NoC170/20 OfficialJournaloftheEuropeanCommunities 21.6.93
OPINIONNo2/93OFTHECOURTOFAUDITORSOFTHEEUROPEANCOMMUNITIES
ontheproposalforaCouncilDecisionconcerningbudgetarydiscipline
(93/C170/02)
alsomakeitpossiblefortheCommunitytoreactmore
promptlytoemergencieswhichcannotbetackledusing
ordinaryappropriations ;
HASADOPTEDTHEFOLLOWING OPINION :
I.EAGGF-GUARANTEE EXPENDITURE
PARTONE
GeneralobservationsTHECOURTOFAUDITORS OFTHEEUROPEAN COM­
MUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle209
thereof,
HavingregardtoCouncilDecision88/377/EECof
24June19880)concerningbudgetarydiscipline,
HavingregardtotheproposalforaCouncilDecisionon
budgetarydisciplinesubmittedbytheCommissionon
17February1993,
HavingregardtotheCouncil'srequest,receivedbythe
CourtofAuditorson12March1993,fortheCourttobe
consultedonthesaidproposal,
WhereastheCourtofAuditorsoftheEuropeanCom­
munitieshasalwaysdeclareditselfinfavourofgreater
budgetarydiscipline;
Whereasithasrecommended initsAnnualReportsthatthe
monthlyearly-warning systembemademoreeffective,in
particularbyimprovingatallcoststheMemberStates'
monthlyestimates (AR1989,paragraph3.7,AR1990,
paragraph3.4etseq.,AR1991,paragraph2.12);
WhereasinitsOpinionNo2/92,whichsupplemented its
AnnualReports,itnotedthat,althoughtotalEAGGF­
Guaranteeexpenditureforthefinancialyears1988to1991
hadremainedbelowtheannualceilings,theCommission
hadmadelittleefforttolimitspendinginexcessof
availableappropriations tothelevelofthechapters,and
thatsuchspendinghadbeenfundedbytransfersofunused
appropriations fromotherbudgetheadings;
WhereastheCourthaspreviouslydrawnattentiontothe
rigiditiesofthebudgetaryproceduresandoftheprovisions
concerningthe'financialperspective,'whichwereatthe
originofcomplexanddebatableproceduresforthe
executionofunforeseenemergencyaidmeasures(2);
whereastheproposaltoenteraprovisioninthebudget
eachyearbywayofareserveforemergencyaidintroduces
amoredirectprocedureintendedtoobviateproblemsof
thiskindinfuture;andwhereassuchaninnovationshouldSettingmaximumannualamountsforthe
purposeofbudgetarydiscipline
1.TheEdinburghEuropeanCouncilagreedthatthe
growthrateandthebaseleveloftheagriculturalguideline
asdefinedinArticles1and2ofCouncilDecision88/377of
24June1988shouldremainunchanged .TheCommission's
proposal,however,modifiesthesetwoarticlesandomits
twoprovisions,namelythedefinitionofGNPandthe
methodforcalculatingtheagriculturalguidelineforthe
followingfinancialyear(s)atthetimeoftheannual
presentationofagriculturalprices.Inordertoavoidthe
ambiguitiesoftheCommission'sdocument,itisproposed
thatthepurportofCouncilDecision88/377of24June
1988beusedwithregardtothesetwopoints.
Theearly-warning systemandmanagement
bybudgetchapter
2.Article5(4)oftheproposalprovidesforthemonitor­
ingofexpendituretobetightenedupandforthestatements
ofexpenditurebychapterpresentedbytheMemberStates
inaccordancewithArticle3(3)ofCommissionRegulation
(EEC)No2776/88of7September1988(3)tobesenttothe
EuropeanParliamentandtheCouncilforinformation .
ThisparagraphshouldbeamendedtoincludetheCourtof
Auditors,whichshouldalsoreceivethesedatapromptly. (!)OJNoL185,15.7.1988,p.29.
(2)AnnualreportoftheCourtofAuditorsconcerningthe
financialyear1991,OJNoC330,15.12.1992,paragraphs
15.4—15.11. (3)OJNoL249,8.9.1988,p.9.

21.6.93 OfficialJournaloftheEuropeanCommunities NoC170/21
appropriations .Thismaybedoneeitherbytransfersfrom
otherbudgettitlesorbymeansofsupplementary budgets.
SuchpossibilitiesdoanywayexistunderCommunitylaw;
totheextentthatthisprovisionleavesthedoorformally
openasregardsthepossibilityofgettingroundthe
obligationtoadoptcorrectivemeasures,itisproposedthat
thisparagraphshouldbedeleted.3.Where,followingtheCommission'sanalysisstipu­
latedinArticle5(5),thereisariskofspendinginexcessof
availableappropriations ,theCommissionisobligedtouse
itsmanagementpowersand,ifthesemeasuresturnoutto
beinsufficient,itmustpresentproposalsforactiontothe
Council,whichhastotakeadecisionwithintwomonths
(Article5(6)).TheobligationontheCommissiontoassess
theimpactoftheproposedmeasuresintermsofthesavings
theymayproduceand,aboveall,thetimerequiredfor
themtotakeeffect(Article5(7))representsatightening-up
ofbudgetarydiscipline.
4.ItisArticle5(8),however,thatconstitutesthe
innovation .ThelastsentenceofArticle6ofCouncil
Decision88/377of24June1988requirestheCounciltoact
withinaperiodoftwomonthstoremedythesituation.The
EuropeanCouncilintroducedadegreeofflexibility,
inasmuchasthereductionofexpendituretothelevelofthe
appropriations allocatedtothechapterhastobeachieved,
wherepossible,bytheendofthefinancialyearinquestion.
5.TheCommissiondevelopsthisthemebyexplicitly
proposingthatthebudgetaryauthorityshouldmakea
transferofappropriations intheeventoftheCommission
andtheCouncilnotbeingabletoremedythesituation.
Giventhatappropriations areavailableunderother
chapters,theCommissionandtheCouncil(actingona
proposalfromtheCommission )arenot,infact,requiredto
makeanenormousefforttotakecorrectivemeasures,asit
isleftuptotheCommissionandtheCouncilthemselvesto
decidewhetheritisimpossibletoremedythesituation
duringthefinancialyear.Thisescapeclausemaytherefore
jeopardizeanyrealdiscipline.
6.Fromthepointofviewofprocedure,Article5(8)
providingforthebudgetaryauthoritytomaketransfers
proposedbytheCommissionmodifiesthesubstanceof
Article104(2)oftheFinancialRegulationapplicabletothe
generalbudgetoftheEuropeanCommunitieswithout
mentioningthefactexplicitly.Asthereisnojustification
fordeviatingfromthisarticle,anamendmentisproposed
inordertoretainthegeneralrulefortransfersof
appropriations whichiscontainedinArticle104(2)ofthe
saidRegulation .
7.Article5(9)allowstheCommissionthepossibilityof
proposing,inverygeneralterms,measurestoincreaseSanctionsinvolvingsuspendingadvances
8.Article12(2)oftheproposalintroducesaninnovation,
whichgivestheCommissionpowertoreduce,oreven
provisionallysuspend,themonthlyadvances,shouldthe
informationforwardedtoitbyaMemberStateappear
inadequate .
9.ThenotionofimposingsanctionsonaMemberStateis
justified.Itisnecessaryinordertomakebudgetary
disciplineworkbetter,becauseunsatisfactoryinformation
providedbyoneMemberStatemayleadtorestrictive
measuresinthemanagementofthemarketwhichare
applicabletoalltheMemberStates.However,thegeneral
natureofthemechanisminquestionwouldseemtocallfor
thedraftingofimplementingproceduresbytheCommis­
sion.
10.InitsAnnualReportconcerningthefinancialyear
1989,theCourtrecommendedthatquantitativeinform­
ationshouldbesubmittedbytheMemberStatesinsupport
oftheirmonthlystatementsofexpenditure (paragraph
3.7).Thedevelopmentofcomputersystemsfacilitatessuch
statements.TheCourtstressesthevalueofintroducinga
mechanismofthissortinasystematicmanner,inorderto
reduceuncertaintyinthefieldoftheMemberStates'
statements .
PARTTWO
Examination oftheindividualarticles
Inthetablebelow,theCourtsetsouttheamendmentsto
theCommission'sproposalwhichwereadumbratedinPart
One.

I.EAGGF-GUARANTEE EXPENDITURE
THECOURT'SPROPOSAL THECOMMISSION 'SPROPOSAL COMMENTS
Article2 Addthefollowingparagraphs :
Paragraph1
Paragraph2Theaimofthisamendment istoretainthesecond
sentenceofArticle2ofCouncilDecision88/377/EEC,
whichiscurrentlyinforce.3.ThestatisticalbasewithregardtoGNPstatistics
referredtoinparagraph2shallcorrespondtothatused
inCouncilDecision88/376/EEC,Euratomof24June
1988(OJL185,15.7.1988,p.24).onthesystemofthe
Communities 'ownresources .
Thisamendmentretainsthepurportofthethird
sentenceofArticle2oftheaforementioned Decision.4.Whenitcomestosubmititsannualprice-fixing
proposals,theCommissionshallcalculatetheagricul­
turalguidelineinaccordancewiththeprovisionsof
paragraph2,subjecttoapossiblereviewwhenit
submitsthepreliminarydraftbudgetforthefollowing
year.NoC170/22 OfficialJournaloftheEuropeanCommunities 21.6.93Article5(4)
TheCourtwantsthisinformationtobemadeavailable
toitpromptly.4.Thestatementsofexpenditurepresentedbythe
MemberStatesinaccordancewithArticle3(3)of
CommissionRegulationNo2776/88(7)shallbesentto
theEuropeanParliamentandtotheCouncilfor
information . ...shallbesenttotheEuropeanParliament,theCouncil
andtheCourtofAuditorsforinformation .
TheCommissionshallsubmitmonthlyreportsthere­
aftertotheEuropeanParliamentandtheCouncilonthe
developmentofactualexpenditureinrelationtothe
indicativeprofiles.

THECOMMISSION 'SPROPOSAL THECOURT'SPROPOSAL COMMENTS
Article104(2)oftheFinancialRegulationshouldbe
compliedwith.Ifitprovesimpossibletoremedythesituationbeforethe
endofthebudgetyear,theCommissionshallpropose
transfersofappropriations withinthemeaningof
Article104(2)oftheFinancialRegulation.Itsproposal
shallbeaccompaniedbyanoteinformingthebudgetary
authorityofdevelopments inthemarketsituation...Article5(8)
8.Ifitprovesimpossibletoremedythesituationbefore
theendofthebudgetyear,thebudgetaryauthority,
actingonaproposalfromtheCommission ,shallmakea
transferasasafeguardmeasure.TheCommissionshall
informthebudgetaryauthorityofdevelopments inthe
marketsituationinthelightofthecorrectivemeasures
adopted,theforeseeablefinancialconsequencesof
whichshallbetakenintoaccountinthebudgetforthe
followingyear.Ifthesemeasuresproveinsufficientfor
restoringthebalanceofthemarketormarkets
concerned,theCommissionshallpresentproposalsto
theCouncildesignedtostrengthentheiraction.
Article5(9)
Thisparagraphissuperfluous :anincreaseinappropri­
ationscanbeproposedtothebudgetaryauthorityat
anytime.9.Incircumstances otherthanthosereferredtoinTobedeleted.
paragraph6,andwithoutprejudicetothespecial
measureswhichmaybetakenfortheoperations
referredtoinparagraph3,theCommissionshall
proposemeasurestoincreasetheappropriationofa
chapterwheneveritisinsufficient .21.6.93 OfficialJournaloftheEuropeanCommunities NoC170/23

NoC170/24 OfficialJournaloftheEuropeanCommunities 21.6.93
II.RESERVESFOREXTERNAL OPERATIONS
Generalobservations
1.WithregardtosectionBl,firstindent,ofthepreamble
totheproposalforaCouncilDecisionconcerning
budgetarydiscipline,theCourtconsidersthatthestate­
ment'tocushiontheincreasedriskbornebythegeneral
budget'couldbemisinterpreted .Therisktothebudget
remainsthatofaccepting100%responsibilitytocoverthe
repaymentofinterestandcapital.2.Article14oftheproposal,whichintroducesa
mechanismwherebytheGuaranteeFund'ssurplusesare
repaidintothebudgetiftheyexceedthetargetamount,
doesnotbelonginthetextofaproposalforaDecision
concerningreserves.Moreover,thismechanismis,infact,
providedforinArticle3,thirdsub-paragraph ,ofthe
proposalforaRegulationestablishingaGuaranteeFund
andinArticle20(6)(a),fourthindent,oftheproposalforan
amendmenttotheFinancialRegulation .Consequently ,for
thesakeoftheinternalconsistencyofthewholelegal
mechanism ,thisArticleshouldberemovedfromthe
proposal.
ThisOpinionwasadoptedbytheCourtofAuditorsinLuxembourgattheCourtmeetingof
22April1993.
FortheCourtofAuditors
AndreJ.MIDDELHOEK
President