The European Union Budget

The first EU budget was drafted in 1988 under the so-called “Delors Package I.” Its budgetary headings and monetary distribution have remained unchanged until 14th July 2004, when the Commission adjusted its traditional model to a new system of headings to adapt the budget to an evolutionary economical environment. The budget of the European Union distinguishes itself from other international bodies by its exclusive system of the so-called “own resources.” This system is composed of the revenues obtained by (1) the Common Customs duties collected under the external tariff; (2) the levies in imported agricultural products; (3) the Value Added Tax revenue; and (4) the Gross National Income based resources. The EU budget sets out and authorizes the total amount of revenues and expenditures annually deemed necessary by the European Community and the European Atomic Energy Community. However, the EU budget is a seven-year multi-annual spending plan articulated around a ¨financial framework¨ that ensures the control of the evolution of the budget expenditure. The budget is drafted and implemented under the ¨Financial Programming and Budget¨ Directorate General and is supervised by the European Parliament and the Court of Auditors. The EU budget not only rests on the three basic accounting principles: unity, annuality and balance, which guarantee its economic efficiency, but also on the composition of its revenues, the so-called “own resources.”