EU BUDGET: COMMISSION PROPOSES STRICT BUDGET FOR 2005.

Agriculture.

Total requirements for the EU-25 under heading 1 come to Euro 50.7 billion, of which Euro 6.8 billion is projected for rural development (15% more, the largest increase). The estimate for the new Member States comes to Euro 3.6 billion, of which Euro 1.9 billion is for rural development. The amount for market and veterinary expenditure in the new Member States has substantially increased but is still relatively low as direct aid is being phased in. This is the first year for the payment of direct aids to the new Member States. The increases (+ Euro 4.42 billion in payments) are due in particular to enlargement (Euro 2.1 billion), but also the exchange rate between the Euro and the US Dollar (1 Euro = $1.25), which entails supplementary costs of Euro 240 million. Additionally, the CAP reform will add Euro 1.3 billion in 2005. The bulk of the rest of the increase is explained by a return to normal conditions after the drought in Summer 2003 (Euro 400 million). The Commission will present the latest estimates for farm spending in a letter of amendment in October 2004.

Structural measures.

The volume of commitment appropriations for the Structural Funds (heading 2) shows an increase of 3.3% for the enlarged Union. Out of a total of Euro 42.4 billion, 7.7 billion will be allocated to the new Member States. Expenditure (payment appropriations) on the Structural Funds comes to Euro 35.4 billion for the enlarged EU, 14.8% more than in the 2004 Budget. This significant increase is mainly due to the doubling of the amount to be spent in the new Member States. Cohesion Fund expenditure is lower for both old and new Member States, following the terms of the agreement reached in Copenhagen and Ireland's loss of eligibility for the Cohesion Fund.

Internal policies.

Compared to the increases in the two categories described above the levels of estimates for internal policies (Heading 3) in 2005 are relatively stable. Total commitment appropriations are put at Euro 8.95 billion, with payment appropriations at Euro 7.7 billion, an increase of 2.8%. Euro 5 billion in commitment appropriations is available for expenditure on research. This shows that support for the Lisbon objectives will continue to be given a high priority in the enlarged EU. Education and culture, also of key importance for competitiveness, are slated to receive Euro 885 million.

The concept of safety and protection will get financial support in the energy and transport area...