The annual budgetary procedure as established by the Treaty of Lisbon is laid down in Article 314 of the Treaty on the Functioning of the European Union.
According to the procedure, all EU institutions draw up their estimates for the draft budget according to their internal procedures before 1 July each year. The Commission consolidates these estimates and establishes the annual draft budget, which is submitted to Parliament and the Council not later than 1 September.
The Council adopts its position on the draft budget and forwards it to Parliament before 1 October. The Council informs Parliament of the reasons which led it to adopt its position.
Parliament has 42 days either to approve the position of the Council, or, by a majority of its component members, to amend it. The plenary vote takes place in the October-II part-session in Strasbourg.
If Parliament has adopted any amendment, the amended text is forwarded to the Council, and the President of Parliament, in agreement with the President of the Council, immediately convenes a meeting of the Conciliation Committee. The Committee does not meet if the Council informs Parliament within ten days that is has approved all its amendments.
The Conciliation Committee, composed of members of the Council or their representatives and an equal number of members representing Parliament, has 21 days to reach an agreement on a joint text.
If the Conciliation Committee agrees on a joint text, that text is submitted to Parliament and the Council for approval within 14 days. The plenary vote on the joint text takes place in the November-II part-session in Strasbourg.
When the procedure has been completed, the President of Parliament declares that the budget has been definitively adopted.
If the conciliation procedure fails, or if the joint text is rejected by Parliament, the Commission submits a new draft budget. If the joint text is rejected by the Council whilst Parliament approves it, Parliament may decide to confirm all or some of the amendments it adopted in the October plenary. Where an amendment is not confirmed, the position agreed in the Conciliation Committee is retained, and the budget is deemed to be adopted on that basis.