# **B. OUTLINE OF THE FINANCIAL ENVELOPE**

The EU has committed € 4.6 bn in 2004 prices in commitment appropriations to Bulgaria for the period 2007-2009, as presented in Table 1.<sup>2</sup> The financial envelope is based on the Financial Package for Bulgaria and Romania, published in a European Commission Communication of February 10, 2004 and updated in the rural development allocations part.<sup>3</sup> Committed resources to Bulgaria are classified in three categories: policy-oriented expenditures; administrative expenditures; and budget compensation. Resources for Structural Actions for the first three years of accession comprise almost a half of EU commitments to Bulgaria, while resources for Common Agricultural Policy (CAP) and Internal Policies are 38% and 11% of total commitments, respectively.

**Table 1: Financial Package for Bulgaria, € millions, 2004 prices**

|**Appropriations for Commitments**|**2007**|**2008**|**2009**|**2007-2009**|
|---|---|---|---|---|
|**_Common Agricultural Policy_**|||||
|Marketmeasures|132|129|127|388|
|Direct payments|0|198|233|431|
|Ruraldevelopment|231|312|397|940|
|TotalCAP|363|639|757|1759|
|**_Structural Actions_**<sup>**_1)_**</sup>|||||
|Structural Funds|311|438|577|1326|
|Cohesion Fund|180|253|334|767|
|TotalStructural Actions|491|691|911|2093|
|**_Internal Policies_**|||||
|Existing policies|88|89|91|268|
|Nuclearsafety|70|70|70|210|
|Institutionbuilding<sup>_2)_</sup>|10|7|3|20|
|Total Internal Policies|168|166|164|498|
|**_Administration_**<sup>_3)_</sup>|||||
|**_Compensation_**|122|59|59|240|
|**Total Commitment Appropriations**|1144|1555|1891|4590|

_Source_ : Financial Package for Bulgaria and Romania, indicative allocations 2007-2009 based on Commission Communication of 10 February 2004 and EU Accession Treaty for Bulgaria and Romania of April 2005.

_Notes:_<sup>_1)_</sup> The Accession Treaty was negotiated on the basis of the 2000-06 acquis, where rural development is financed under two funding sources: the EAGGF(European Agricultural Guidance and Guarantee Fund) Guarantee Section, and the EAGGF Guidance Section (as part of the Structural Funds). Future rural development allocations for the 2007-13 period will all be financed from a single fund, the new European Agricultural Fund for Rural Development (EAFRD), but they are derived from the two 2000-06 funding sources. Thus we have subtracted the funds available under the EAGGF Guidance from the Structural Funds and added them to the resources available for Rural development.<sup>_2)_</sup> Institution building appropriations for commitments are calculated on the basis of a population key for Bulgaria and Romania. _3)_ No administrative costs are specifically allocated for Bulgaria. Therefore, no commitment and payment appropriations under this heading are included.

2 Although the EU financial framework for 2007-2013 is yet to be determined, the European Council meeting in Thessaloniki has indicated that negotiations on the Financial Package for Bulgaria and Romania can be carried out. However, this package might be adapted to reflect policy reforms or overall changes to the financial perspectives for 2007-2013. For Bulgaria and Romania, the Financial Package is limited to a period of three years after their accession (2007-2009), following the same approach and phasing-in rules for structural actions and rural development as for the ten new EU members of 2004.

3 Rural development allocations figures are based on the Accession Treaty for Bulgaria and Romania.

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