EU budget 2004: a historic budget for the year of enlargement, Brussels, 18 December 2003

Today, the European Parliament adopted the EU budget for 2004 with a large majority. The figures formally adopted cover the EU 15, but political agreement on the figures for the enlarged Union for the period after May 2004 has already been reached. For 25 Member States, the budget stands, at under 1% of EU Gross National Income (GNI). Budget Commissioner Michaele Schreyer welcomed the result "The budget for 2004 is historic, it is the first for the enlarged Union, and the first in the new activity based format. And it is at a historically low level, which proves that worries about enlargement exploding the budget have been wrong. But it is also clear that, despite budgetary rigour, we have to meet expectations and obligations as the expenditures for the new member states are gradually being phased in. "Commissioner Schreyer thanked the European Parliament and Council for their excellent co-operation, especially the rapporteurs Mulder and Gill and chairman Wynn. "The budget 2004 is an example of how excellent cooperation between the institutions, inside the Council and in the EU can be."

The total volume of the budget to be financed for EU 25 is € 99 724 billion. The EU budget for 2004 is at 0.98% of EU Gross National income, and leaves € 11.8 billion below the maximum amount for payments originally planned by the financial perspective. The growth of 2.3% caters for enlargement with 10 new member states and covers existing priorities and major new programmes.

New programmes financed

The first priority for 2004 is of course enlargement. The administrative preparations for enlargement are in full swing, and additional human resources for the Commission of 780 posts have been granted. Recruitment of nationals from the new EU Member States is underway.

Among the items covered for the first time figure specifically enlargement related programmes such as the protection of the external borders through the so-called Schengen facility and nuclear safety for new member states. All existing programmes will be open to new member states from 1 May onwards according to the same criteria as for the existing member states. For enlargement, some € 11.8billion is available for starting new programmes (commitment appropriations).

For new needs, the budget successfully contributes the remaining € 160 million to make up the € 200 million pledged for reconstruction in Iraq in the years 2003-4. The flexibility instrument contributes € 95 million, thus exceeding the existing ceiling for the budget for external affairs thanks to this instrument available for unforeseen events.

The Common Foreign and Security Policy budget caters for two police missions, the continuation in Bosnia and Herzogovina and the new action in the former Yugoslav Republic of Macedonia, affirming the importance of security and stability. This chapter shows a strong increase of more than 30% compared to 2003.

Existing priorities consolidated

The budget for the EU-15, € 94.6 billion in payments, covers expenditure for agriculture, the structural funds, internal and external policies. This represents a decrease of 3% over the budget plan 2003 for the EU-15. It is mainly due to the end of the pre 1999 structural funds and reduced needs for agriculture in 2004 due, in part, to bringing forward expenditure for the drought in summer 2003.

New priorities have been financed without reducing existing priorities in the external aid sector, with an overall increase of 4.36% over 2003, excluding Iraq, or 7.6% for the external sector as a whole.

Pre-accession aid will continue to cover Romania and Bulgaria (€ 780 million) and Turkey (€ 250 million), all of which have seen strong increases compared to previous years.

For agriculture the amount for the EU 25 will be 46.78 billion, or € 2.5 billion less than the maximum planned. For the Cohesion Fund € 5.68 billion will be available, and another € 35.3 billion for the structural funds. For research the envelope in 2004 represents € 4.8 billion, and € 778 million can be used for the Trans-European Networks.

The new activity based budgeting format shows the total costs in terms of administrative and operational resources of each policy area, as can be seen from the table below.

An Amending budget to be adopted in February 2004 will allow the figures to be changed to the amounts for 25 member states already agreed. This should be adopted without discussions in April, just in time for enlargement.