Economics

The European Commission has put across elaborate ways of ensuring transparency and control of budget expenditure throughout all European Community members. This boosts the concerned budgetary authorities such as the European Parliament and the European Council to effectively monitor the realization of annual budget.  The budget control is further broken down to monthly reports where the monthly expenditures incurred and the corresponding revenues are made available to the commission. The guideline specifies the information to be made available within a period not exceeding ten days after the end of each month. The European Union members have restricted the expenditure to avoid circumstances where the community would resort to borrowing to cover its expenditure. This has been affected by the union drawing a ceiling which limits expenditure by law and agreement. The use of multi annual framework underlines the allowable expenditure for each sector and their appropriate allocations,

On the expenditure side there are eight main areas commonly captured in the budget. These are given priority on the level of their significance it the integration and its sustenance. Agriculture tops the list of highest prioritized sector this sector accounts to close the half of the commissions expenditure budget. The emphasis given to agricultural sector is in no doubt a clear indication of the commissions commitment in ensuring sustainability in food production for its population. This is closely followed closely by structural actions. Other activities in that  receive quite a significant amount of expenditure are internal policies, administration, external actions, pre-accession strategy, compensation and least on the line is reserves which receives the lowest amount of budgetary allocation

In 2006 for example, agriculture accounted for approximately 46  of total expenditure. This amounted to a total cost of over 49.biollion Euros. The structure actions also had a significant allocation from the commission which accounted to over 30  of total budgetary expenditure. In monetary terms, structural actions amounted to over 32 billion euros.  On the other hand, internal policies that were aimed at covering the welfare of the Unions population accounted for about 8  of the total budget expenditure. These internal policies includes among other policies like, information, youth, media, culture, energy among others at a cost of close to 9 billion Euros. Other initiatives such as administration accounted for close to 6  (6 billion), external actions 4  ( 5 billion), pre-accession strategy 2  (2 billion), compensations 1  (1 billion) and reserves less than 1 which accounted to close to 100 million Euros.

On 17th may 2007, three parties that constituted the European parliament, the council, and the commission adopted a financial framework 2007-2013. This is a seven year framework and is intended to cater for the enlarged union in the matters of budgetary discipline, financial management. Under the framework, the three institutions prioritized their agreement on the following matters. First, integration of member states into a single market with a broader aim of achieving a sustainable growth. Through gathering of economic, social and environmental policies. Second, offering more essence towards the ideology of European citizenship. This will be achieved by fulfilling the equitability of freedom, justice, security and easing access to primary goods and services to all members of the community. Thirdly, establishment of a consistent responsibility for the union in the global arena. This is aimed at emphasizing the responsibility the region has in ensuring the world attains a sustainable development. The union also puts in its shoulders the duty of making a significant contribution towards civilian and strategic security. The estimated budget expenditures on the above named three ventures are represented in the figure below

However on September 2007, a revision was carried out on the framework which was aimed at meeting additional financing requirement at a total of 309 million Euros for an establishment of European Institute of Technology and another 2.4 billion Euros for Navigation satellite system Galileo. This framework saw its adoption on 18th of December 2007 and it covers a period of seven months. By the year 2004 the following plans were envisaged in reforming the budget procedure. This included the establishment of multiannual financial framework, the creation of a distinction between compulsory expenditure and non-compulsory expenditure. The council and the parliament under the new changes were to have the mandate of examining the budget proposals presented to it by the commission.

In summary, the expenditure of revenue collected by the European Union is decided trough a competitive process whereby the representatives from the parliament makes a choice from the proposals submitted to them. Money is allocated to projects that deal with training of the members on new skills. Projects that stimulate business growth as a way of innovating and creating jobs, and others that contributes to safeguarding of environment.