The EU's 'financial perspective' defines the framework for the Community's budget priorities over a seven-year period. It describes under different budget headings the maximum amounts (ceilings) of commitment appropriations (financial commitments) for each year. It is not a fixed multi-annual budget per se. The annual budget procedure still determines the actual level of expenditure and the breakdown between the various budget headings. For a description of the decision making procedure for the outline of the financial perspective please click here.  

There have been four financial perspectives to date: 

• The 1988-1992 financial perspective (Delors I package);
• The 1993-1999 financial perspective (Delors II package);
• The 2000-2006 financial perspective (Agenda 2000).
• The 2007-2013 financial perspective

Structure of the EU Financial Framework 2007-2013

The financial perspective is divided into six "headings":

1. Sustainable growth
2. Preservation and Management of natural resources
3. Citizenship, Freedom, Security and justice.
4. The European Union as a global partner (relates to development co-operation)
5. Administration
6. Compensation

Heading 1 (Sustainable growth) is divided into two distinct, but interconnected components:

(1a) Competitiveness for growth and employment, covering expenditure on research and innovation, education and training, EU networks, the internal market and accompanying policies.

(1b) Cohesion for growth and employment, designed to enhance convergence of the least developed Member States and regions, to complement the EU strategy for sustainable development outside the less prosperous regions and to support inter-regional co-operation.

Heading 2 (Preservation and management of natural resources) includes the common agricultural and fisheries policies, rural development and environmental measures, in particular Natura 2000. The amount earmarked for the Common Agricultural Policy (CAP) reflects the agreement reached in October 2002 at the European Council.

Heading 3 (Citizenship, freedom, security and justice) is new, and reflects the growing importance attached to certain areas where the Union has expanded its competences - justice and home affairs, border protection, immigration and asylum policy, public health and consumer protection, culture, youth, information and dialogue with citizens. Heading 3 also covers the EU's Solidarity and Rapid Reaction Fund.

Heading 4 (The European Union as a global partner) encompasses all external action, including pre-accession instruments, integration of the European Development Fund (EDF) into the general budget and the current reserves for emergency aid and loan guarantees.

Heading 5 (Administration) covers expenditure for institutions other than the Commission, pensions and the European Schools. Commission administrative expenditure is to be included directly under the relevant operational headings, as part of a new approach in line with the rationale of activity-based management, which already forms the basis for establishing the annual budget. The new presentation allows the budgetary authority to discuss and vote on the operational and administrative appropriations for each policy area simultaneously.