What is European Union budget?
The [[European Union]] (EU) has an independent [[European Parliament|parliament]] and civil service which is distinct from those of the 27 member states. It has to pay for [[expenditure]] on common policies throughout the EU. Therefore, the EU has an agreed [[budget]] of €862 billion for the period 2007-2013. By comparison, the UK expenditure for 2004 alone was estimated at €759 billion. ==Setting a budget== The EU has three elements to its government: the [[Council of the European Union|Council of Ministers]], the [[European Commission]] and the [[European Parliament]]. All three take a part in setting the annual budget. ==Revenue== [[File:EUrevenuesources2004.png|thumb|300px|Sources of EU revenue 2004]] The EU obtains most of its [[:wikt:revenue|revenue]] indirectly by payments from treasuries of member states. [[Revenue]] is divided into three categories. '''Traditional own resources''' are taxes raised on behalf of the EU as a whole, principally import duties on goods brought into the EU. These are collected by the state where import occurs and passed on to the EU. States are allowed to keep a proportion of the revenue to cover administration. '''VAT based own resources''' are taxes on EU citizens as a proportion of [[Value added tax]] in each member country. VAT rates and exemptions vary in different countries, so a formula is used to create the 'harmonised tax base'. The starting point for calculations is the total VAT raised in a country. '''GNI based own resources''' currently forms the largest contribution to EU funding. A simple multiplier is applied to the calculated GNI for the country concerned. Revenue is currently capped at 1.24% of GNI for the EU as a whole. ==Expenditure== [[File:EUexpenditure2004.png|thumb|300px|EU expenditure 2004]] The largest single expenditure item is the [[Common Agricultural Policy]] (CAP) at around 45% of the total budget. The second largest element is the [[European Union Regional policy|regional policy]], at 30%. [[Foreign policy]] consumes 8%, administration 6%,