No C 146/22 Official Journal of the European Communities 3. 6. 88 
— the Commission may defer application of the 
measures which it has decided for a period of not 
more than one month from the date of such 
communication, 
— the Council, acting by a qualified majority, may take 
a different decision within the time limit referred to 
in the previous paragraph. 
Article 9 
1. The result of the programme shall be reviewed by 
the Commission after 18 months. The Commission shall 
report to the Council and the European Parliament on 
the results of this review, (together with any proposals 
for modification or prolongation of the programme 
which the Commission deems appropriate). 
2. After the completion of the programme, the 
Commission shall send to Council and European 
Parliament a report on the performance and results of 
the programme. 
3. The abovementioned reports will be carried out in 
relation to the precise objectives set out in Annex II to 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaties establishing the European 
Communities, and in particular Articles 43 and 235 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Whereas the European Council has agreed that the 
Community must submit the use of its own resources to 
effective and legally binding discipline parallel to the 
efforts being made by the Member States in connection 
with their own budgets; 
Whereas the arrangements for budgetary discipline 
decided upon by the European Council at Fontainebleau 
must be strengthened in the light of experience; 
Whereas budgetary discipline must be applied to all the 
Community's expenditure; whereas it must cover both 
payment and commitment appropriations; this Decision and in conformity with the provisions of 
Article 2 paragraph 2 of the Framework Programme. 
Article 10 
1. With regard to the concertation activities provided 
for in Article 1 (2), the Member States and the 
Commission shall exchange all appropriate information 
to which they have access and which they are free to 
disclose concerning activities in the areas covered by this 
Decision, whether or not planned or carried out under 
their authority. 
2. Information shall be exchanged according to a 
procedure to be defined by the Commission after 
consulting the Committee, and shall be treated as 
confidential at the supplier's request. 
Article 11 
This Decision shall apply from 1 June 1988. 
Article 12 
This Decision is addressed to the Member States. 
Whereas rules on budgetary discipline as regards non-
compulsory expenditure will be laid down in a joint 
declaration by Parliament, the Council and the 
Commission; 
Whereas the European Council on 11, 12 and 13 
February agreed the principles of a guideline for the 
control of agricultural expenditure; 
Whereas the rate of progression of EAGGF Guarantee 
Section expenditure must not exceed 74 % of the rate of 
increase in Community GNP, this rate corresponding to 
that of 80 % of maximum EAGGF financing of set-aside 
is taken into consideration; 
Whereas the European Council has also agreed to mech­
anisms for the systematic depreciation of existing and 
future agricultural stocks so that the stock situation can 
be normalized by 1992; 
Whereas the stabilization mechanisms provided for in the 
provisions governing the common organization of 
markets should play a part in ensuring compliance with 
the agricultural guideline; 
Whereas the European Council has also agreed that the 
level of EAGGF Guarantee Section expenditure may be Proposal for a Council Decision concerning budgetary discipline 
COM(88) 257 final 
(Submitted by the Commission on 27 April 1988) 
(88/C 146/11) 
3. 6. 88 Official Journal of the European Communities No C 146/23 
influenced by movements in the USA dollar/ECU 
market rate, and that to cover developments caused by 
significant and unforeseen movements in the USA 
dollar/ECU market rate compared to the rate used in 
the budget a Monetary Reserve of 1 000 million ECU 
shall be entered each year in the budget in the form of 
provisional appropriations; 
Whereas it is necessary that compulsory expenditure 
other than EAGGF Guarantee Section expenditure be 
subject to budgetary rigour and planning; 
"Whereas the Treaty makes no explicit provision for the 
powers required to adopt measures of budgetary 
discipline in respect of expenditure outside agriculture; 
Whereas it is therefore necessary to rely on Article 235 
for the inclusion of such expenditure within the scope of 
budgetary discipline, 
HAS DECIDED AS FOLLOWS: 
EAGGF Guarantee Section expenditure 
Article 1 
The rate of increase in EAGGF Guarantee Section 
expenditure — as defined in Article 3 — between 1988 
and a given year must not exceed 74 % of the rate of 
increase in Community Gross National Product during 
the same period. 
This maximum progression for EAGGF Guarantee 
Section expenditure (the EAGGF Guarantee Section 
guideline), which would correspond to 80 % if 
maximum EAGGF financing of set-aside were taken into 
consideration, must be respected each year. 
Article 2 
The 1988 base of expenditure from which the guideline 
for each subsequent year is calculated is 27 500 million 
ECU, to be adjusted according to Article 3. The stat­
istical base with regard to GNP statistics will correspond 
to that used in Decision .. . (own resources Decision). 
All calculations which will be made by the Commission 
at the time of submitting its annual price-fixing proposal, 
subject to a possible final review at the time of 
submitting the preliminary draft budget for the following 
year, will be established in 1988 prices and converted 
into current prices by the use of the GNP deflator 
estimated by the Commission for the year in question. 
Article 3 
The expenditure to which Article 1 applies shall be the 
expenditure chargeable to Section III, Part B, Titles 1 
and 2 (EAGGF Guarantee Section) of the budget less amounts corresponding to the disposal of ACP sugar, 
food-aid refunds, sugar and isoglucose levy payments by 
producers, and any other revenue raised from the agri­
cultural sector in the future. 
Article 4 
The agricultural guideline shall include costs relating to 
depreciation of newly-created agricultural stocks. Each 
year the Council shall enter in its draft budget the appro­
priations necessary for financing all costs relating to 
depreciation of new stocks. The appropriations shall be 
used for the systematic depreciation of the new stocks, 
which shall start when these are formed, in accordance 
with the provisions which will be inserted in Regulation 
(EEC) No 1883/78. 
The cost of depreciating existing surplus agricultural 
stocks shall be met outside the agricultural guideline. 
The following amounts shall be included in Title 8 of the 
budget for the period 1988 to 1992 (1988 prices): 
— 1988: 1 200 million ECU, 
— 1989 to 1992: 1 400 million ECU. 
These amounts may not be used for any other purposes. 
The procedures for the financial compensation granted 
to Spain and Portugal in respect of their contribution to 
the financing of these stocks will be dealt with in a 
separate instrument. These two States shall be treated as 
if the depreciation of stocks had been entirely financed 
by the Community in 1987. 
Article 5 
The Commission's price proposals shall be consistent 
with the limits laid down by the agricultural guideline. 
If the Commission considers that the outcome of the 
Council's discussions on these price proposals is likely to 
exceed the costs put forward in its original proposal, the 
final decision shall be referred to a special meeting of the 
Council. 
The agricultural guideline must be respected each year. 
Article 6 
To ensure that the guideline is respected, the 
Commission shall establish an 'early warning system' 
covering the development of expenditure of the indi­
vidual EAGGF Guarantee Section expenditure chapters. 
Before the beginning of each budget year the 
Commission shall define expenditure profiles for each 
EAGGF Guarantee Section budget chapter based on the 
monthly expenditure over the preceding three years. The 
Commission shall submit monthly reports thereafter to 
the European Parliament and the Council on the devel­
opment of actual expenditure against profiles. Where the 
rate of development of expenditure is exceeding the 
No C 146/24 Official Journal of the European Communities 3. 6. 88 
forecast profile, or risks doing so, the Commission shall 
use the management powers at its disposal, including 
those which it has under the stabilizing measures, to 
remedy the situation. If these measures are insufficient, 
the Commission shall examine the functioning of the 
agricultural stabilizers in the relevant sector and, if 
necessary, shall present proposals to the Council 
calculated to strengthen their action. The Council shall 
act within a period of two months in order to remedy 
the situation. 
Article 7 
Payment of the monthly EAGGF Guarantee Section 
advances by the Commission shall be effected on the 
basis of the information supplied by the Member States 
in regard to agricultural expenditure for each common 
market organization. 
Article 8 
Where no appropriations are available, the Commission 
shall propose transfers to the budget authority. 
Article 9 
The USA dollar/ECU rate used to draw up the annual 
budget estimates of EAGGF Guarantee Section expen­
diture for year n shall be the average market rate over 
the first three months of year n—1. However, the rate 
used in the budget for 1988 shall be 1 USA dollar = 
0,85 ECU. 
Article 10 
1 000 million ECU shall be included annually in the 
reserve, Chapter 100 of the general budget of the 
Communities, as a provision for covering developments 
caused by significant and unforeseen movements in the 
dollar/ECU market rate compared to the USA dollar/ 
ECU rate used in the budget. These appropriations shall 
not be included in the agricultural guideline. 
Article 11 
Each October, the Commission shall report to the 
budget authority on the impact on EAGGF Guarantee 
Section expenditure of movements in the average USA 
dollar/ECU market rate for the period 1 August of year 
n—1 to 31 July of year n compared to the rate used in 
the budget, as defined in Article 9. 
Article 12 
Savings or additional costs resulting from movements in 
the rate shall be treated in a symmetrical fashion. Where 
favourable changes take place in the USA dollar/ECU 
rate compared to the budget rate, savings in the Guarantee Section of up to 1 000 million ECU shall be 
transferred to the Monetary Reserve. Where additional 
budgetary costs are engendered by a fall in the dollar 
against the ECU compared with the budget rate, the 
Monetary Reserve shall be called up and transfers shall 
be made from the Monetary Reserve to the EAGGF 
Guarantee Section lines affected by the fall in the dollar 
and the necessary own resources shall be called up, in 
accordance with the Decision on own resources and the 
provisions adopted pursuant thereto, to finance the 
corresponding expenditure. 
Any saving made in the EAGGF Guarantee Section 
which has been transferred to the Monetary Reserve in 
accordance with the first paragraph of this Article and 
which remains in the Monetary Reserve shall be 
cancelled and thus contribute to a budgetary surplus 
which shall be counted as a revenue item in succeeding 
budgets. This shall be done by means of a letter of 
amendment during the budgetary procedure concerning 
the budget for the coming year. 
Article 13 
There shall be a franchise of 400 million ECU. Savings 
or additional costs below this amount will not necessitate 
transfers to or from the Monetary Reserve. Savings or 
additional costs above this amount will be paid into or 
met from the Monetary Reserve. 
Other Compulsory Expenditure 
Article 14 
Each year, at the start of the budget procedure, the 
Council shall adopt a reference framework for 
compulsory expenditure other than EAGGF Guarantee 
Section expenditure. The reference framework shall 
include the maximum amounts for both commitment and 
payment appropriations which the Council considers 
necessary with due regard for the Community's legal 
liabilities. 
Non-compulsory Expenditure 
Article 15 
Budgetary discipline for non-compulsory expenditure 
shall operate on the basis of the arrangements contained 
in the joint declaration between Parliament, the Council 
and the Commission. 
Article 16 
The above provisions shall remain in force for the 
duration of the own resources Decision.