Where does the EU get its money from, how does it decide about its budget and who benefits the most? We examine the EU's budget procedure and focus in on the European Parliament's changed role in it.

How It Works: EU Budget

How does the EU allocate the   European budget to the different sectors

and what role does   the European Parliament play in this?

The budget of the EU is composed   of contributions by the Member States

and represents roughly one percent   of the EU's GDP.

It is spent on policies and in areas   deemed common to all interests.

Most money goes now   to regional and cohesion policies,

50 billion euros per year, aimed at poorer   and disadvantaged parts of Europe

Cohesion has overtaken   the historically biggest budget post,

the Common Agricultural and Fisheries   Policy which at 42% still has a large slice.

Only with the coming into effect   of the Lisbon Treaty

has the European Parliament   gained a say about how this part is spent.

The Parliament can now talk about pretty   much all of the expenditure of the EU

and has to decide whether   it agrees with the annual budget or not.

At the same time, the Treaty has   streamlined the EP's budget procedure.

The time given to the Council   and the Parliament

the number of readings cut   from two to only one.

However, behind the annual budget   there is a strategic long-term one,

laying out the priorities   for a seven-year period.

Negotiations on the one for 2014-2021   have just begun.

Here the EP's role hasn't been so clearly   strengthened, as our expert explains.

One important new addition   in the Treaty is that

the multi-annual financial framework   will continue if no agreement is found.

There it will be difficult for   the Parliament to make its mark.

It really has to come together   as an institution

and have a strong, powerful opinion,   to be able to influence

what, in the end, is still mostly   a competence of the Member States.

So the EP is included in negotiations   on the framework, but has to find its role.

On the annual budget it now   has a say on almost all expenditure