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The European Parliament and the Council of the European Union together constitute the Union’s budgetary authority, which decides each year on its expenditure and revenue. The procedure of examining, then adopting, the budget takes place between May and December.
With the entry into force of the Lisbon Treaty, the Parliament became a true co-legislator for the EU's entire annual budget, deciding on it in close collaboration with the Council.
The European Parliament and the Council must adhere to the annual spending limits laid down in the multiannual financial perspective.
How is the budget adopted?
The principle of ‘annuality’ of the budget means that the budget is adopted for one year (the budget year begins on 1 January and ends on 31 December).
The Commission prepares a draft budget, which it submits to the Council and to the Parliament.
On this basis the Council adopts its position, which it forwards to the European Parliament.
Parliament adopts its position in the light of its political priorities..If the Parliament approves Council's position or declines to state a position the budget is deemed adopted; but normally the Parliament adopts amendments and the amended draft budget is referred back to Council and Commission and the EP President convenes a meeting of the Conciliation Committee.
The Conciliation Committee is assigned to come up with a joint text within 21 days; if the representatives of the Council and of the Parliament cannot agree on a joint text, then a new draft budget must be submitted by the Commission.
If the Conciliation Committee agrees on a joint text, Parliament and Council have 14 days to approve the joint text.
It is the President of the European Parliament who finally signs the budget.
How is oversight over the budget maintained?
The Committee on Budgetary Control monitors the Union’s expenditure on a permanent basis.
The European Parliament, on a recommendation from the Council of the European Union, decides on giving the discharge to the Commission for the implementation of the budget (annual discharge procedure extending normally from November to April).