Budgetary Power

It has been via the budget that the European Parliament has progressively won a certain number of major competences.

Hence in 1970, the le Luxembourg Treaty gave the European Parliament the power to amend the budget. It introduced the system of “own resources”: the European Communities were to receive a share of customs duties, VAT and agricultural taxes from the Member States.

In 1975, the Brussels Treatygranted the European Parliament the right to adopt the European budget definitively ; it also strengthened its power to amend by establishing the distinction between «  compulsory expenditure and non-compulsory expenditure.” .

Since 2009 and the entry into force of the Lisbon Treaty, this distinction into two categories has been abolished, which strengthens the European Parliament’s budgetary power.


Adoption of the Budget

The European Parliament shares the budgetary power with the Council of Ministers these two institutions comprise the European Union’s “budgetary authority“. They decide what the European Union will spend for the year. These have to be established within the limits established by the ” multiannual financial perspective “, or the “pluriannual financial framework”; this is established for 7 years via an inter-institutional agreement. Parliament is not however able to intervene with regard to the total amount contained within this financial framework.
In 2023, the European Union’s budget was 168,6 billion euros in payment appropriations (down by 1.1% in comparison with 2022) and 182.7 billion euro in commitment appropriations (up by 1.6% in comparison with 2022).
The next EU multi-annual financial framework for the period 2021-2027 has not yet been adopted by the Parliament and the Council because major differences in opinion remain amongst the Member States. The European Commission hopes to achieve an agreement in principle before the European elections of May 2019.

The EU’s multiannual financial framework for the period 2021-2027 was adopted by the Parliament and the Council in December 2020. A revision procedure was opened by the Commission in June 2023 to deal with unanticipated demands arising from the war in Ukraine. The European Parliament and the Council are due to adopt the preliminary draft budget drawn up by the European Commission. The special legislative procedure in force is based on the ordinary legislative procedure and therefore gives roughly equal power to the Parliament, but requires a strong internal political consensus. The procedure is limited to a single reading per institution and the timetable is tight. A conciliation committee is convened if agreement cannot be reached.

The European Parliament has no powers to set the overall volume of the Community budget.

The  president of European Parliament finalises the procedure by confirming that the budget has finally been adopted.


Budgetary Control

By way of its Committee on Budgetary control (« Cocobu »), the European Parliament controls how the European Commission uses community funds.
At the end of each budgetary year (1st January to 31st December each year), the European Commission presents a report on how it has used community funds to the European Parliament. The European Parliament then decides on the recommendation of the Council of Ministers to grant, to adjourn or to refuse the Commission the “budgetary discharge” for its execution of the community budget. This procedure enables the completion of the budgetary year.
It is the threat of not granting the discharge in 1999 because of a lack of transparency in the Commission’s management that initiated the process whereby Jacques Santer’s Commission resigned collectively.