The financing of military and civilian crisis management operations has been an important issue since the outset of European security and defence policy ESDP. It has also proved to be particularly important in the context of specific ESDP operations such as the EU police mission in Bosnia-Herzegovina, the EU's military monitoring and stabilisation mission in the Former Yugoslav Republic of Macedonia and the EU's military assistance mission in the Democratic Republic of the Congo. The importance of an appropriate financing mechanism in each case has derived from the need for the EU to be able to respond effectively to operational requirements, while at the same ensuring that the proper budgetary checks and balances are maintained.
The legal base for expenditure which is laid down in Title V of the Treaty on European Union makes a distinction between administrative expenditure and operational expenditure. Article 28 of the treaty states that operational expenditure having military or defence implications may not be charged to the Community budget. Instead, and unless the Council unanimously decides otherwise, such expenditure shall be charged to the member states in accordance with the GNP scale. Article 28(3) of the Treaty on European Union provides that constructively abstaining member states making a formal declaration under article 23(1) of the treaty shall not be obliged to contribute to the financing of an operation.
In the case of the EU police mission in Bosnia-Herzegovina and the forthcoming EU police mission in FYROM, and in accordance with the treaty, common costs are being met out of the European Commission-administered budget for the common Foreign and Security Policy. To date, costs of mission allowances for participating personnel have fallen to be met by the respective sending states.