BUDGET COUNCIL: JULY 20 SESSION TO FOCUS ON 2002 DRAFT BUDGET.

Commission preliminary draft budget.The EU preliminary draft budget (PDB) for 2002 was presented by the European Commission on May 8 (see European Report 2591 for further details). It consists of Euro 100,328.28 million in commitment appropriations (CA - including 95,179.61 million for operational expenditure) and 97,770.98 million in payment appropriations (PA - including Euro 92,622.31 million for operational expenditure). In relation to the 2001 budget, these sums represent a 3.5% increase in commitment appropriations and 4.3% for payment appropriations (maximum rate of increase of 3.5%). Total payment appropriations in the PDB correspond to 1.06% of EU GDP. The PDB also includes a provisional sum for institutions other than the Commission, resulting in an overall increase in PDB credits of Euro 35.96 million for both commitments and payments, and yielding a rectified PDB amounting to Euro 100,364.23 million in CA and 97,806.93 in PA (with Euro 43,343.20 and 43,415.31 respectively for compulsory expenditure - and Euro 57,021.03 and 54,391.62 in non-compulsory expenditure). The PDB was drafted in accordance with the financial perspective ceilings for 2000-2006. It outlines the six priority objectives for 2002 retained by the Commission (Euro, sustainable development, the Mediterranean, enlargement and new governance).For heading 1 of the financial perspectives (common agricultural policy), the PDB proposals provide for a 5% increase in expenditure on 2001. For market spending, a Euro 1 billion reserve is included in the budget to address the consequences of the BSE and foot and mouth crises. On heading 2 of the financial perspectives (structural actions), the APB provides in accordance with the conclusions of the Berlin European Council for the complete budgeting of heading 2, set aside to this end in the financial perspectives and as adapted in May 2001. Regarding heading 3 of the financial perspectives (internal policies), 4/5 of credits are pre-determined in the context of multi-annual programmes decided in co-decision, credits for research representing 2/3 of heading 3 (a margin of Euro 67.97 million being left under the heading 3 ceiling). And heading 4 of the financial perspectives (external actions), the PDB sets out a cut in CA in relation to 2001 due to the mobilisation in 2001 of the flexibility instrument of Euro 200 million under this Heading. Euro 35 million is proposed for CFSP credits, leaving a margin of Euro 47.22...