VIII - Financial, economic, social and other internal affairs

Summary

The EU budget

A brief history of the EU budget

The rules governing the adoption of the EU budget have been modified a number of times. Originally, the 1957 Rome Treaty gave budgetary power exclusively to the Council (Article 203 of the original EEC Treaty). The European Parliament progressively obtained more powers.

For nearly thirty-five years, the procedure for the adoption of the annual budget has always respected the following lines: the European Parliament and the Council are seized by a draft budget tabled by the Commission. The procedure is subject to a timetable fixed by the Treaty. The budget is to be approved by the Council and to be finally decided by the European Parliament. The Council votes by a QMV specific to cases where the Council does not act on the basis of a proposal from the Commission, but on the basis of another act (a draft, a recommendation, etc.). In such situations, unanimity is not required in the Council to change the proposal of the Commission (Article 250(1) TEC). Since the early 1970s, the European Parliament had obtained a right of codecision, and even the last word on so-called ‘non-compulsory’ expenditure. For its part, the Council kept the last word on the so-called ‘compulsory’ expenditure (mainly for the common agriculture policy).

On this basis, in the early years of the EC the negotiations between the European Parliament and the Council, or rather the fights about powers more than about figures, were taking place annually in lengthy sessions which frequently lasted overnight.