Compulsory and non-compulsory expenditure

Before the Lisbon Treaty Community expenditure was divided into two types.

“Compulsory Expenditure” (CE)

Compulsory expenditure is “expenditure necessarily resulting from the Treaty or from acts adopted in accordance with it”. They mainly comprise agricultural spending, expenditure resulting from international agreements and pensions paid to European civil servants. The Council of Ministers has the final word on “compulsory expenditure” that represents around one third of all expenditure.

“Non-compulsory” Expenditure (NCE)

“Non-compulsory” expenditure applies to all other expenditure. The European Parliament has the final word with regard to “non-compulsory” expenditure.
Whilst this represented less than 5% of expenditure in 1970 it now represents nearly 2/3 of all spending.

Suppression of the CE/NCE

The Lisbon Treaty suppresses the distinction between the CE/NCE which enhances the powers of the European Parliament with regard to the budget since it now has the right to decision that is almost equal to that of the Council.

Further information

For more information on compulsory expenditure see annex III of the inter-institutional agreement of 19th May 2006.
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For more information on the exact amounts used in compulsory and non-compulsory expenditure, consult the general draft budget 2009.
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