The financial perspective forms the framework for Community expenditure over a period of several years. It is the product of an interinstitutional agreement between the European Parliament, the Council and the Commission and indicates the maximum volume and the composition of the foreseeable Community expenditure. It is adjusted annually by the Commission to take account of prices and the development of Community GNP. However, it should be noted that the financial perspective is not a multiannual budget since the annual budgetary procedure remains essential to determine the actual amount of expenditure and the breakdown between the different budget headings.
To date, four interinstitutional agreements of this type have been concluded, the first in 1988, the second in 1992, the third in 1999, and the fourth in 2006:
- the 1988-92 financial perspective (Delors I package);
- the 1993-99 financial perspective (Delors II package);
- the 2000-06 financial perspective;
- the 2007-13 financial perspective.
This multiannual financial framework is intended to ensure that expenditure develops in an orderly fashion, always remaining within the limits of the Union's own resources. It places a ceiling on annual expenditure in the Union's major spheres of activity for a period of at least five years.