NoC68/6 OfficialJournaloftheEuropeanCommunities 11.3.93
II
(PreparatoryActs)
COMMISSION
ProposalforaCouncilDecisionconcerningbudgetarydiscipline
(93/C68/07)
COM(93)20final
(SubmittedbytheCommissionon17February1993)
THECOUNCILOFTHEEUROPEAN COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticles43,209
and235thereof,
HavingregardtotheproposalfromtheCommission ,
HavingregardtotheopinionoftheEuropean
Parliament ,
HavingregardtotheopinionoftheCourtofAuditors,
Whereas,atitsmeetinginEdinburghon11and12
December1992,theEuropeanCouncildecidedtoretain
andstrengthenthebudgetarydisciplineintroducedby
CouncilDecision88/377/EEC(');
WhereasanewInterinstitutional Agreementcontaining
thefinancialperspectivefor1993to1999(hereinafter
referredtoasthe'Interinstitutional Agreement')was
concludedon...betweentheEuropeanParliament,the
CouncilandtheCommissionforthepurposesof
implementingbudgetarydisciplineandofimprovingthe
annualbudgetaryprocedure;
WhereastheEuropeanCouncilalsoagreedtomaintain
thebaseandtherateofincreaseoftheagricultural
guidelineandtoextendittoallexpenditureunderthe
reformedcommonagriculturalpolicyandtosomeother
expenditure ;
Whereastherehavebeendifferinginterpretations ofthe
mechanismssetupbyArticle6ofDecision88/377/EEC
toensurecompliancewiththeagriculturalguideline;
whereastheirscopemustthereforebeclarified;
Whereasthemechanismsforthedepreciationofstocks
formedduringthebudgetyearshouldberetained;
Whereastheannualagriculturalpriceproposalsandany
proposalsforregulationsinvolvingexpenditureunderthe
EAGGFGuaranteeSectionmustcomplywiththelimit
laiddownbytheagriculturalguideline;
Whereasexpenditurearisingfromapplicationof
environmental measuresintheagriculturalsector,theCommunityaidschemeforforestrymeasuresandtheaid
schemeforearlyretirementfromfarmingismultiannual
innature;whereasspecialmonitoringandcontrol
proceduresshouldbeintroducedadaptedtothenature
ofthisexpenditure ;
Whereas,ifthereisariskoftheappropriations ina
givenchapterbeingoverspentasaresultofan
unforeseenchangeininternalsupplyordemand,
correctivemeasuresshouldbetakentoremedythe
situation;
Whereasthecorrectivemeasuresdonotnecessarilyhave
aneffectonthebudgetduringthebudgetyear
concernedandwhereasitmaybenecessaryinsuch
circumstances totakethesafeguardmeasureof
increasingthecorrespondingappropriations bymeansof
transfers;
Whereasevaluationoftheimpactofthecorrective
measuresonthedevelopmentofthemarketsituationwill
helptoensurecontinuityinthecontrolofagricultural
expenditurefromoneyeartothenext;
Whereas,thelevelofEAGGFGuaranteeSectionexpen­
dituremaybeinfluencedbymovementsinthedollar/ecu
marketrateandbycurrencyrealignmentsbetweenthe
MemberStates;whereasamonetaryreserveshould
thereforebeenteredintheformofprovisionalappropri­
ationstobedrawnonshouldtheneedarise;
Whereaswiththegradualimplementation ofthereform
ofthecommonagriculturalpolicy,expenditureislikely
tobelesssensitivetochangesinthedollar/ecurate;
whereasthemonetaryreservecanthereforebereduced
fromECU1billiontoECU500millionfrom1995;
Whereasthequalityandreliabilityoftheparticulars
communicated bytheMemberStatesinconnectionwith
agriculturalexpenditureareessentialfortheproper
operationoftheearlywarningsystemandtheeffec­
tivenessofbudgetarydiscipline;whereasprovision
shouldthereforebemade,whentheserequirementsare
notsatisfied,forthepossibilityofreducingor
provisionallysuspendingthemonthlyadvances,without
prejudicetothepossibilityofreducingorsuspending
theseadvanceswhereMemberStatesfailtocomplywith
therules; (')OJNoL185,15.7.1988,p.29.

11.3.93 OfficialJournaloftheEuropeanCommunities NoC68/7
Whereas,toprovideappropriations fortheGuarantee
FundestablishedbyRegulation(EEC,Euratom)No
.../93areserveforguaranteesonloanstonon-member
countriesandonloansinthosecountriesmustbe
enteredinthebudgetintheformofprovisionalappro­
priations;
Whereasthisreserveisalsousedtocoveractivatedguar­
antees,uptothelimitofitsappropriations ,whenthe
GuaranteeFunddoesnothavesufficientresources;
Whereasafinancialmarginmustbelefttopermitarapid
responsetospecificemergencyaidrequirements in
non-membercountriesresultingfromunforesseeable
events,withprioritybeinggiventohumanitarianoper­
ations;whereasareserveshouldbeenteredinthebudget
forthispurposeintheformofprovisionalappropri­
ations;
Whereastheconditionsforcallinginandmobilizing
fundsshouldbethesameforthemonetaryreserve,the
reserveforloanguaranteesandthereservefor
emergencyaid;
Whereas,forreasonsofclarity,therelevantprovisions
shouldbeconsolidated inoneinstrumentandDecision
88/377/EECshouldaccordinglyberepealed;
Whereasitisnecessarythatexpenditureotherthan
EAGGFGuaranteeexpenditurebesubjecttobudgetary
rigourandplanning,
HASADOPTEDTHISDECISION :
I.EAGGFGUARANTEE EXPENDITURE
Article1
Theagriculturalguideline,whichrepresentsaceilingon
agriculturalexpenditureasdefinedinArticle3foreach
budgetyear,mustberespectedeachyear.Foreach
budgetyear,theCommissionshallmakeaninitial
estimateoftheagriculturalguidelinewhenfixingthe
agriculturalpricesandshalldetermineitsfinallevel
whenestablishingthepreliminarydraftbudget.
Article2
1.Thereferencebasefromwhichtheagricultural
guidelineistobecalculatedshallbeequaltoECU
27500millionenteredfor1988inTitles1and2ofPart
BofSectionIIIofthebudgetlesstheamountsforthat
yearrelatingtothedisposalofACPsugar,foodaid
refundsandpaymentsbyproducersinrespectofthe
leviesprovidedforbythecommonorganizationofthe
sugarmarket.
2.Theagriculturalguidelineforagivenyearshallbe
equaltothereferencebaselaiddowninparagraph 1
plusamountscorresponding to:
—thebasemultipliedby74°/ooftherateofincreasein
GNPbetween1988(baseyear)andtheyearin
question,
—thebasemultipliedbytheGNPdeflatorestimatedby
theCommissionforthesameperiod,—forecastsofexpenditureintheyearinquestionon
disposalofACPsugar,foodaidrefunds,payments
byproducersinrespectofleviesprovidedforbythe
commonorganizationofthesugarmarketandany
otherrevenueraisedfromtheagriculturalsectorin
thefuture.
Article3
1.Theagriculturalguidelineshallcoverexpenditure
chargeabletoTitles1to5ofsubsectionB1ofSection
IIIofthebudgetinthenomenclatureadoptedforthe
1993budget.
2.Eachyearthebudgetshallcontaintheappropri­
ationsnecessaryforfinancingallcostsrelatingtothe
depreciationofstocksformedduringthebudgetyear.
Article4
1.TheCommission'sagriculturalpriceproposalsand
anyotherproposalsforregulationsinvolvingexpenditure
referredtoinArticle3shallbeconsistentwiththelimit
laiddownbytheagriculturalguideline.
2.AnyMemberStatemayasktheCommissionto
evaluatethefinancialconsequencesofanyamendment
whichmaybemadetoaproposalreferredtoin
paragraph 1duringtheCouncil'sdiscussions .The
Councilshallthenbeobligedtopostponeitsdecision
untilitisinformedoftheimpact.
3.IftheCommission considersthattheoutcomeof
theCouncil'sdiscussionsontheseproposalsmaybesuch
thatthecostsspecifiedinitsinitialproposalswillbe
significantlyexceeded,thefinaldecisionshallbetakenat
aspecialCouncilmeeting.
Article5
1.Toensurethattheagriculturalguidelineis
respected,theCommissionshallestablishamonthly
earlywarningandmonitoringsystemforeachchapter
involvingexpenditureofthetypereferredtoinArticle3.
2.Beforethebeginningofeachbudgetyear,the
Commissionshalldefineindicativeprofilesofmonthly
expenditureforeachbudgetchapterbased,where
possible,ontheaveragemonthlyexpenditureofthe
threeprecedingyears.
3.Inviewofitsmultiannualnature,implementation
ofexpenditurearisingfromapplicationofenvironmental
measuresintheagriculturalsector,theCommunityaid
schemeforforestrymeasuresandtheCommunityaid
schemeforearlyretirementfromfarmingshallbesubject
tospecialmonitoringbasedon:
—applicationsmadebypotentialbeneficiariesto
MemberStates,whichshallsendthisinformationto
theCommissioneachmonth,

NoC68/8 OfficialJournaloftheEuropeanCommunities 11.3.93
—individualcommitmentsenteredintoinresponseto
theapplicationsreferredtointhefirstindent,which
theMemberStatesshallsendtotheCommission
everysixmonths.
4.Thestatementsofexpenditurepresentedbythe
MemberStatesinaccordancewithArticle3(3)of
CommissionRegulationNo2776/88(J)shallbesentto
theEuropeanParliamentandtotheCouncilforinfor­
mation.
TheCommissionshallsubmitmonthlyreportsthereafter
totheEuropeanParliamentandtheCouncilonthe
developmentofactualexpenditureinrelationtotheindi­
cativeprofiles.
5.Whenexpenditureunderagivenchaptersignifi­
cantlyexceedstheprofilelaiddown,theCommission
shallanalysethediscrepancy .
Iftheoverrunontheprofileisnotlikelytoleadtoan
overrunontheappropriations forthechapter,no
correctivemeasuresneedbetaken.TheCommission
shallexplaintothebudgetaryauthorityitsreasonsfor
notexpectinganoverrunontheappropriations .
Ifitconcludesthatthereisariskoftheappropriations
forthechapterbeingexceededattheendoftheyear,
theCommission shalldeterminethecausesandevaluate
theforeseeableeffectonthebudget.
6.Wheretheappropriations enteredinthebudgetare
indangerofbeingexceededasaresultofunforeseen
changesininternalsupplyordemand,theCommission
shalltakeactiononthechapterconcerned,usingthe
managementpowersatitsdisposal,includingthoseithas
underthestabilizingmeasures,toremedythesituation.
Ifthesemeasuresareinsufficient,theCommissionshall
presentproposalstotheCouncilforappropriateaction
tocontrolexpenditure ,whichmayincludeproposalsfor
strengtheningthestabilizersintherelevantsector.The
Councilshallactwithintwomonthsofreceivingthe
Commission'sproposalinordertoremedythesituation.
Shoulditfailtotakeadecisionwithinthistimelimit,the
CouncilshallinformtheEuropeanParliamentofthe
reasons .
7.TheCommissionshallevaluatetheimpactofthe
proposedmeasureswithrespecttoboththesavings
whichtheyarelikelytoproduceandthetimerequired
forthemtohavetheirfirsteconomicandbudgetary
effects.Thebudgetaryauthorityshallbeinformedofthis
evaluation .
8.Ifitprovesimpossibletoremedythesituation
beforetheendofthebudgetyear,thebudgetary
authority,actingonaproposalfromtheCommission ,
shallmakeatransferasasafeguardmeasure.The
Commissionshallinformthebudgetaryauthorityofdevelopments inthemarketsituationinthelightofthe
correctivemeasuresadopted,theforeseeablefinancial
consequencesofwhichshallbetakenintoaccountinthe
budgetforthefollowingyear.Ifthesemeasuresprove
insufficientforrestoringthebalanceofthemarketor
marketsconcerned,theCommissionshallpresent
proposalstotheCouncildesignedtostrengthentheir
action.
9.Incircumstances otherthanthosereferredtoin
paragraph6,andwithoutprejudicetothespecial
measureswhichmaybetakenfortheoperationsreferred
toinparagraph3,theCommissionshallpropose
measurestoincreasetheappropriation ofachapter
wheneveritisinsufficient .
Article6
Thedollar/ecurateusedtodrawuptheannualbudget
estimatesoftheexpenditurereferredtoinArticle3for
anygivenyearshallbetheaveragemarketrateoverthe
firstthreemonthsoftheprecedingyear.
Article7
ECU1000millionshallbeenteredinareserveinthe
generalbudgetoftheEuropeanCommunities ,asa
provisiontocover:
—developmentscausedbymovementsinthedollar/ecu
marketrateinrelationtotherateusedinthebudget,
—and,whereapplicable,thecostsarisingfrom
monetaryrealignmentsbetweenMemberStates.
From1995,thereserveshallbereducedtoECU500
million.Theseappropriations shallnotbeincludedinthe
agriculturalguideline .
Article8
BynolaterthantheendofOctobereachyear,the
Commissionshallreporttothebudgetaryauthorityon
theimpactonexpenditurereferredtoinArticle3of
movementsintheaveragedollar/ecumarketrateforthe
periodfrom1Augustoftheprecedingyearto31Julyof
thecurrentyearinrelationtotherateusedinthe
budget,asdefinedinArticle6.
Article9
1.Savingsoradditionalcostsresultingfrom
movementsintherateshallbetreatedinsymmetrical
fashion.Wherethedollarstrengthensagainsttheecu
comparedtotherateusedinthebudget,savingsinthe
GuaranteeSectionofuptoECU1000million(ECU
500millionfrom1995)shallbetransferredtothe
monetaryreserve.Whereadditionalbudgetarycostsare
engenderedbyafallinthedollaragainsttheecu
comparedwiththebudgetrate,themonetaryreserve
shallbedrawnonandtransfersshallbemadefromthe
monetaryreservetotheEAGGFGuaranteeSection (')OJNoL249,8.9.1988,p.9.

11.3.93 OfficialJournaloftheEuropeanCommunities NoC68/9
indicatingevidentmisuseofCommunityfunds,the
Commissionmayreduceorprovisionallysuspendthe
monthlyadvancesafternotifyingtheMemberStatein
questionatleastfivedaysbeforethedecisionandafter
consultingtheEAGGFCommittee .Thisreductionor
suspensionshallbewithoutprejudicetothedecisions
whichwillbetakenaspartoftheclearanceofaccounts.
3.IftheprofiledefinedinArticle2(5)issignificantly
exceeded,theMemberStatesshall,attheCommission's
request,provideanyinformationwhichmayexplainthe
abnormalrateofexpenditure ,includingparticularsabout
thequantitiessubsidized .headingsaffectedbythefallinthedollar.Where
necessary,thesetransfersshallbeproposedatthesame
timeasthereportreferredtoinArticle8.
2.ThereshallbeafranchiseofECU400million.
Savingsoradditionalcostsbelowthisamountarising
fromthemovementsreferredtoinparagraph 1willnot
necessitatetransferstoorfromthemonetaryreserve.
Savingsoradditionalcostsabovethisamountshallbe
paidinto,ormetfrom,themonetaryreserve.The
amountshallbereducedtoECU200millionfrom1995.
Article10
1.Ifitshouldbecomeapparentwhenthebudgetis
beingimplementedthattheagriculturalguidelinecannot
coverthebudgetcostarisingdirectlyfrommonetary
realignmentswithintheEuropeanMonetarySystem,the
monetaryreserveshallbeusedandappropriatetransfers
shallbeproposedwithout,however,compromising full
applicationofArticle9(1).
2.If,inthecircumstancesreferredtoinparagraph 1,
theappropriations availableinthemonetaryreserve
proveinadequate,theCouncilshalltakethenecessary
measures .
Article11
1.Fundsshallbetakenfromthereserveonlyifthe
additionalcostscannotbemetfromthebudgetappropri­
ationstocovertheexpenditurereferredtoinArticle3
(1)fortheyearinquestion.
2.Thenecessaryownresourcesshallbecalledup,in
accordance withCouncilDecision88/376/EEC,
Euratom(l)andtheprovisionsadoptedpursuantthereto,
tofinancethecorresponding expenditure .
3.AnysavingsmadeintheEAGGFGuarantee
Sectionwhichhavebeentransferredtothemonetary
reserveinaccordancewithArticle9(1)andwhich
remaininthemonetaryreserveattheendofthe
financialyearshallbecancelledandthuscontributetoa
budgetarysurpluswhichshallbecountedasarevenue
iteminthebudgetforthecomingyearbymeansofa
letterofamendmenttothatbudget.
Article12
1.PaymentofthemonthlyEAGGFGuarantee
advancesbytheCommissionshallbeeffectedonthe
basisoftheinformationsuppliedbytheMemberStates
inregardtoexpenditureineachchapter.
2.Intheeventofunsatisfactory explanations ,
incorrectorlatenotification ,serioussuspicionsthatthe
rulesarenotbeingcompliedwithandanyothersituationII.RESERVESFOREXTERNAL OPERATIONS
1.ReservetoguaranteeCommunityloansandloanguar­
anteestonon-member countriesandinthosecountries
Article13
Eachyearthecurrent-priceequivalentofECU300
millionat1992pricesshallbeenteredasaprovisionina
reserveinthegeneralbudgetoftheEuropean
Communities .
Thisamountshallbeadjustedtothecorresponding allo­
cationinthefinancialperspectivecontainedinthe
Interinstitutional Agreementifthefinancialperspectiveis
revised.
Thisreserveisintendedtocover:
(a)therequirementsoftheGuaranteeFundsetupby
Regulation(EEC,Euratom)No.../93;and
(b)wherenecessary,activatedguaranteesexceedingthe
amountavailableintheFundsothattheseamounts
maybechargedtothebudget.
Article14
If,attheendofthefinancialyear,theFundexceedsthe
targetamountprovidedforinArticle3ofRegulation
(EEC,Euratom)No.../93,thesurplusshallberepaid
toaspecificheadinginthestatementofrevenueofthe
budgetandshallcontributetoabudgetarysurplus.
2.Reserveforemergencyaid
Article15
Areserveforemergencyaidtonon-membercountries
shallbeenteredeachyearinthegeneralbudgetofthe
EuropeanCommunities asaprovision.Thepurposeof
thisreserveshallbetopermitarapidresponsetospecific
emergencyaidrequirements innon-membercountries
resultingfromunforeseeableevents,withprioritybeing
giventohumanitarianoperations . (')OJNoL185,15.7.1988,p.24.

NoC68/10 OfficialJournaloftheEuropeanCommunities 11.3.93
Theamountsofthisreserveshallbetheequivalent,in
currentpricesforeachfinancialyear,ofthefollowing
amountsexpressedin1992prices:ECU200millionin
1993and1994andECU300millionforeachofthe
financialyearsbetween1995and1999.
Theseamountsshallbeadjustedtothecorresponding
allocationsinthefinancialperspectivecontainedinthe
Interinstitutional Agreementifthefinancialperspectiveis
revised.Theownresourcesnecessaryshallbemadeavailableas
providedinCouncilRegulation(EEC,Euratom)No
1552/89(»).
III.OTHERPROVISIONS
Article18
Budgetarydisciplineinrespectofallotherexpenditure
shallbeappliedonthebasisofthearrangements
containedintheInterinstitutional Agreement .
Article19
Thefinancialimplementation ofanyCouncilDecisionor
anydecisionbytheEuropeanParliamentandthe
Councilexceedingthebudgetappropriations availablein
thegeneralbudgetortheappropriations providedforin
thefinancialperspectivecontainedintheInter­
institutionalAgreementmaynottakeplaceuntilthe
budgethasbeenamendedand,wherenecessary,the
financialperspectiverevisedaccordingtotheprocedure
laiddownforeachofthesecases.
IV.FINALPROVISION
Article20
Decision88/377/EECisherebyrepealed.3.Commonprovisions
Article16
Thereservesshallbeusedbymeansoftransferstothe
budgetheadingsconcernedinaccordancewiththe
provisionsoftheFinancialRegulation .
Article17
Theownresourcesnecessaryforfinancingthereserves
shallnotbecalledinfromtheMemberStatesuntilthe
reservesareusedinaccordancewithArticle16. (')OJNoL155,7.6.1989,p.1.
ProposalforaCouncilRegulation(EEC,Euratom)establishingaGuaranteeFund
(93/C68/08)
COM(93)20final
(SubmittedbytheCommissionon17February1993)
Whereasmechanismscurrentlyexistforhonouring
guaranteeswhentheyareactivated,inparticularby
drawingprovisionallyoncashresources,asprovidedfor
inArticle12ofCouncilRegulationNo1552/89of29
May1989implementing Decision88/376/EEC,
EuratomonthesystemoftheCommunity'sown
resources('),aslastamendedbyRegulation (EEC,
Euratom)No...;
Whereasitisnecessaryforthesemechanismstoberein­
forcedbymakingprovisionsfortheriskofdefault;
Whereasitispossibletomeetthisneedbytheestab­
lishmentofaGuaranteeFundwhichmaybedrawnon
topaytheCommunity'screditorsdirect;
WhereastheGuaranteeFundshouldbeconstitutedby
thegradualpaymentofresources;whereastheFundwillTHECOUNCILOFTHEEUROPEAN COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle235
thereof,
HavingregardtotheTreatyestablishingtheEuropean
AtomicEnergyCommunity ,andinparticularArticle203
thereof,
HavingregardtotheproposalfromtheCommission ,
HavingregardtotheopinionoftheEuropean
Parliament,
HavingregardtotheopinionoftheCourtofAuditors,
WhereastheEuropeanCouncil,meetinginEdinburgh
on11and12December,agreedthataGuaranteeFund
shouldbeestablishedtocoverloanguaranteesto
non-membercountries;
Whereasthegeneralbudgetisexposedtoincreased
financialriskasaresultoftheguaranteescoveringloans
tonon-membercountries; (')OJNoL155,7.6.1989,p.1.