BUDGET: 2004 PRELIMINARY DRAFT KEEPS WITHIN CEILING FOR INCREASE IN SPENDING.

• Position: European Union budget

At Euro 100.6 billion, the volume of payment appropriations proposed by the Commission for the enlarged EU in 2004 shows a moderate increase of just 3.3% over the 2003 Budget, which covers only the current 15 Member States. This relatively small rise is due to the fact that the volume of expenditure for EU-15 is expected to drop by 2%. Estimated expenditure for the 10 new Member States in 2004 comes to Euro 5 billion. The Preliminary Draft is far lower - by Euro 10.9 billion - than the ceiling agreed for 2004.

Commitment appropriations - i.e. the maximum level for the EU's financial commitments in the 2004 financial year - come to Euro 112.2 billion for the enlarged Union; of this total, Euro 11.8 billion is for the new Member States. For the EU-15, there will be no more than a very modest increase of 0.7% to Euro 100.3 billion in 2004. The total amount leaves a margin of Euro 3.4 billion under the ceiling for 2004.

Farm budget.

Total requirements for the EU-15 under Heading 1 (Agriculture) come to Euro 45.8 billion, of which Euro 4.8 billion is projected for rural development (2.2% up on 2003). The estimate for the new Member States comes to Euro 2 billion, 1.7 billion of which is destined for rural development. The amount for market expenditure in the new Member States is relatively low as direct aid will not have an impact until 2005. The increases in the Preliminary Draft for EU-15 are due in particular to expenditure on arable crops, on the one hand because of the situation on the cereals market and on the other hand because 2003 is an exceptional year as payments had been brought forward to the previous year because of the floods. In 2004 the mid-term review of the Common Agricultural Policy in the animal feed and milk sectors will start to have an effect on the farm budget but the greatest impact is not expected until 2005. The Commission will present the latest estimates for farm spending in a letter of amendment in October.

Structural measures.

The volume of commitment appropriations for Heading 2 (Structural measures) shows an increase of 20.8% for the enlarged Union compared with the 2003 figure for fifteen Member States. Euro 6.7 billion is planned for the new Member States in accordance with the decisions adopted at Copenhagen. Expenditure (payment appropriations) on the Structural Funds comes to Euro 30.68 billion for the enlarged Union, 7.5% less than in the 2003 Budget. This significant drop is due to the fact that the...