THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to the Interinstitutional Agreement of 6 May 1999 between the European Parliament, the Council and the Commission on budgetary discipline and improvement of the budgetary procedure (1), and in particular to points 19, 20 and 21 thereof,
Having regard to Decision 2003/430/EC of the European Parliament and of the Council of 19 May 2003 on the revision of the financial perspective (2),
Having regard to the proposal from the Commission,
Acting in accordance with the procedure laid down in the fifth subparagraph of Article 272(9) of the Treaty (3),
Whereas:
The reform of the common agricultural policy adopted by the Council in September 2003 (4) provides for a reduction in direct payments (modulation) to finance rural development policy to achieve a better balance between policy tools designed to promote sustainable agriculture and those designed to promote rural development and to finance additional rural development measures. The financial perspective set out in Annex I to the Interinstitutional Agreement on budgetary discipline and improvement of the budgetary procedure as revised by Decision 2003/430/EC hereinafter referred to as the ‘financial perspective’, should therefore be modified to take into account the effect of ‘modulation’ for the year 2006. As a consequence, commitment appropriations from subheading 1a ‘Common agricultural policy’ can be used to finance additional measures under subheading 1b ‘Rural development’, with no change in the ceiling of heading 1 ‘Agriculture’,
HAVE DECIDED AS FOLLOWS:

The financial perspective is revised as follows:
The annual ceilings for appropriations for commitments in heading 1 of table 1a, table 1b, table 2a and table 2b shall be amended as follows:

(a) the figure for the subheading 1a ‘Common agricultural policy’ shall be reduced in 2006 by the amount corresponding to the modulation;
Reduced amounts in common agricultural policy
2006
EUR million at 1999 prices
– 570
EUR million at 2006 prices
– 655
(b) the figure for the subheading 1b ‘Rural development’ shall be increased in 2006 by the amount corresponding to the modulation;
Increased amounts in rural development
2006
EUR million at 1999 prices
+ 570
EUR million at 2006 prices
+ 655

1. The financial perspective for the European Union, in 1999 prices, is set out in tables 1a and 1b in the Annex.

2. The corresponding financial perspective resulting from the technical adjustment for 2005, in line with movements in gross national income (GNI) and prices, is set out in tables 2a and 2b in the Annex.

This decision shall be published in the Official Journal of the European Union.