19.2.94 OfficialJournaloftheEuropeanCommunities NoC52/1
II
(PreparatoryActs)
ECONOMIC ANDSOCIALCOMMITTEE
OpinionontheproposalforaCouncilDecisiononthesystemoftheCommunities'Own
Resources
(94/C52/01)
On2November1993theCounciloftheEuropeanCommunities decidedtoconsultthe
EconomicandSocialCommitteeforanOpinionontheabovementioned proposal.
TheSectionforEconomic,FinancialandMonetaryQuestions,whichwasresponsiblefor
preparingtheCommittee'sworkonthesubject,adopteditsOpinionon30November1993.
TheRapporteurwasMrGiacomelli .
Atits311thPlenarySession(meetingof21December1993),theEconomicandSocial
CommitteeunanimouslyadoptedthefollowingOpinion.
1.Introduction —overthesameperiod,theVATrateceilingisgradu­
allytobebroughtdownfrom1.4%to1%ofthe
uniformbase;theVATbase,currentlycappedat
55%ofGNP,wouldbecappedat50%ofGNP
from1995onwardsforthoseMemberStateswhose
percapitaGNPislessthan90%oftheCommunity
average.Fortheothersitwillgraduallybebrought
downto50%.
1.5.Thecreationofafifthresource,mentionedin
Edinburghbutwithoutspecifyingwhatformitwould
take,iscurrentlybeingstudiedbytheCommission .
TheCommitteewillgiveitsviewsattheappropriate
juncture.1.1.InitsOpinionof30April1992ontheDelorsII
Package(x)theEconomicandSocialCommitteegave
itsviewsonthecaseforanincreaseintheCommunities '
ownresources,takingaccountofeachMemberState's
capacitytocontribute.Thebroadprinciplesofthis
Opinionstillholdgood.
1.2.ThepresentCommissionproposalistechnical
innatureandintendedessentiallytoenshrineinlegal
formthepoliticalconclusionsreachedbytheEuropean
CouncilinEdinburghon11and12December1992.
1.3.ItismostunfortunatethattheCommitteehas,
yetagain,beengivensolittletimetodeliveritsOpinion.
1.4.ThedraftDecisionintroducestwomajor
amendmentstothearrangementsadoptedin1988:
—from1995to1999,theannualownresources'ceiling
istoberaisedgraduallyfromthecurrentfigureof
1.20%to1.27%ofCommunityGNPforpayment
appropriations ,andfrom1.30%to1.335%for
commitmentappropriations ;2.Generalcomments
2.1.Thehigherannualownresources'ceilingis
lowerthanthatoriginallyenvisagedbytheCommission
(1.37%).Thisfigurewasbasedonanestimated2.5%
annualGNPgrowth,whichnolongercorrespondsto
eithercurrentcircumstances orforecasts.Further,the
delayedratificationoftheMaastrichtTreatyhasresult­
edintheownresourcesarrangements establishedin
1988beingextendeduntil1994.Atpresent,itseemsthat
the1.27%ceilingmaysuffice,especiallyifCommunityHOpinionof30April1992'FromtheSingleActtoMaastricht
andbeyond—Themeanstomatchourambitions'(OJ
NoC169,6.7.1992).

NoC52/2 OfficialJournaloftheEuropeanCommunities 19.2.94
GNPbeginstopickupinthenextfewyears.The
current1.20%ceilinghasanywaynotyetbeenattained.resourcesnotbecalledinfromtheMemberStatesuntil
thereserveisdrawnon.
3.3.Thisalignmentislogicalandshouldbe
approved.2.2.ThelowerVATratecannodoubtbejustified
bytheneedtotakeaccountoftheMemberStates'
individualcapacitytocontribute.Itwillinanyevent
havetobeoffsetbyresourcesbasedonGNP.
3.4.OnthetighterchecksonVATtobemadeby
theCommission [Art.7(2)],itisperfectlyunderstanda­
ble,inthelightofcurrentfraudlevelsandirregularities ,
thattheCommission wishestobeabletoactmore
effectively,albeitstillonthebasisofthearrangements
decidedbytheCouncil.2.3.Inaddition,itisextremelydifficulttopredict
whatexpenditurewillactuallyberequiredoftheCom­
munitybetween1995and1999.Thesubsidiarityprin­
ciple,forinstance,worksbothways.Itdoesnotauto­
maticallymeanacurtailmentofCommunityspending.
Soundmanagementdictatesthatexpendituremustbe
channelledtothoseareaswhereitismostproductive
andeffective.3.5.TheveryintricatewordingofArticle7(2)ofthe
proposalwouldseemtoindicatethatitisnotsomuch
aquestionofgivingtheCommissionnewpowersto
carryoutchecksastoenableittoputforwardrec­
ommendations .Iffraudistobecurbed,themeansto
dosomustbeprovidedandtheCommission'sargument
seemslogical.(Forthesakeofform,itshouldbenoted
thatArticle7(2)oftheproposalreferstoArticle206a
oftheTreatyestablishingtheEuropeanEconomic
Community .Yetthisarticlewasrepealedby
ArticleG75oftheMaastrichtTreatyonEuropean
Union!)2.4.Tofixresourcesforafive-yearperiodisbotha
necessaryandriskyoperation-necessarytoprovidethe
CommunityandtheMemberStateswiththereference
frameworkvitalforanybudgetaryprogramming ;risky
becauseinevitablyitincludesanumberofcomponents
whicharedifficulttopredictaccurately.Thisexercise
mustthereforenotberegardedasastraitjacket;ifneed
be,adjustmentsshouldbepossible.Everythingwill
hingeonthepoliciestobepursued.
3.6.Theadjustmentrelatingtothegraduatedrefund
ofownresourcespaymentstoGreece,SpainandPortu­
galdoesnotaltersuchrefundsandhenceseemstodo
nomorethantidyupbudgetaryarrangements .Itshould
thereforebeapproved.2.5.Communityfinancing,basedoneachMember
State'scapacitytocontribute,shouldanywaybeviewed
inaspiritofsolidarity.StrictdisciplineontheCom­
munity'spartisnotincompatiblewiththeseprinciples.
Itisthecorollary—andeventheprerequisite .The
negligenceandwasterecentlycriticizedbytheCourt
ofAuditorsintheaidsphere,alongwithVATfraud,
mustencourageboththeCommunityandnational
authoritiestojoinforcestostampoutsuchpractices.
Theircredibilityisatstake,asisacceptancebythe
man-in-the-street ofincreasedefforts.3.7.TheCommissionisalsoproposingthedeletion
ofArticle7ofthedecisionof24June1988,wherebyany
surplusofCommunityrevenueovertotalexpenditurein
agivenyeariscarriedovertothefollowingyear.Here
asurplusgeneratedbyatransferfromtheEAGGF
Guaranteechaptertothemonetaryreserveisregarded
asconstitutingownresources.TheCommissioncon­
sidersthisamatterforsecondarylegislation.
3.Specificcomments3.8.AsthismatterisdealtwithintheFinancial
Regulation,Article7shouldbedeleted.
3.1.IngivingshapetotheEuropeanCouncil'scon­
clusions,theCommissionproposesanumberofadjust­
mentswhichareeitherrootedintheseconclusionsor
areconsideredexpedient.3.9.TheCouncilhadrequestedastudyofafixed
uniformVATrate.
3.2.Theproposalextendstheprovisionalreadygov­
erningtheEAGGFmonetaryreservetothereservesfor
financingtheloanguaranteefundandforemergency
aidinnon-membercountries,viz.thattherequisite3.10.TheCommissionacknowledges theadvantages
ofsucharatebuthasnotincludeditintheproposal
becauseofits(limited)implicationsfortheMember
States(with.theexceptionoftheUnitedKingdom).
However,ithasdraftedanamendmentthatcouldbe

19.2.94 OfficialJournaloftheEuropeanCommunities NoC52/3
incorporatedintotheproposalshouldtheCouncilopt
forafixeduniformVATrate.3.12.Thecompensation grantedtotheUnited
Kingdomtocorrectbudgetaryimbalances (Article4)
wasmotivatedbytheexceptionalcircumstances pre­
vailingatthattime.Areviewinthenearfutureofthe
advisabilityofadoptingamedium-termtimetable,to
ascertainhowfartheseexceptionalcircumstancesper­
sistandwhetherthecorrectionshouldgraduallybe
scaleddown,mightbeconsidered .
4.Conclusion3.11.Generallyspeaking,sucharateisdesirablein
termsofgreaterconsistency,transparencyandpredicta­
bility.Theproblemishowtofixitatalevelwhich
doesnotpenalizetheMemberStates(withtheexception
oftheUnitedKingdom),inparticularthosewhose
contribution wouldincreaseasaresultoftheVAT
ratebeingreduced.Thesolutionadvocatedbythe
Commissioncombinesestablishedfacts(stability)and
forecasts(instability)butisinnowaysystematically
negativevis-a-visspecificMemberStates.TheCouncil
willhavetotakeadecisiononthisformula,which
seemstobethemostneutraloneandwouldalsohave
theadvantageofsimplifyingthesystem.4.1.IntheESCOpinionreferredtounderpoint1.1,
theCommitteegaveitsviewsonthepoliticalaspects
oftheCommunity'sownresources.Theproposalscur­
rentlybeingconsideredareessentiallytechnicalinnatu­
re.Subjecttotheabovecomments,theCommitteegives
itsapproval.
DoneatBrussels,21December1993.
TheChairman
oftheEconomicandSocialCommittee
SusanneTIEMANN