61986CO0023_EN
Parties
Subject of the case
Grounds
Operative part
Parties
IN CASE 23/86 R,
UNITED KINGDOM, REPRESENTED BY ITS AGENT MR T . J . G . PRATT, TREASURY SOLICITOR, ASSISTED BY MR FRANCIS JACOBS, QUEEN ' S COUNSEL, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE BRITISH EMBASSY, 28 BOULEVARD ROYAL,
APPLICANT,
V
EUROPEAN PARLIAMENT, REPRESENTED BY ITS AGENT, MR F . PASETTI-BOMBARDELLA, JURISCONSULT,
DEFENDANT,
Subject of the case
APPLICATION PRIMARILY FOR AN INTERIM ORDER WHICH, ON THE ONE HAND, WOULD AUTHORIZE THE APPLICANT AND THE OTHER MEMBER STATES OF THE COMMUNITY TO MAKE PAYMENTS LIMITED TO SUCH AMOUNTS AS RESULT FROM THE COUNCIL ' S SECOND READING OF THE BUDGET ON 26 AND 27 SEPTEMBER 1985, AND TO ABATE THE FIRST PAYMENT FOLLOWING THE SAID ORDER BY THE AMOUNT OF ANY OVERPAYMENT ALREADY MADE AND, ON THE OTHER HAND, WOULD DIRECT THE COMMISSION TO IMPLEMENT THE GENERAL BUDGET FOR 1986 ON THE BASIS OF THE DRAFT BUDGET ESTABLISHED BY THE COUNCIL AT THE SECOND READING SUBJECT TO CERTAIN AMENDMENTS ADOPTED ON 12 DECEMBER 1985 BY THE EUROPEAN PARLIAMENT WHICH DID NOT HAVE THE EFFECT OF INCREASING NON-COMPULSORY EXPENDITURE .
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 29 JANUARY 1986 THE UNITED KINGDOM BROUGHT AN ACTION PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY, THE FIRST PARAGRAPH OF ARTICLE 146 OF THE EAEC TREATY AND ARTICLE 38 OF THE ECSC TREATY FOR THE ANNULMENT OF THE ACT WHEREBY THE PRESIDENT OF THE EUROPEAN PARLIAMENT DECLARED, ON 18 DECEMBER 1985, THE FINAL ADOPTION OF THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES ( OFFICIAL JOURNAL, L 358, P . 1 ). BY THE SAME ACTION THE UNITED KINGDOM ALSO SEEKS THE ANNULMENT OF THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES FOR THE FINANCIAL YEAR 1986 AS SO ADOPTED ( OFFICIAL JOURNAL, L 358, P . 3 ) BUT ONLY IN SO FAR AS IT EXCEEDS THE AMOUNTS RESULTING FROM THE DRAFT BUDGET ESTABLISHED BY THE COUNCIL ON 27 NOVEMBER 1985 AT THE SECOND READING AS AMENDED BY CERTAIN AMENDMENTS VOTED ON 12 DECEMBER 1985 BY THE EUROPEAN PARLIAMENT . THOSE AMENDMENTS DID NOT HAVE THE EFFECT OF INCREASING NON-COMPULSORY EXPENDITURE SINCE THE INCREASES FOR WHICH THEY PROVIDED FOR CERTAIN BUDGET LINES WERE OFFSET BY EQUIVALENT REDUCTIONS WHICH THEY MADE ON OTHER BUDGET LINES . THE AMENDMENTS IN QUESTION ARE THOSE MADE BY WAY OF TRANSFER FROM BUDGET LINES B 660 TO THE NEW LINES B 6615, 6616, 6617 AND TO LINE 6632 AND FROM LINE B 944 TO LINE A 1 100 . IN THE ALTERNATIVE, THE COURT IS REQUESTED TO ANNUL THOSE TWO ACTS IN THEIR ENTIRETY .
2 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 13 FEBRUARY 1986 THE APPLICANT REQUESTED THE COURT, PURSUANT TO ARTICLES 185 AND 186 OF THE EEC TREATY, ARTICLES 157 AND 158 OF THE EAEC TREATY AND ARTICLE 39 OF THE ECSC TREATY AND TO ARTICLE 83 OF THE RULES OF PROCEDURE OF THE COURT, TO GRANT AN INTERIM ORDER, PENDING FINAL JUDGMENT IN THE MAIN ACTION, THAT THE MEMBER STATES SHOULD MAKE PAYMENTS IN RESPECT OF VAT OWN RESOURCES FOR THE 1986 BUDGET LIMITED TO SUCH AMOUNTS AS RESULTED FROM THE COUNCIL ' S SECOND READING OF THE BUDGET ON 26 AND 27 NOVEMBER 1985, NAMELY ON THE BASIS OF AN INCREASE OF 1 251 MILLION ECU IN RESPECT OF NON-COMPULSORY PAYMENT APPROPRIATIONS AND OF 1 199 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS OVER THE 1985 BASE AND SHOULD ABATE THE FIRST PAYMENT FOLLOWING THE ISSUE OF THIS ORDER BY THE AMOUNT OF ANY OVERPAYMENT ALREADY MADE . THE ORDER WOULD ALSO DIRECT THE COMMISSION TO IMPLEMENT THE BUDGET BOTH IN RESPECT OF PAYMENT APPROPRIATIONS AND IN RESPECT OF COMMITMENT APPROPRIATIONS ON THE BASIS OF THE DRAFT BUDGET ESTABLISHED AT THE COUNCIL ' S SECOND READING SUBJECT TO THE ABOVE-MENTIONED AMENDMENTS .
3 BY A LETTER DATED 25 FEBRUARY 1986 THE PRESIDENT OF THE COURT REQUESTED THE COMMISSION, PURSUANT TO ARTICLE 21 ( 2 ) OF THE PROTOCOL ON THE STATUTE OF THE COURT, TO ATTEND THE HEARING ON 10 MARCH 1986 AND TO BE REPRESENTED BY ONE OR MORE OF ITS OFFICIALS HAVING SPECIFIC KNOWLEDGE OF BUDGETARY MATTERS SO THAT HE COULD OBTAIN ALL SUCH INFORMATION RELATING TO THE BUDGET AND ITS IMPLEMENTATION AS HE MIGHT CONSIDER NECESSARY FOR THE PURPOSES OF THE EXAMINATION OF THE PRESENT APPLICATION FOR INTERIM MEASURES .
4 BY A TELEX MESSAGE DATED 5 MARCH 1986 THE PRESIDENT OF THE COURT PUT QUESTIONS TO THE UNITED KINGDOM, THE EUROPEAN PARLIAMENT AND THE COMMISSION AND INVITED THEM TO SUBMIT THEIR REPLIES AT THE HEARING ON 10 MARCH 1986 .
5 THE DEFENDANT SUBMITTED WRITTEN OBSERVATIONS ON 28 FEBRUARY 1986 . THE PARTIES PRESENTED ORAL ARGUMENT ON 10 MARCH 1986 .
6 BEFORE CONSIDERING THE MERITS OF THE PRESENT APPLICATION FOR INTERIM MEASURES IT IS APPROPRIATE TO RECALL, FROM THE POINT OF VIEW OF THE NON-COMPULSORY EXPENDITURE AT THE CENTRE OF THIS DISPUTE, THE VARIOUS STAGES IN THE BUDGETARY PROCEDURE WHICH PRECEDED THE FINAL ADOPTION BY THE PRESIDENT OF THE EUROPEAN PARLIAMENT, ON 18 DECEMBER 1985, OF THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES FOR THE FINANCIAL YEAR 1986 . THE TREATY PROVISIONS IN QUESTION ARE THOSE GOVERNING THE COURSE OF THE BUDGETARY PROCEDURE FOR NON-COMPULSORY EXPENDITURE, NAMELY ARTICLES 203 OF THE EEC TREATY, 177 OF THE EAEC TREATY AND 78 OF THE ECSC TREATY . SINCE THOSE THREE PROVISIONS LAY DOWN AN IDENTICAL BUDGETARY PROCEDURE FOR NON-COMPULSORY EXPENDITURE, REFERENCE WILL BE MADE IN THIS ORDER, IN THE INTERESTS OF CLARITY, ONLY TO ARTICLE 203 OF THE EEC TREATY, AND IN PARTICULAR TO PARAGRAPH ( 9 ) THEREOF .
7 THE EFFECT OF ARTICLE 203 OF THE EEC TREATY IS TO GIVE THE PARLIAMENT AND THE COUNCIL THE POWER TO ADOPT THE BUDGET, SUBJECT TO THE APPLICATION OF THE MECHANISM OF THE MAXIMUM RATE OF INCREASE FOR NON-COMPULSORY EXPENDITURE WHICH IS DESCRIBED IN PARAGRAPH ( 9 ) OF THAT ARTICLE . PARAGRAPH ( 9 ) IS WORDED AS FOLLOWS :
' A MAXIMUM RATE OF INCREASE IN RELATION TO THE EXPENDITURE OF THE SAME TYPE TO BE INCURRED DURING THE CURRENT YEAR SHALL BE FIXED ANNUALLY FOR THE TOTAL EXPENDITURE OTHER THAN THAT NECESSARILY RESULTING FROM THIS TREATY OR FROM ACTS ADOPTED IN ACCORDANCE THEREWITH .
THE COMMISSION SHALL, AFTER CONSULTING THE ECONOMIC POLICY COMMITTEE, DECLARE THAT THIS MAXIMUM RATE IS AS IT RESULTS FROM :
( I ) THE TREND, IN TERMS OF VOLUME, OF THE GROSS NATIONAL PRODUCT WITHIN THE COMMUNITY ;
( II)THE AVERAGE VARIATION IN THE BUDGETS OF THE MEMBER STATES ;
AND
( III)THE TREND OF THE COST OF LIVING DURING THE PRECEDING FINANCIAL YEAR .
THE MAXIMUM RATE SHALL BE COMMUNICATED, BEFORE 1 MAY, TO ALL THE INSTITUTIONS OF THE COMMUNITY . THE LATTER SHALL BE REQUIRED TO CONFORM TO THIS DURING THE BUDGETARY PROCEDURE, SUBJECT TO THE PROVISIONS OF THE FOURTH AND FIFTH SUBPARAGRAPHS OF THIS PARAGRAPH .
IF, IN RESPECT OF EXPENDITURE OTHER THAN THAT NECESSARILY RESULTING FROM THIS TREATY OR FROM ACTS ADOPTED IN ACCORDANCE THEREWITH, THE ACTUAL RATE OF INCREASE IN THE DRAFT BUDGET, ESTABLISHED BY THE COUNCIL IS OVER HALF THE MAXIMUM RATE, THE ASSEMBLY MAY, EXERCISING ITS RIGHT OF AMENDMENT, FURTHER INCREASE THE TOTAL AMOUNT OF THAT EXPENDITURE TO A LIMIT NOT EXCEEDING HALF THE MAXIMUM RATE .
WHERE THE ASSEMBLY, THE COUNCIL OR THE COMMISSION CONSIDER THAT THE ACTIVITIES OF THE COMMUNITIES REQUIRE THAT THE RATE DETERMINED ACCORDING TO THE PROCEDURE LAID DOWN IN THIS PARAGRAPH SHOULD BE EXCEEDED, ANOTHER RATE MAY BE FIXED BY AGREEMENT BETWEEN THE COUNCIL, ACTING BY A QUALIFIED MAJORITY, AND THE ASSEMBLY, ACTING BY A MAJORITY OF ITS MEMBERS AND THREE-FIFTHS OF THE VOTES CAST . '
8 IN CONFORMITY WITH THE THIRD SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY THE COUNCIL WAS INFORMED BY THE COMMISSION ON 23 APRIL 1985 THAT THE MAXIMUM RATE OF INCREASE IN RESPECT OF NON-COMPULSORY EXPENDITURE RELATING TO THE 1986 BUDGET WAS 7.1% .
9 ON THE BASIS OF THE NON-COMPULSORY EXPENDITURE OF THE SAME TYPE CONTAINED ON THE 1985 BUDGET THE COMMISSION ALSO STATED THAT THE APPLICATION OF THE MAXIMUM RATE OF 7.1% WOULD MAKE IT POSSIBLE TO INCREASE PAYMENT APPROPRIATIONS BY 435 MILLION ECU AND COMMITMENT APPROPRIATIONS BY 589 MILLION ECU . THE COUNCIL, REFERRING TO ANOTHER BASE NOT ACCEPTED BY THE PARLIAMENT, ARRIVED AT AMOUNTS SMALLER BY TWO MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND SEVEN MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS .
10 THE COMMISSION COMMUNICATED TO THE COUNCIL THE PRELIMINARY DRAFT BUDGET FOR 1986 ON 31 JULY 1985 . THE COUNCIL ACCORDINGLY ESTABLISHED AT ITS MEETING OF 17 AND 18 SEPTEMBER 1985 A DRAFT BUDGET WHICH PROVIDED FOR 430 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 578 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS ; THIS CORRESPONDED TO INCREASES OF 7.04% AND 7.05% RESPECTIVELY OVER THE 1985 BASE .
11 THE EUROPEAN PARLIAMENT ' S MARGIN FOR MANOEUVRE UNDER THE FOURTH SUBPARAGRAPH OF ARTICLE 203 ( 9 ) WAS, ACCORDING TO THE CALCULATION MADE BY THE COMMISSION IN ITS PRELIMINARY DRAFT BUDGET, 217 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 294 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS . THE MAXIMUM POSSIBLE INCREASE IN NON-COMPULSORY EXPENDITURE IN COMPARISON WITH 1985 WAS THEREFORE 647 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 872 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS .
12 THE AMENDMENTS MADE BY THE PARLIAMENT TO THE COUNCIL ' S DRAFT BUDGET ON 14 NOVEMBER 1985 LARGELY EXCEEDED THAT MAXIMUM LIMIT SINCE THEY PROVIDED FOR AN INCREASE, AS REGARDS NON-COMPULSORY EXPENDITURE, OF 1 784 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 1 735 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS .
13 AT ITS SECOND READING OF THE BUDGET ON 26 AND 27 NOVEMBER 1985 THE COUNCIL DECIDED TO INCREASE NON-COMPULSORY EXPENDITURE BY 1 251 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND BY 1 199 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS OVER THE CORRESPONDING 1985 BASES . THAT PROPOSAL, WHICH THE COUNCIL MADE UNCONDITIONALLY, THUS INVOLVED THE ESTABLISHMENT OF NEW MAXIMUM RATES OF INCREASE : 20.5% IN RESPECT OF PAYMENT APPROPRIATIONS AND 14.6% IN RESPECT OF COMMITMENT APPROPRIATIONS .
14 AT THE LAST RECONCILIATION MEETING WHICH IT HELD ON 11 AND 12 DECEMBER 1985 WITH THE EUROPEAN PARLIAMENT IN AN ATTEMPT TO ARRIVE AT AN AGREEMENT ON THAT NEW MAXIMUM RATE, THE COUNCIL PROPOSED THAT THE AMOUNT OF NON-COMPULSORY EXPENDITURE BE FURTHER INCREASED BY 242 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 196 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS, AS COMPARED WITH THE AMOUNTS SHOWN IN THE DRAFT BUDGET WHICH IT HAD ADOPTED AT THE SECOND READING . IT EXPRESSLY STATED, MOREOVER, THAT THAT PROPOSAL WAS MADE SUBJECT TO ITS ACCEPTANCE BY THE PARLIAMENT . AS THE PARLIAMENT REJECTED THE PROPOSAL, THE COUNCIL WITHDREW IT AND REVERTED FORMALLY TO ITS PROPOSAL FOR A MAXIMUM RATE CONTAINED IN THE SECOND READING OF THE BUDGET .
15 ON 12 DECEMBER 1985 THE PARLIAMENT ADOPTED THE AMENDMENT TO INCREASE, IN COMPARISON WITH THE SECOND READING OF THE BUDGET, THE PAYMENT APPROPRIATIONS AND THE COMMITMENT APPROPRIATIONS RELATING TO THE NON-COMPULSORY EXPENDITURE BY ADDITIONAL SUMS OF 563 MILLION ECU AND 402 MILLION ECU RESPECTIVELY, WHICH IMPLIED A MAXIMUM RATE OF INCREASE OF 29.7% IN RESPECT OF PAYMENT APPROPRIATIONS AND 19.5% IN RESPECT OF COMMITMENT APPROPRIATIONS . FURTHERMORE, THE PARLIAMENT ADDED 15 MILLION ECU BY WAY OF PAYMENT APPROPRIATIONS AND 20 MILLION ECU BY WAY OF COMMITMENT APPROPRIATIONS TO THE LINES CLASSIFIED AS COMPULSORY EXPENDITURE .
16 THE BUDGETARY PROCEDURE DESCRIBED ABOVE WAS CLOSED BY THE FINAL ADOPTION, ON 18 DECEMBER 1985, BY THE PRESIDENT OF THE EUROPEAN PARLIAMENT OF THE GENERAL BUDGET OF THE COMMUNITIES FOR THE FINANCIAL YEAR 1986 . THAT BUDGET, COMPARED WITH THE SAME BASES FOR 1985, PROVIDES FOR AN INCREASE IN NON-COMPULSORY EXPENDITURE OF 1 814 MILLION ECU IN RESPECT OF PAYMENT APPROPRIATIONS AND 1 601 MILLION ECU IN RESPECT OF COMMITMENT APPROPRIATIONS .
17 THE APPLICANT TAKES THE VIEW THAT, WHATEVER MAY BE THE BASIS ADOPTED FOR THE 1985 BUDGET, THE INCREASE IN NON-COMPULSORY EXPENDITURE RESULTING FROM THE VOTE OF THE EUROPEAN PARLIAMENT OF 12 DECEMBER 1985 PLAINLY EXCEEDS THE MAXIMUM RATE PRESCRIBED BY THE FOURTH SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY AND REQUESTS, SO THAT THIS ALLEGED ILLEGALITY MAY BE REMEDIED, THE GRANT OF INTERIM RELIEF IN THE TERMS SET OUT IN PARAGRAPH 2 OF THIS ORDER .
18 ACCORDING TO THE TERMS OF ARTICLE 186 OF THE EEC TREATY AND TO THE CORRESPONDING PROVISIONS OF THE ECSC TREATY AND THE EAEC TREATY, NAMELY ARTICLE 39 ( 3 ) OF THE FORMER AND ARTICLE 158 OF THE LATTER, THE COURT OF JUSTICE MAY IN ANY CASES BEFORE IT PRESCRIBE ANY NECESSARY INTERIM MEASURES .
19 IN ORDER FOR INTERIM MEASURES SUCH AS THOSE REQUESTED IN THIS CASE TO BE GRANTED, ARTICLE 83 ( 2 ) OF THE RULES OF PROCEDURE REQUIRES THAT APPLICATIONS FOR SUCH MEASURES SHOULD STATE THE CIRCUMSTANCES GIVING RISE TO URGENCY AND THE FACTUAL AND LEGAL GROUNDS ESTABLISHING A PRIMA FACIE CASE FOR THE INTERIM MEASURES APPLIED FOR .
20 BEFORE CONSIDERING THE ARGUMENTS PUT FORWARD BY THE APPLICANT WHICH IN ITS CONTENTION ESTABLISH THAT ITS APPLICATION FOR INTERIM RELIEF SATISFIES THE CONDITIONS FOR THE GRANT OF INTERIM MEASURES, IT SEEMS APPROPRIATE TO COMMENT ON TWO PROBLEMS RAISED BY THE PARLIAMENT WHICH RELATE TO THE ISSUE OF ADMISSIBILITY .
21 IT SHOULD FIRST BE POINTED OUT THAT ACCORDING TO A CONSISTENT LINE OF DECISIONS OF THE COURT ( SEE IN PARTICULAR THE ORDER IN CASE 75/72 R, PERINCIOLO V COUNCIL ( 1972 ) ECR 1201, AND THE ORDER IN CASE 186/80 R, SUSS V COMMISSION ( 1980 ) ECR 3501 ) THE ISSUE OF THE ADMISSIBILITY OF THE MAIN APPLICATION CANNOT BE EXAMINED IN PROCEEDINGS RELATING TO AN APPLICATION FOR INTERIM MEASURES . THAT IS A MATTER WHICH MUST BE RESERVED FOR THE EXAMINATION OF THE MAIN APPLICATION . THE DOUBTS EXPRESSED BY THE PARLIAMENT ON THE ADMISSIBILITY OF THE MAIN APPLICATION IN CASE 23/86 WILL THEREFORE NOT BE DEALT WITH IN THE CONTEXT OF THE PRESENT APPLICATION FOR INTERIM MEASURES .
22 AS REGARDS THE EUROPEAN PARLIAMENT ' S ARGUMENT TO THE EFFECT THAT THE APPLICATION FOR INTERIM MEASURES IS NOT ADMISSIBLE SINCE IT WAS NOT ADDRESSED TO THE INSTITUTION ACTUALLY CONCERNED, AND THAT IN ADDITION IT IS INAPPROPRIATE SINCE THE MEMBER STATES COULD ALWAYS, AS THEY DID IN CASE 48/81, FEDERAL REPUBLIC OF GERMANY V COMMISSION ( CASE SETTLED BEFORE JUDGMENT ), BRING AN ACTION, EVEN BY WAY OF AN APPLICATION FOR INTERIM RELIEF, AGAINST THE COMMISSION ' S CALL UPON THEM FOR ADDITIONAL FUNDS, IT MUST BE STATED THAT, AS THE APPLICANT MAINTAINS, THAT ARGUMENT CANNOT BE UPHELD .
23 IT IS SUFFICIENT TO POINT OUT, WITHOUT THERE BEING ANY NEED TO CONSIDER THE SUBSTANCE OF THIS PROBLEM, THAT PRIMA FACIE WHAT IS AT ISSUE IN THESE PROCEEDINGS IS NOT THE COMMISSION ' S INTERPRETATION OR INCORRECT IMPLEMENTATION OF THE BUDGET FOR THE FINANCIAL YEAR 1986, BUT ALLEGED ILLEGAL ACTS ON THE PART OF THE PARLIAMENT AS REGARDS NON-COMPULSORY EXPENDITURE IN THE ADOPTION OF THAT BUDGET . FURTHERMORE, AS THE APPLICANT HAS RIGHTLY SUBMITTED, IF IT IS WHOLLY CONCEIVABLE THAT AN INTERIM ORDER SUSPENDING THE IMPLEMENTATION OF A COUNCIL REGULATION MAY BE ADDRESSED TO THE COMMISSION, THEN IT IS IMPOSSIBLE TO SEE IN THE PRESENT CASE ON WHAT GROUND THIS ORDER COULD NOT BE ADDRESSED TO THE COMMISSION, EVEN THOUGH THE MAIN ACTION IS BROUGHT AGAINST THE PARLIAMENT, ESPECIALLY AS THE COMMISSION IS THE INSTITUTION RESPONSIBLE FOR THE IMPLEMENTATION OF THE BUDGET, ALBEIT NOT FOR ITS ADOPTION .
24 THE COMMISSION ' S REPRESENTATIVE INDICATED AT THE HEARING THAT HIS INSTITUTION, ALTHOUGH NOT A PARTY TO THE PROCEEDINGS, WOULD COMPLY WITH ANY ORDER WHICH THE COURT MIGHT ADDRESS TO IT .
25 IN ORDER TO ESTABLISH A PRIMA FACIE CASE FOR THE GRANT OF THE INTERIM MEASURES WHICH IT SEEKS, THE APPLICANT ARGUES IN ITS MAIN SUBMISSION THAT, BY INCREASING NON-COMPULSORY EXPENDITURE TO THE LEVEL RESULTING FROM ITS VOTE ON 12 DECEMBER 1975, THE PARLIAMENT EXCEEDED THE POWERS CONFERRED ON IT BY ARTICLE 203 ( 9 ) OF THE EEC TREATY . THE INCREASE IN NON-COMPULSORY EXPENDITURE PROVIDED FOR IN THE BUDGET FOR THE FINANCIAL YEAR 1986 PLAINLY EXCEEDS, ACCORDING TO THE APPLICANT, THE MAXIMUM RATE OF INCREASE LAID DOWN BY THE TREATY FOR NON-COMPULSORY EXPENDITURE .
26 IN THE APPLICANT ' S VIEW THE RELEVANT MAXIMUM RATE OF INCREASE TO BE ADOPTED FOR THE PURPOSE OF ESTABLISHING THAT EXCESS IS NO LONGER THE COMMISSION ' S INITIAL RATE OF 7.1%, INCREASED BY THE PARLIAMENT ' S MARGIN FOR MANOEUVRE UNDER THE FOURTH SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY, BUT THE HIGHER RATE PROPOSED BY THE COUNCIL AT THE SECOND READING OF THE BUDGET IN ORDER TO MAKE PROVISION FOR THE ' COSTS OF THE PAST '
AND THE COSTS ASSOCIATED WITH THE ENLARGEMENT OF THE COMMUNITY, IN VIEW OF THE FACT THAT THE LATTER RATE WAS BY IMPLICATION ACCEPTED BY THE EUROPEAN PARLIAMENT .
27 IT CONSIDERS THAT IN THE PRESENT CASE NEITHER ARTICLE 203 ( 9 ) NOR ANY OTHER PROVISION OF THE EEC TREATY CONFERS ON THE EUROPEAN PARLIAMENT THE POWER TO INCREASE UNILATERALLY NON-COMPULSORY EXPENDITURE BEYOND THAT MAXIMUM RATE OF INCREASE EVEN IF THE PARLIAMENT TAKES THE VIEW THAT THE COUNCIL HAD ACTED ILLEGALLY IN NOT MAKING SUFFICIENT PROVISION TO COVER THE ' COSTS OF THE PAST '
AND THE COSTS ASSOCIATED WITH THE ENLARGEMENT .
28 THE APPLICANT ALSO REJECTS THE DEFENDANT ' S ARGUMENT PUT FORWARD IN ITS WRITTEN OBSERVATIONS TO THE EFFECT THAT THE EXPENDITURE WHICH THE COMMUNITY WILL HAVE TO COMMIT IN ORDER TO COVER THE ' COSTS OF THE PAST '
AND THOSE ASSOCIATED WITH THE ENLARGEMENT HAVE NO EQUIVALENT IN THE 1985 BUDGET AND ARE THEREFORE NOT SUBJECT TO THE MAXIMUM RATE OF INCREASE IN NON-COMPULSORY EXPENDITURE LAID DOWN BY THE EEC TREATY . IT MAINTAINS THAT THE APPLICATION OF THAT RATE IS LIMITED, BY VIRTUE OF THE FIRST SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY, TO ' EXPENDITURE OF THE SAME TYPE ' . IN THAT REGARD IT OBSERVES THAT IT IS CLEAR FROM THE VERY WORDING OF THE FOURTH SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY THAT THE EXPRESSION ' EXPENDITURE OF THE SAME TYPE '
MUST BE UNDERSTOOD AS REFERRING TO NON-COMPULSORY EXPENDITURE CONCEIVED IN GLOBAL TERMS AND NOT TO SPECIFIC ITEMS OF NON-COMPULSORY EXPENDITURE APPEARING IN THE BUDGET FOR THE PRECEDING FINANCIAL YEAR, SINCE THAT PROVISION EXPRESSLY STATES THAT THE EUROPEAN PARLIAMENT MAY, IN THE CASE OF NON-COMPULSORY EXPENDITURE, INCREASE THE TOTAL AMOUNT OF THAT EXPENDITURE TO A LIMIT NOT EXCEEDING HALF THE MAXIMUM RATE . IT POINTS OUT IN ADDITION THAT THE FIFTH SUBPARAGRAPH OF ARTICLE 203 ( 9 ) OF THE EEC TREATY ENABLES NEW EXPENDITURE RESULTING FROM THE ACTIVITIES OF THE COMMUNITY TO BE MET, INASMUCH AS IT PROVIDES FOR THE POSSIBILITY, SHOULD THE NECESSITY ARISE, OF FIXING A NEW RATE OF INCREASE IN NON-COMPULSORY EXPENDITURE EXCEEDING THAT DETERMINED ACCORDING TO THE PROCEDURE LAID DOWN IN ARTICLE 203 ( 9 ), BUT ONLY IF THERE IS AGREEMENT BETWEEN THE TWO BUDGETARY AUTHORITIES .
29 THE EUROPEAN PARLIAMENT NEXT MAINTAINS THAT THE COUNCIL HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLES 199 AND 203 ( 10 ) OF THE EEC TREATY INASMUCH AS IT FAILED TO SUBMIT TO THE PARLIAMENT, ON THE OCCASION OF THE FIRST READING, A DRAFT BUDGET PROVIDING FOR SUFFICIENT APPROPRIATIONS TO ENABLE THE COMMUNITY TO MEET ALL ITS FINANCIAL COMMITMENTS, IN PARTICULAR IN REGARD TO THE ' COSTS OF THE PAST '
AND COSTS ASSOCIATED WITH THE ENLARGEMENT . THE COUNCIL, MOREOVER, HAS ACKNOWLEDGED THAT ILLEGALITY, SINCE IT INSERTED APPROPRIATIONS TO THAT END IN ITS SECOND READING OF THE BUDGET . THOSE APPROPRIATIONS ARE, MOREOVER, WHOLLY INADEQUATE, A FACT DEMONSTRATED BY THE DECLARATIONS MADE ON 12 DECEMBER 1985 BY THE PRESIDENT OF THE COUNCIL AND ON 5 MARCH 1986 BY THE MEMBER OF THE COMMISSION WITH SPECIAL RESPONSIBILITY FOR THE BUDGET, ACCORDING TO WHICH A SUPPLEMENTARY BUDGET FOR THE FINANCIAL YEAR 1986 WOULD BE INDISPENSIBLE IF THE COMMUNITY WAS TO BE ENABLED TO FULFIL ITS FINANCIAL COMMITMENTS .
30 THE EUROPEAN PARLIAMENT ALSO EMPHASIZES THAT THE EFFECT OF COUNCIL ' S INITIAL CONDUCT IN NOT SUBMITTING A BUDGET COVERING ALL COMMUNITY EXPENDITURE FOR THE FINANCIAL YEAR 1986 WAS THAT THE COUNCIL ' S SECOND READING OF THE BUDGET BECAME THE PARLIAMENT ' S FIRST AND LAST READING, SO THAT THE PARLIAMENT WAS UNABLE TO USE THE POSSIBILITIES OF AMENDMENT OF ALL NON-COMPULSORY EXPENDITURE AND OF SIMPLE MAJORITY VOTING OPEN TO IT ON FIRST READING .
31 THE APPLICANT SUBMITS IN ADDITION THAT THE EUROPEAN PARLIAMENT HAS ALSO EXCEEDED ITS POWERS UNDER ARTICLE 203 BY INCREASING THE NON-COMPULSORY EXPENDITURE IN THE MANNER DESCRIBED IN PARAGRAPH 15 OF THIS ORDER, FOR THAT ARTICLE DOES NOT IN ANY WAY CONFER UPON IT THE UNILATERAL POWER TO RE-CLASSIFY UNDER ITEMS COMING UNDER NON-COMPULSORY EXPENDITURE CERTAIN ITEMS PREVIOUSLY ALLOCATED TO COMPULSORY EXPENDITURE . IT POINTS OUT THAT THE JOINT DECLARATION OF 30 JUNE 1982 OF THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COMMISSION ON VARIOUS MEASURES TO IMPROVE THE BUDGETARY PROCEDURE ( OFFICIAL JOURNAL, C 194, P . 1 ) PROVIDES FOR A RECONCILIATION PROCEDURE IN THE EVENT OF DISPUTE IN REGARD TO THE CLASSIFICATION OF BUDGET ITEMS .
32 BEFORE DETERMINING WHETHER THE APPLICANT HAS SUCCEEDED IN ESTABLISHING A PRIMA FACIE CASE, IT MUST BE BORNE IN MIND THAT ACCORDING TO A CONSISTENT LINE OF DECISIONS OF THE COURT INTERIM MEASURES MAY BE GRANTED ONLY IF THEY DO NOT PREJUDGE THE DECISION TO BE GIVEN ON THE SUBSTANCE OF THE CASE ( SEE, IN PARTICULAR, THE ORDER IN JOINED CASES 60 AND 190/81 R, IBM V COMMISSION ( 1981 ) ECR 1857 ).
33 IN THIS CASE, IT IS CLEAR THAT THE FUNDAMENTAL ISSUE BETWEEN THE PARTIES IS THE QUESTION WHETHER THE EUROPEAN PARLIAMENT HAD THE POWER UNILATERALLY TO INCREASE NON-COMPULSORY EXPENDITURE BEYOND THE MAXIMUM RATE PROPOSED BY THE COUNCIL ON THE OCCASION OF THE SECOND READING OF THE DRAFT BUDGET ON 26 AND 27 NOVEMBER 1985 .
34 IN ORDER TO RESOLVE THIS PROBLEM, IT IS NECESSARY TO ASCERTAIN WHETHER THE EUROPEAN PARLIAMENT WAS ENABLED BY ANY PROVISION OF THE EEC TREATY TO EXCEED THE RATES ESTABLISHED BY THE COUNCIL FOR NON-COMPULSORY EXPENDITURE ON THE OCCASION OF THE SECOND READING OF THE BUDGET, NAMELY 20.5% IN RESPECT OF PAYMENT APPROPRIATIONS AND 14.6% IN RESPECT OF COMMITMENT APPROPRIATIONS .
35 IN THAT RESPECT, IT MUST BE NOTED THAT AT THE HEARING, IN REPLY TO A QUESTION PUT TO HIM BY THE PRESIDENT OF THE COURT, THE PARLIAMENT ' S AGENT STATED THAT THE LEGAL BASIS ON WHICH THE PARLIAMENT HAD TAKEN ITS DECISION OF 12 DECEMBER 1985 WAS ARTICLE 203 ( 6 ) OF THE EEC TREATY .
36 ALTHOUGH THE EFFECT OF PARAGRAPH ( 6 ) OF ARTICLE 203 OF THE EEC TREATY IS TO GIVE THE EUROPEAN PARLIAMENT THE LAST WORD AS REGARDS NON-COMPULSORY EXPENDITURE AND TO CONFER ON IT THE POWER TO ADOPT THE BUDGET, IT MUST BE BORNE IN MIND THAT THAT PARAGRAPH HAS TO BE CONSIDERED IN CONJUNCTION WITH PARAGRAPH ( 9 ) OF THE SAME ARTICLE . FROM A READING OF THOSE TWO PARAGRAPHS, TAKEN TOGETHER, OF ARTICLE 203 OF THE EEC TREATY, IT APPEARS THAT THE EUROPEAN PARLIAMENT ' S RIGHT TO THE LAST WORD IN REGARD TO NON-COMPULSORY EXPENDITURE MAY BE EXERCISED ONLY WITHIN THE LIMITS OF THE MAXIMUM RATE OF INCREASE LAID DOWN IN PARAGRAPH ( 9 ) OF THAT ARTICLE . IF IT IS DESIRED TO INCREASE NON-COMPULSORY EXPENDITURE BEYOND THAT RATE, IT SEEMS THAT A NEW RATE OF INCREASE MUST BE FIXED BY AGREEMENT BETWEEN THE TWO BUDGETARY AUTHORITIES . IT WOULD THEREFORE APPEAR, AT FIRST SIGHT, THAT ARTICLE 203 ( 6 ) OF THE EEC TREATY DID NOT CONFER ON THE EUROPEAN PARLIAMENT THE POWER TO INCREASE UNILATERALLY NON-COMPULSORY EXPENDITURE BEYOND THE MAXIMUM RATE OF INCREASE STATED IN THE DRAFT BUDGET ESTABLISHED BY THE COUNCIL AT THE SECOND READING .
37 IN THE LIGHT OF THE CONSIDERATIONS SET OUT ABOVE, IT MAY BE ACCEPTED THAT THE APPLICANT HAS SUCCEEDED IN ADVANCING COGENT ARGUMENTS WHICH IT WILL BE NECESSARY TO EXAMINE IN GREATER DEPTH WHEN THE MAIN APPLICATION IS CONSIDERED . IT MAY THEREFORE BE CONSIDERED THAT THE SUBMISSIONS RELIED ON BY THE APPLICANT ESTABLISH A PRIMA FACIE CASE FOR THE GRANT OF THE INTERIM MEASURES REQUESTED BY IT . IN PROCEEDINGS ON AN APPLICATION FOR INTERIM MEASURES A FINDING THAT THERE IS A PRIMA FACIE CASE DOES NOT, HOWEVER, PREJUDGE THE DECISION TO BE GIVEN ON THE SUBSTANCE OF THE CASE . IT REMAINS OPEN TO THE PARLIAMENT TO PUT FORWARD IN THE PROCEEDINGS IN THE MAIN ACTION ALL SUCH ARGUMENTS AS IT MAY CONSIDER APPROPRIATE FOR THE PURPOSE OF ESTABLISHING THAT ITS VOTE ON 12 DECEMBER 1985 LAY WITHIN ITS POWERS AND WAS LAWFUL .
38 EVEN IF IT MAY BE CONSIDERED THAT IN THIS CASE THE APPLICANT HAS PUT FORWARD FACTUAL AND LEGAL GROUNDS ESTABLISHING A PRIMA FACIE CASE FOR THE GRANT OF THE INTERIM MEASURE WHICH IT SEEKS, IT REMAINS FOR THE COURT TO DETERMINE WHETHER THERE ARE CIRCUMSTANCES GIVING RISE TO URGENCY .
39 IT FOLLOWS FROM A CONSISTENT LINE OF DECISIONS OF THE COURT THAT THE URGENCY OF AN APPLICATION FOR INTERIM MEASURES, AS STIPULATED IN ARTICLE 83 ( 2 ) OF THE RULES OF PROCEDURE, MUST BE CONSIDERED IN RELATION TO THE NEED TO GIVE AN INTERIM DECISION IN ORDER TO PREVENT SERIOUS AND IRREPARABLE DAMAGE FROM BEING CAUSED TO THE PARTY REQUESTING THE INTERIM MEASURES .
40 IN THAT RESPECT THE APPLICANT CLAIMS THAT IT WILL SUFFER SERIOUS AND IRREPARABLE DAMAGE ON THE DATE ON WHICH JUDGMENT IS DELIVERED ON THE SUBSTANCE OF THE CASE, EVEN IF THAT JUDGMENT DECLARES THE GENERAL BUDGET OF THE EUROPEAN COMMUNITIES FOR THE FINANCIAL YEAR 1986 TO BE ILLEGAL . THE FACT THAT A JUDGMENT MIGHT BE DELIVERED BY THE COURT BEFORE THE JUDICIAL SUMMER VACATION IN CASE 34/86 ( COUNCIL V PARLIAMENT ) IN REGARD TO THE SAME 1986 BUDGET IN NO WAY ALTERS THAT SITUATION .
41 THE APPLICANT OBSERVES, IN THAT REGARD, THAT THERE CAN BE NO DOUBT THAT THE COMMISSION INTENDS TO IMPLEMENT THE BUDGET AS ADOPTED BY THE PARLIAMENT ON THE OCCASION OF ITS VOTE ON 12 DECEMBER 1985, SINCE IT HAS ALREADY REQUESTED THE APPLICANT TO CREDIT ITS OWN RESOURCES ACCOUNT WITH THE SUM OF 223.9 MILLION ECU, AN AMOUNT WHICH, ALTHOUGH BASED ON THE 1986 BUDGET, THE APPLICANT HAS PAID IN FULL ON AN EX GRATIA BASIS . ACCORDINGLY IT IS LIKELY THAT THE GREATER PART OF, IF NOT ALL, THE APPROPRIATIONS AT ISSUE - IN THE CASE OF THE UNITED KINGDOM 115.9 MILLION ECU - WILL HAVE BEEN USED EITHER TO MAKE PAYMENTS OR TO COMMIT THE COMMUNITY TO PROGRAMMES BEFORE THE DATE ON WHICH THE JUDGMENT IN THE MAIN ACTION IS DELIVERED . THE APPROPRIATIONS AT ISSUE WILL IN PRACTICE BE IRRECOVERABLE SINCE IT WOULD BE VERY DIFFICULT, OR INDEED IMPOSSIBLE, TO CALL BACK THE SUMS PAID OR COMMITTED .
42 IT ALSO STRESSES THAT THE GRANT OF THE INTERIM MEASURES WHICH IT SEEKS WOULD NOT CREATE ANY RISK OF SERIOUS AND IRREPARABLE DAMAGE FOR THE COMMUNITY OR THIRD PARTIES IF THE MAIN ACTION WERE TO FAIL, SINCE THE PAYMENT APPROPRIATIONS AND THE COMMITMENT APPROPRIATIONS CONCERNED COULD ALWAYS BE USED IN 1987 AND THE MEMBER STATES WOULD BE LIABLE TO MAKE THE OUTSTANDING FINANCIAL TRANSFERS ; ANY DELAY IN THE LATTER RESPECT WOULD RESULT IN AN OBLIGATION ON THEIR PART TO PAY INTEREST UNDER ARTICLE 11 OF COUNCIL REGULATION ( EEC, EURATOM, ECSC ) NO 2891/77 OF 19 DECEMBER 1977 IMPLEMENTING THE DECISION OF 21 APRIL 1970 ON THE REPLACEMENT OF FINANCIAL CONTRIBUTIONS FROM MEMBER STATES BY THE COMMUNITIES '
OWN RESOURCES ( OFFICIAL JOURNAL, L 336, P . 1 ).
43 THE APPLICANT ALSO REJECTS THE MAIN ARGUMENT PUT FORWARD BY THE EUROPEAN PARLIAMENT IN SUPPORT OF ITS CONTENTION THAT THERE IS NO IRREPARABLE DAMAGE, WHICH IS TO THE EFFECT THAT, IF THE MAIN ACTION SUCCEEDS, THE COMMUNITY WILL OWE A LEGALLY BINDING DEBT, IN PARTICULAR TO THE APPLICANT, WHICH COULD BE DISCHARGED BY AN AMENDING BUDGET ADOPTED FOR 1986 OR 1987 . TO ACCEPT THAT ARGUMENT WOULD AMOUNT, ACCORDING TO THE APPLICANT, TO TAKING AWAY WITH ONE HAND WHAT ONE GIVES WITH THE OTHER, SINCE THE AMENDING BUDGET DESIGNED TO EXTINGUISH THE COMMUNITY ' S DEBT VIS-A-VIS THE MEMBER STATES WOULD BE FINANCED BY THE MEMBER STATES THEMSELVES .
44 THE EUROPEAN PARLIAMENT GOES ON TO CAST DOUBT ON THE SERIOUS NATURE OF THE DAMAGE WHICH THE APPLICANT WOULD SUFFER IF THE MEASURES IT SEEKS WERE REFUSED, SINCE THE APPROPRIATIONS AT ISSUE WOULD, IN THE CASE OF THE UNITED KINGDOM, ONLY BE EQUIVALENT TO 0.05% OF ITS NATIONAL BUDGET FOR THE FINANCIAL YEAR 1986 AND WOULD REPRESENT ONLY 2.3% OF THE TOTAL AMOUNT PAID BY THE UNITED KINGDOM TO THE COMMUNITY BUDGET .
45 FROM THE CIRCUMSTANCES DECRIBED ABOVE AND FROM THE STATEMENT MADE AT THE HEARING BY THE COMMISSION ' S REPRESENTATIVE TO THE EFFECT THAT THE COMMISSION IN PRACTICE HAS A VERY NARROW MARGIN OF DISCRETION AS REGARDS THE IMPLEMENTATION OF THE BUDGET, IT IS CLEAR THAT THE COMMISSION WILL BE OBLIGED TO SPEND OR COMMIT THE APPROPRIATIONS AT ISSUE IN THE COURSE OF THE FINANCIAL YEAR 1986, WITH ALL THE DIFFICULTIES WHICH THAT WOULD ENTAIL, IF THE MAIN APPLICATION WERE TO SUCCEED, IN REGARD TO THE REPAYMENT OF SUMS UNDULY PAID BY THE APPLICANT .
46 IN THESE CIRCUMSTANCES IT APPEARS THAT THE APPLICANT HAS PROVIDED SUFFICIENT EVIDENCE THAT IT WOULD SUFFER SERIOUS AND IRREPARABLE DAMAGE AND THAT IT HAS THEREFORE SATISFIED THE REQUIREMENT OF URGENCY WHICH MUST BE ESTABLISHED ON AN APPLICATION FOR INTERIM MEASURES, ALL THE MORE SO SINCE THE GRANT OF THE INTERIM MEASURES WHICH IT REQUESTS COULD NOT, IN ANY EVENT, FOR THE REASONS GIVEN IN PARAGRAPH 42 OF THIS ORDER, CAUSE SERIOUS AND IRRREPARABLE DAMAGE TO THE COMMUNITY .
Operative part
ON THOSE GROUNDS,
THE PRESIDENT,
BY WAY OF AN INTERIM DECISION,
HEREBY ORDERS :
( 1 ) THE COMMISSION SHALL IMPLEMENT, UNTIL 10 JULY 1986 OR UNTIL THE DATE ON WHICH THE COURT DELIVERS ITS JUDGMENT IN CASE 34/86, COUNCIL V EUROPEAN PARLIAMENT, WHICHEVER DATE SHALL BE THE EARLIER, THE BUDGET FOR THE FINANCIAL YEAR 1986, AS REGARDS BOTH PAYMENT APPROPRIATIONS AND CREDIT APPROPRIATIONS, ON THE BASIS OF THE DRAFT BUDGET ESTABLISHED BY THE COUNCIL AT ITS SECOND READING ON 27 NOVEMBER 1985, SUBJECT TO THOSE AMENDMENTS DECIDED BY THE PARLIAMENT ON 12 DECEMBER 1985 WHICH DO NOT HAVE THE EFFECT OF INCREASING NON-COMPULSORY EXPENDITURE, THAT IS TO SAY THE AMENDMENTS BY WAY OF TRANSFER FROM BUDGET LINE B 660 TO THE NEW LINES B 6615, 6616 AND 6617 AND TO LINE 6632 AND FROM BUDGET LINE B 944 TO LINE A 1 100 .
( 2)IN THE FIRST CALL WHICH IT MAKES, FOLLOWING THIS ORDER, ON THE UNITED KINGDOM FOR FUNDS RELATING TO THE 1986 BUDGET, THE COMMISSION SHALL REDUCE THE AMOUNT CLAIMED, ON THE BASIS OF THE BUDGET ESTABLISHED BY THE COUNCIL AT ITS SECOND READING, BY THE AMOUNT OF ANY OVERPAYMENTS MADE BY THE UNITED KINGDOM PRIOR TO THIS ORDER ON THE BASIS OF THE BUDGET DECLARED BY THE PRESIDENT OF THE EUROPEAN PARLIAMENT ON 18 DECEMBER 1985 .
( 3)SHOULD THE COURT NOT DELIVER ITS JUDGMENT IN THE AFORESAID CASE 34/86 ON OR BEFORE 10 JULY 1986, THE UNITED KINGDOM SHALL RE-APPEAR BEFORE THE COURT WITHOUT DELAY IN ORDER TO ASCERTAIN WHETHER THE COURT WILL MAINTAIN THE ORDER WHICH IT HAS ADDRESSED TO THE COMMISSION .
( 4)THE COSTS ARE RESERVED .