European framework

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European Integration

What is the EU’s Financial Framework today? What is its future? Is there a next step in the common market? Could Europe recover from the economic crisis, increase its influence and credibility in the world economic hierarchy? Each issue depends on the desire of every country to involve in EU context. It’s not easy to think about the future today, but EU wants to react.Indeed, the European Budget is considered as a “relic from another age” but EU is decided to change this image.
We will try to answer these above questions in several parts. Firstly, by explaining what is the actual budget, secondly by explaining the future changes in the budget structures, thanks to Lisbon Treaty and finally we will discuss the negotiation of 2014/2020. The attitude of Francetoward the reform process will be presented, this country being a big contributor and thus having an important weight in the negotiation.

In order to understand the new issues of the EU, we have to master how the budget is departed. The European Framework is a tool really important in this time of economic crisis. When European Union wants to increase its international presence and improve itscompetitiveness, the repartition of this European budget become increasingly important. The European budget is governed by three main « own resources » made available by the member state ( Ali M. Agraa: 2001)
* TOR (Common Customs Tariff duties and Agricultural levies, and other minor revenues): It represents customs duty perceived by third-country imports and taxes on imports of agriculturalproducts covered by the Common Agricultural Policy. Over the twenty last years, this trend decrease. In 1988 the part was 28%, in 2010 it was 12% and in 2013 it will be 13%.
* VAT (Value added tax) element represents the application of a uniform percentage rate to the VAT assessment base. Again, this part trends down significantly. In 1988 it was the most important resource with 57% of thebudget. In 2010 it was 11% and the EU provides for a share of 12%.
* GNP element is the application of a rate to a base representing the sum of member states’ Gross National Product at market prices. It’s now the most important share in the budget. According to the EU, each part is calculated proportionally according to the wealth of the member country. In 1988 this part was 11%, in 2010 it was 76%and for 2013 it will be 74%.
* The last 1% of the budget is represented by the taxes paid by EU staff, contributions from third countries to certain community programs and fines for businesses which violated the rules of competition or other laws.
In value, the EU budget represents 141,4 billion euro in 2010 and will be 142,6 billion euro in 2012. It’s an important budget in value but inreality it is about 2% of the total EU public expenditures. It is the source of periodic political crises but also a stabilizing factor for the development of the European Union, established since the 80’s in different successive financial executives. Over this period, the budget increased in real terms but its size relative to GNI fell even though the Union has enlarged and taken on new politicalresponsibilities. The budget’s repartition is based on rules and has a special role in the EU community. The aim is the expenditure realised by the EU must be more effective for the citizen than if the member do it alone. The budget cannot be unbalanced. The expenditures have to follow some criterion:
* Special expenditures: they are intended for a specific purpose and cannot be used for otherpurposes. Each credit is assigned to a specific expenditure
* Annuality: the budget is voted for one year and must take into account take into account the programs planned for several years’ interventions.
* Balance
* Every decision has to be published in the Official Newspaper of the EU. It’s the principle of transparency.
The spending is limited by treaty and multiannual...
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