The European parliament is the most democratic and representative institute in the European Union. In the early years of the European Integration, the EP just played a consultative role. Not until the Treaty of Luxembourg and Treaty of Brussels were signed in 1970 and 1975, was the EP given the last word on what is known as non-compulsory expenditure and the power to reject the budget as a whole. Based on democracy and legitimacy, the first elected EP made efforts to extend its budgetary influence by taking advantage of the ambiguity of some budgetary provisions of the treaties. The rejections of the budget by the EP in 80’s brought about the budgetary crisis of the European Union. In 1988, the first Multi-annual Financial Framework was introduced by the Inter-Institutional Agreement to overcome budgetary crisis in the EU. Since then, five Multi-annual Financial Frameworks have come into practice. The power of purse of the EP given by the treaties has still remained unchanged for the past four decades. The five Multiannual Financial Frameworks did enhance the budgetary influence of the EP. But they also reduced the legal budgetary power of the EP and deepened its democratic deficit in the process of the European Integration.