81/97 11 July 1997
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STATEMENT ON THE 1997 COMMUNITY BUDGET:
EUROPEAN COMMUNITY FINANCES
The Government today publishes its Annual Statement on the
European Community Budget, entitled "European Community
Finances". The Statement gives details of the 1997 Community
Budget, including:
- the adoption of the 1997 Budget at 82,370 million ecu
(60,727 million Pounds) of payments in 1997, or 1.17% of
Community GNP (well within the Own Resources ceiling of
1.24%);
- a limit on commitments to future expenditure entered into
in 1997 of 89,142 million ecu (65,719 million Pounds); and
- information about the UK's contributions to, and receipts
from, the Community Budget.
As in previous years, the Statement outlines developments in EC
financial management and in countering fraud against the
Community budget. The key issues are:-
- the acceptance by the InterGovernmental Conference of a
number of UK proposals for the Amsterdam Treaty aimed at
improved financial management, particularly on the powers
of the European Court of Auditors;
- criticism by the Council and the European Parliament of the
failure of Community expenditure to meet the standards of
propriety set by the European Court of Auditors; and
- further evidence from the Commission and an Inquiry by the
European Parliament of the implication of organised
criminal gangs in fraud against Community income,
particularly through the transit system for temporary
suspension of customs duties.
Notes for Editors
1. The Commission adopted its Preliminary Draft Budget for
1998 on 10 June 1997. This amounts to 91,307 million ecu (64,057
million Pounds) in commitments, and 84,727 million ecu (59,441
million Pounds) in payments, or 1.15% of total EU GNP. This is
within the financial perspective ceilings agreed at the Edinburgh
European Council, and well within the Own Resources ceiling of
1.26% of Community GNP for 1998.
2. GLOSSARY OF TERMS
Commitment and payment appropriations
The Budget distinguishes between appropriations for
commitments and appropriations for payments. Commitment
appropriations are the total cost of legal obligations which
can be entered into during the current financial year for
activities which will lead to payments in the current and
future financial years. Payment appropriations are the amount
of money which is available to be spent during the year
arising from commitments in the Budgets for the current or
preceding years. Unused payment appropriations may, in
exceptional circumstances, be carried forward into the
following year.
Own Resources
The Own Resources Decision lays down four sources of Community
revenue, or "own resources":
Agricultural and sugar levies. Agricultural levies are
charged on a range of agricultural products imported to the
Community from non-member countries. Following the GATT
Uruguay Round Agreement on agriculture, most agricultural
levies are now fixed, although for some key commodities they
continue to vary in line with world prices. Sugar levies are
charged on the production and sale of sugar.
Customs duties on trade with non-member countries;
Contributions based on VAT. Essentially, this is the amount
yielded by applying a notional rate of VAT to an identical
range of goods and services in each Member State. Member
States' contributions are, however, subject to a cap relating
to size of their Gross National Products.
GNP-based contributions. This resource is calculated by
taking the same proportion of each Member State's Gross
National Product (GNP). It is a budget-balancing resource and
covers, basically, the difference between total expenditure in
the budget and the revenue from the other three resources
3. Copies of the White Paper are available, on request,
from the Treasury Press Office.
4. If you have access to the Internet you can find this
information at "http://www.hm-treasury.gov.uk". Material on
other Treasury matters can also be found at this address.