An introduction to the EU's Multi-annual
The EU's Multi-annual Financial Framework (MFF) sets out spending ceilings for each policy category or "heading". The MFF, also known as the "Financial Perspectives"), helps to ensure that EU funding is spent in an orderly fashion. It also limits overall spending to a percentage of EU Gross National Income (GNI).
Currently overall annual expenditure must not exceed 1.23% of EU GNI. However, this limit has never yet been reached.
The EU's annual budgets are currently divided into five spending categories, called headings:
1. Sustainable Growth
1A: Competitiveness for Growth and Employment
1B: Cohesion for Growth and Employment
(This heading includes regional policy)
2. Preservation and Management of Natural Resources
(This heading includes agriculture and environment)
3. Citizenship, Freedom, Security and Justice
3A: Freedom, Security and Justice
4. EU as a global player
When budgets are being discussed within the EU institutions, one often hears, for example, "heading 4" or "H4", rather than "foreign affairs budget". Each heading is divided into "budget lines", each of which can be drawn upon for a specific purpose.