Financial Outlook
The Financial Outlook is a political framework established by the (so-called inter-institutional) agreement concluded by member states, the Parliament and the Commission, which specifies the ceiling of budgetary commitment appropriations at current prices and broken down according to chapters (5 chapters in the present case in accordance with the Commission’s proposal). The maximum rate of commitments defined in the Financial Outlook according to chapter must not be exceeded in the course of the regular annual budgetary planning procedure.
The debate on the budgetary frameworks of the enlarged EU primarily defines Community policies, as well as potential to implement all initiatives and objectives in the 2007-2013 period requiring co-financing.
Concurrently to the debate on financial frameworks, the debate on draft legislation regulating matters concerning use set out in specific chapters of the Financial Outlook is currently taking place in the competent forums of the Council (Council Work Teams). However, these can only be approved following the approval of the agreement defining the financial frameworks. Practically speaking, responses to the question „How Much” are being sought in the debate on the financial outlook, whilst response to the questions „Under what conditions” and „How” are being sought in the debate defining the operational frameworks of specific sub-chapters.
Naturally there is a connection as regards financial matters, since the chapters constitute the pillars of the financial outlook, which is why it is also necessary to define the objectives and basic principles of the specific chapters in compliance with the basic principles and objectives of the financial outlook (increasing the level of employment, sustainable development, security, making the EU a decisive political and economic factor, etc.)
In the Bulletin issued in connection with the general frameworks and basic principles of the financial outlook, the European Commission put forth proposals for the 2007-2013 budgetary period – in compliance with the Commission proposal of 10 February 2004 – in accordance with the following criteria:
In order to satisfy the basic principles of the financial outlook, it is necessary to particularly prioritise the efficient operation of the internal market, implementation of the Lisbon Strategy, conservation of natural values, environmental protection and food safety criteria, fighting organised crime and illegal immigration in order to protect citizens, the uniform external profile of the area with a population of 450 million inhabitants vis-à-vis contacts with third countries. These objectives can only be implemented at a European level, which the common budget must reflect as well.
According to the Commission, funding needs must be concentrated in areas where European-level action proves more effective than national intervention. Therefore, the Commission’s proposal focuses on areas in which
- European level action compensates for lack of contacts (transport, energy, R+D, services, etc.);
- Community level approach is also justified in terms of economy of scale, or due to cross-border characteristics (external border protection, environmental protection, education, etc.);
- It is only possible to establish synergy between objectives defined at EU level and specific action through joint action (cohesion, rural development).