new  system
(ESA 95).

2.2.

Financial perspective table EU-15

The  overall  ceiling  on  appropriations 
€102 145 million, equivalent to 1.07% of GNI.

for  commitments 

for  2003  comes 

to

The  corresponding  ceiling  on  the  appropriations  for  payments  for  EU-15  comes  to
€102 767 million, i.e. 1.08 % of GNI.

Allowing for the amount available for accession, the overall ceiling on appropriations for
payments is €110 033 million (1.16% of  GNI for  EU-15),  which,  on  the  basis  of  current
economic forecasts, leaves a margin beneath the own resources ceiling of €7 849 million.

For  2000,  2001  and  2002,  the  size  of  the  margin  has  been  updated  from  the  previous
technical  adjustments  using  the  most  recent  GNI  estimates  so  that  comparisons  can  be
made  over  a  number  of  years.  On  the  other  hand,  the  ceilings  in  commitments  and
payments resulting from the adjustments made do not change.

2.3.

Financial framework EU-21

3.

4.

4

As an  estimate of GNI is not available  for each of the six  candidate  countries  taken  into
account, the GDP aggregate has been used  for them here on the basis of the most recent
figures and forecasts. The total GDP for these countries is put at €402 billion in 2003.

Table  3  presents  the  macroeconomic  parameters  used  for  this  adjustment  exercise.  They
are  based  on  data  drawn  up  by  Eurostat  and  on  the  most  recent  forecasts  made  by  the
Commission in conjunction with the national experts (budget forecasts, autumn 2001).

The figures and forecasts are based on the European System of Accounts revised in 1995
(ESA 95).

The  adjustment  is  calculated  by  applying  the  following  deflators  to  the  financial
perspective (at 1999 prices):

– 

– 

– 

A cumulative deflator of 8.243% for the period 2000-03 to the ceiling for heading 1
and  to  the  figure  for  the  Structural  Funds  in  heading 2,  in  accordance  with
paragraph 15 of the Interinstitutional Agreement (fixed rate of 2% a year).

The GNP deflator in euros for 2000-03 (8.56%) to the other ceilings (actual deflator).

In accordance with the financial perspective adopted at the Berlin European Council
in March 1999, the monetary reserve will be eliminated from 2003.

Communication from the Commission to the Council and the European Parliament - Adaptation of the ceiling
of  own  resources  and  of  the  ceiling  for  appropriations  for  commitments  following  the  entry  into  force  of
Decision 2000/597/EC, Euratom (COM(2001) 801 final of 28.12.2001).

3

                                                
As regards payments, the adjustment is based on the appropriations for payments estimated
for each heading when the financial perspective was drawn up (1999 prices). The method
of calculation is set out in the following table:

Approps for
payments 2003 at
1999 prices
(€ million)

Cumulative
deflator
2000-2002
(%)

Approps for
payments
2003 at 2003
prices
(€ million)

Appropriations  for  payments
(heading 1)

43 770

Appropriations  for  payments
(heading 2 - Structural Funds)

Appropriations  for  payments
(heading 5)

30 250

4 800

for

Approps 
payments
(heading 6)

Monetary
reserve

0

Other reserves

400

appropriations 
(heading 

for
Other 
payments 
-
Cohesion Fund - + heading 3 +
heading 4 + heading 7)

2 

15 660

8.243

47 378

8.243

32 744

8.5569

5 211

0

8.5569

8.5569

0

434

17 000

Total 
payments

appropriations 

for

94 880

102 767

As  regards  the  appropriations  for  payments  available  for  accession,  those  coming  under
heading 1  have  been  adjusted  by  means  of  a  8.243%  cumulative  deflator.  For  "other
expenditure",  a  distinction  is  made  between  payments  for  structural  operations,  to  which
the  cumulative  deflator  8.243%  is  applied,  and  payments  under  headings  3  and  5,  for
which the cumulative 8.5569% deflator has been used.

The indicative table for the financial framework for EU-21 (see Table 2) has been adjusted
in  the  same  way.  In  heading  8  (Enlargement),  the  commitment  appropriations  for
agriculture  and  structural  operations  have  been  adjusted  by  means  of  the  cumulative
8.243%  deflator  and  those  for  internal  policies  and  administration  by  means  of  the
cumulative  8.5569%  deflator.  Payments  under  heading  8  have  been  adjusted  using  the
same  method  of  calculation  as  for  the  payments  available  for  accession  in  the  financial
perspective.

4

5.

The  agricultural  guideline  has  been  calculated  in  accordance  with  Article 3  of  the  new
Council Regulation on budgetary discipline5 (see Table 4).

The figures for  sugar  and isoglucose levies,  food aid refunds and  ACP sugar  refunds  are
based  at  this  stage  on  the  amounts  entered  in  the  2002  budget.  In  accordance  with  the
Decision  on  budgetary  discipline,  the  final  level  of  these  specific  items  in  the  guideline
will be fixed when the preliminary draft 2003 budget is presented.

In 2003 the agricultural guideline is provisionally €52 177 million.6

In the case of heading 5, a footnote to the financial perspective states that the figures for
pensions  included  under  the  ceiling  for  this  heading  are  to  be  calculated  net  of  staff
contributions to the pension scheme, up to a maximum of €1 100 million (1999 prices) for
the  period  2000-06.  As  stated  in  the  Commission  communication  on  the  technical
adjustment for 2000,7 this provision should be interpreted as imposing a dual limit on the
amounts deducted from expenditure on pensions when applying the ceiling for the heading:

– 

– 

this amount may not exceed the contributions actually entered as budget revenue in
any  one  year.  For  2003  these  contributions  are  provisionally  estimated8  at
€178 million,  i.e.  €163  million  at  1999  prices  with  the  cumulative  deflator  of
8.5569% applied for the adjustment to the ceiling for the heading;

the  accumulated  total  of  deductions  for  the  period  2000-06  may  not  exceed
€1 100 million at 1999 prices, equivalent to an average of €157 million (€170 million
at 2003 prices).

As administrative expenditure is, as a rule, recurrent, the lowest limit - i.e. a maximum of
€170 million  at  current  prices  for  2003 -  should  be  adopted  each  year  to  avoid  using  a
margin at the start of the period which will no longer be fully available afterwards.

The  fifth  subparagraph  of  paragraph 10  of  the  Interinstitutional  Agreement  states  that
information relating  to  operations  not  included  in  the  general  budget  and  the  foreseeable
development  of  the  various  categories  of  own  resources  is  to  be  set  out  in  tables,  as  an
indication,  and  updated  annually  when  the  technical  adjustment  is  made  to  the  financial
perspective.

This information, updated in line with the latest estimates available, is set out in Tables 5.1
to 5.3. It covers the EDF, the ECSC operating budget and the structure of own resources.

The Commission will present to the budgetary authority its proposal for adjustments to the
financial perspective in connection with implementation under paragraphs 16 to 18 of the
for  2000  are  available
the  outturn 
Interinstitutional  Agreement  once 
(mid-February 2002).

figures 

Council Regulation (EC) No 2040/2000 of 26 September 2000, OJ L 224, 29 September 2000, p.27
A  margin  of  €2  038  million  in  relation  to  all  the  expenditure  which,  in  accordance  with  the  Regulation  on
budgetary discipline, is included under the guideline (heading 1, the "agriculture" section of the pre-accession
aid under heading 7, the amounts left available for accession in respect of agriculture.
SEC(1999)847 final, paragraph 6.
The rate of increase envisaged for 2003 for expenditure on remunerations has been applied to the amount of
contributions entered in the 2002 budget (€175 million).

5

6.

7.

8.

5

6

7

8

                                                
TABLE 1: FINANCIAL PERSPECTIVE (EU-15) - ADJUSTED TO 2003 PRICES

APPROPRIATIONS FOR COMMITMENTS
1. AGRICULTURE
CAP (not including rural development)
Rural development and accompanying measures
2. STRUCTURAL OPERATIONS
Structural Funds
Cohesion Fund
3. INTERNAL POLICIES (1)
4. EXTERNAL ACTION
5. ADMINISTRATION (2)
6. RESERVES 
Monetary reserve
Emergency aid reserve
Guarantee reserve
7. PRE-ACCESSION AID
Agriculture
Pre-accession structural instrument
PHARE (applicant countries)
TOTAL APPROPRIATIONS FOR COMMITMENTS
TOTAL APPROPRIATIONS FOR PAYMENTS
Appropriations for payments as % of GNP (ESA 79)
Appropriations for payments as % of GNI (ESA 95)
AVAILABLE FOR ACCESSION (approps for payments)
Agriculture
Other expenditure
CEILING, APPROPRIATIONS FOR PAYMENTS
Ceiling, payments as % of GNP (ESA 79)
Margin for unforeseen expenditure
Own resources ceiling
Ceiling, approps for payments as % of GNI (ESA 95)
Margin for unforeseen expenditure
Own resources ceiling

2000
41.738
37.352
4.386
32.678
30.019
2.659
6.031
4.627
4.638
906
500
203
203
3.174
529
1.058
1.587
93.792
91.322
1,10%
1,07%

91.322
1,10%
0,17%
1,27%
1,07%
0,17%
1,24%

Current prices

2001
44.530
40.035
4.495
32.720
30.005
2.715
6.272
4.735
4.776
916
500
208
208
3.240
540
1.080
1.620
97.189
94.730
1,10%
1,08%

94.730
1,10%
0,17%
1,27%
1,08%
0,16%
1,24%

2002
46.587
41.992
4.595
33.638
30.849
2.789
6.558
4.873
5.012
676
250
213
213
3.328
555
1.109
1.664
100.672
100.078
1,12%
1,10%
4.397
1.698
2.699
104.475
1,17%
0,10%
1,27%
1,15%
0,09%
1,24%

2003
47.378
42.680
4.698
33.968
31.129
2.839
6.796
4.972
5.211
434
0
217
217
3.386
564
1.129
1.693
102.145
102.767
1,10%
1,08%
7.266
2.197
5.069
110.033
1,18%
0,09%
1,27%
1,16%
0,08%
1,24%

2004
46.285
41.576
4.709
33.652
30.922
2.730
6.915
4.983
5.319
434
0
217
217
3.386
564
1.129
1.693
100.974
99.553
1,04%
1,02%
9.626
2.652
6.974
109.179
1,14%
0,13%
1,27%
1,12%
0,12%
1,24%

2003 prices
2005
45.386
40.667
4.719
33.384
30.654
2.730
7.034
4.994
5.428
434
0
217
217
3.386
564
1.129
1.693
100.046
97.659
1,00%
0,98%
12.387
3.172
9.215
110.046
1,12%
0,15%
1,27%
1,10%
0,14%
1,24%

2006
45.094
40.364
4.730
32.588
29.863
2.725
7.165
5.004
5.536
434
0
217
217
3.386
564
1.129
1.693
99.207
97.075
0,97%
0,95%
15.396
3.680
11.716
112.471
1,12%
0,15%
1,27%
1,10%
0,14%
1,24%

(1) In accordance with Article 2 of Decision 182/1999/EC of the European Parliament and of the Council and Article 2 of Council Decision 1999/64/Euratom (OJ  L 26, 1.2.1999, p. 1 and  p. 34, 
€11 510 million at current prices is available for research over the period 2000-02.
(2) The expenditure on pensions included under the ceiling for this heading is calculated net of staff contributions to the pension scheme, up to a maximum of €1 100 million at 
1999 prices for the period 2000-06.

6

TABLE 2: FINANCIAL FRAMEWORK (EU-21) - ADJUSTED TO 2003 PRICES

APPROPRIATIONS FOR COMMITMENTS
1. AGRICULTURE
CAP (not including rural development)
Rural development and accompanying measures
2. STRUCTURAL OPERATIONS
Structural Funds
Cohesion Fund
3. INTERNAL POLICIES (1)
4. EXTERNAL ACTION
5. ADMINISTRATION (2)
6. RESERVES 
Monetary reserve
Emergency aid reserve
Guarantee reserve
7. PRE-ACCESSION AID
Agriculture
Pre-accession structural instrument
PHARE (applicant countries)
8. ENLARGEMENT
Agriculture
Structural operations
Internal policies
Administration
TOTAL APPROPRIATIONS FOR COMMITMENTS
TOTAL APPROPRIATIONS FOR PAYMENTS
Ceiling, payments as % of GNP (ESA 79)
Margin for unforeseen expenditure
Own resources ceiling
Ceiling, payments as % of GNI (ESA 95)
Margin for unforeseen expenditure
Own resources ceiling

2000
41.738
37.352
4.386
32.678
30.019
2.659
6.031
4.627
4.638
906
500
203
203
3.174
529
1.058
1.587

93.792
91.322
1,10%
0,17%
1,27%
1,07%
0,17%
1,24%

Current prices

2001
44.530
40.035
4.495
32.720
30.005
2.715
6.272
4.735
4.776
916
500
208
208
3.240
540
1.080
1.620

97.189
94.730
1,10%
0,17%
1,27%
1,08%
0,16%
1,24%

2002
46.587
41.992
4.595
33.638
30.849
2.789
6.558
4.873
5.012
676
250
213
213
3.328
555
1.109
1.664
6.851
1.698
3.980
778
395
107.523
104.475
1,13%
0,14%
1,27%
1,10%
0,14%
1,24%

2003
47.378
42.680
4.698
33.968
31.129
2.839
6.796
4.972
5.211
434
0
217
217
3.386
564
1.129
1.693
9.778
2.197
6.311
825
445
111.923
110.033
1,13%
0,14%
1,27%
1,11%
0,13%
1,24%

2004
46.285
41.576
4.709
33.684
30.954
2.730
6.915
4.983
5.319
434
0
217
217
3.386
564
1.129
1.693
12.572
2.652
8.573
858
489
113.578
109.179
1,09%
0,18%
1,27%
1,07%
0,17%
1,24%

2003 prices
2005
45.386
40.667
4.719
33.438
30.708
2.730
7.034
4.994
5.428
434
0
217
217
3.386
564
1.129
1.693
15.375
3.172
10.824
890
489
115.475
110.046
1,08%
0,19%
1,27%
1,06%
0,18%
1,24%

2006
45.094
40.364
4.730
32.650
29.925
2.725
7.165
5.004
5.536
434
0
217
217
3.386
564
1.129
1.693
18.168
3.680
13.076
923
489
117.437
112.471
1,07%
0,20%
1,27%
1,05%
0,19%
1,24%

(1) In accordance with Article 2 of Decision 182/1999/EC of the European Parliament and of the Council and Article 2 of Council Decision 1999/64/Euratom (OJ  L 26, 
1.2.1999, p. 1 and  p. 34, €11 510 million at current prices is available for research over the period 2000-02.
(2) The expenditure on pensions included under the ceiling for this heading is calculated net of staff contributions to the pension scheme, up to a maximum of €1 100 million 
at 1999 prices for the period 2000-06.

7

TABLE 3: GNP - FIGURES AND FORECASTS (EU-15)

Real growth rate (%)

   -Adjustment for 2000

   -Adjustment for 2001

   -Adjustment for 2002

   -Adjustment for 2003

GNP deflator in euros (%)

   -Adjustment for 2000

   -Adjustment for 2001

   -Adjustment for 2002

   -Adjustment for 2003

GNP at current prices (EUR billion) ESA 79

   -Adjustment for 2000

   -Adjustment for 2001

   -Adjustment for 2002

   -Adjustment for 2003

GNI at current prices (EUR billion) ESA 95
   -Adjustment for 2003

2000

2001

2002

2003

2,7

3,1

3,3

3,4

1,7

2

2,7

2,9

3

3,1

1,7

1,8

1,8

1,7

3,1

1,2

2

2

2,9

1,7

8058,5

8138,6

8533,3

8275,0

8333,2

8682,5

8621,1

9127,3

8908,7

9320,2

8501,2

8794,3

9087,4

9506,6

Comparison between deflator in national currency and 
deflator in euros

Deflators in national currency (weighted average)

Deflators in euros

2000

2001

2002

2003

1,5%

2,9%

2,3%

1,7%

2,1%

2,0%

1,8%

1,7%

8

 Table 4: CALCULATION OF THE AGRICULTURAL GUIDELINE FOR 2003

€ million

2003

BASE EXPENDITURE (1995 budget)

36.394

ANNUAL GNP GROWTH RATE

1996
1997
1998
1999
2000
2001
2002
2003

1,70%
2,70%
2,90%
2,60%
3,40%
1,70%
1,20%
2,90%

Cumulative growth rate
74% of cumulative growth rate
CORRECTED EXPENDITURE (1995 prices)

20,75%
15,36%

41.983

GNP DEFLATOR

1996
1997
1998
1999
2000
2001
2002
2003

3,40%
2,70%
1,80%
2,40%
2,90%
1,70%
2,00%
1,70%

Cumulative growth rate
CORRECTED EXPENDITURE (2003 prices)

20,17%

50.451

Plus
Estimated needs (*) for 

   - sugar and isoglucose levy
   - food aid refunds
   - ACP sugar refunds
   - Subtotal

AGRICULTURAL GUIDELINE

(*) See 2002 budget

9

1000
24
702
1726

52.177

 
 
TABLE 5: INDICATIVE PROGRAMME OF EXPENDITURE NOT ENTERED IN THE GENERAL BUDET AND PROSPECTIVE TREND IN 
THE VARIOUS OWN RESOURCES

5.1.  EUROPEAN DEVELOPMENT FUND (1)

Decisions (D) and Payments (P)
EUR million - current prices
2000

2001

2002

TOTAL

D
3757

P
1548

D
1600

P
1988

D
2100

P
2345

(1)  Commission communication COM (2001) 780 final of 17.12.01.

5.2. ECSC OPERATING BUDGET
EUR million - current prices
2001
191

2000
135

2002 (1)
152

(1) ECSC Treaty expires on 23 July 2002.

2003

D
2780

P
2500

2004

D
3050

P
2700

2005

D
2900

P
2900

2006

D
2700

P
3000

5.3. OWN RESOURCES BY CATEGORY

% of total
Traditional own resources
VAT
GNP

2000: Budget
2001: Budget (SAB 3/2001)
2002: Budget (Own Resources Decision 
         2000)
2003-2006: Estimate

2000
17
40
43

2001
19
38
43

2002
14
25
61

2003
12
23
65

2004
12
13
75

2005
12
13
75

2006
12
13
75

10