ARCHIVES HISTORIQUES
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DOCUMENTS "COM"
COM(77)96
Vol.1977/0041

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)96 final.
Brussels ,15March1977*
U .Jnirfl"»j **«^Ar>». /*•,./
;i
EUROPEANCOMMUNITIES^ REFLECTIONS BYTHECOMMISSION OFTHEEUROPEAN COMMUNTTIES
ONTHEAPPLICATION OFARTICLES 203/EEC.117/EAECAM)78/ECSC
TAKING INTOACCOUNT THEINTRODUCTION' OF
DIFFERENTIATED APPROPRIATIONS 'i
(Distinction betweenappropriations forcommitment and
appropriations forpayment);
COM(77)96final

REFLECTION BY"THE COMISSION OFTHEEUROPEAN COT&TUTIITIES
QT;THEAPPLICATION OFARTICLES 203/EEC ,117/aAEC AITO 76/ECSC
TAKING HTTP ACCOUM 1THE INTRODUCTION OFDIFFERSbTTIATBD APPROPRIATIONS
(Distinction "between appropriations for commitment and
appropriations forpayment *)
Thenon-compulsory expenditure asdefined byArticle 203oftheEEC
Treaty consisted inpractice of"non-differentiated appropriations "
in1975^.Butsince the1977 Budget itconsists mainly of"differentiated
appropriations "^.
This newtechnical structure inthecomposition ofthe "budget gives rise
tothefollowing questions :
-the determination ofthe assessment "basis ;should the assessment "basis
(basis inthebudget ofyear nforcalculating theincrease ofthe
budget inyear n+1)becalculated onthebasis ofappropriations for
commitment orappropriations forpayment ?
-the application ofthe "maximum rate ";should the "maximum rate "be
used togauge theincrease intheappropriations forcommitment and/or
theappropriations for payment ?
~theapplication ofParl iament 's"margin formanoeuvre ":may Parliament 's
"margin formanoeuvre "beused for increasing appropriations for
commitment and/orappropriations forpayment ?
TheCommission wishes tofind logical andobjective solutions tothese
three questions andpersuade thetwoholders ofbudgetary authority -the
Council andParliament –toadopt them sothat ajoint interpretation may be
arrived at(seeAnnex 1).
Theonly exceptions being Chapter 33(research appropriations )and
Chapter 55(Regional Fund ).
Regulation 7^/919/ECSG ,Euratosn of21December 1976 which hasauthorized
the "differentiation ofappropriations "inthefollowing seven sectors :
(i)theEuropean Social Fund ,(ii)theEuropean .Agricultural Guidance and
Guarantee Fund ,Guidance Section ,(iii)hydrocarbons projects ,(iv)uranium
research ,(v)thesecond data-processing programme ,(vi)thethree-year
plan ofaction onscientific andtechnical information anddocumentation ,
(vii )pilot research tocombat poverty .

-2-
1•rjriB–OYISXOIJS 0?ARTICLE 203/EECANDTHEIRAIM
Inshort,theprovisions ofArticle203/EECwerelaiddowntoattainthe
following objectives :
1.Firstobjective :thetwocategories intheGeneral Budget
Theprovisions ofArticle 203oftheEECTreatyestablish twocategories
ofexpenditure :compulsory expenditure andnon-compulsory expenditure .
(a)compulsory expenditure
Asconcerns thefirst-whichresultsdirectly fromtheTreatyor
fromtheactsadoptedinaccordance therewith -thepowertodecide
whetherornottoenteranappropriation intheBudgetlieswith
theCouncil.Parliament can,however,proposemodifications and
could,inthefinalanalysis ,rejectthebudget.
(b)non-compulsory expenditure
Ontheotherhand,asfarasnon-compulsory expenditure isconcerned ,
thefinaldecision overwhetherornottoenteranappropriation
lieswiththeParliament ,eventhoughspecific provisions -adopted
bythelegislative authority ,i.e.theCouncil–oftenlaydownthe
conditions forusingtheseappropriations (e.g.theSocialPond).
Thebudgetary procedure inrespectofnon–compulsory expenditure thus
leadstoagenuinepolitical decision .
Thisdecisionistheresultofadelicate andnegotiated balanceof
thepowerssharedbythetwoholdersofbudgetary authority .Although
thereisatendency tosimplify theissuebyclaiming thatParliament
hasthelastwordonnon-compulsory expenditure ,thisisonlypartly
trueastheexercise ofthesepowersisfarmorecomplicated in
practice andintheory.

Itshouldalsobenctedin•thisconnection that,inpractice ,the
divisionofthebudgetintocompulsory andnon-compulsory expenditure
resulted fromapragmatic approach .
2•Secondobjective :thenormaldevelopment ofnon-compulsory
"expenditure islimitedbythe"maximumrate"
TheauthorsofArticle 203oftheESCTreatywishedtocontrolthe
development ofnon-compulsory expenditure .Theytherefore created
the"maximumrate"systemtolinkanyincrease inthisexpenditure in
theCommunity budgetwiththegrowthofCommunity GUPandnational
budgets.The"maximumrate"isnotsimplyindexation basedonthe
increaseinthecostofliving,butismoredynamicasittakesaccount
oftheincreaseinGEKPandnational budgets.
Thedrawbacktothe"maximumrate"systemisthattheCommunity Budget
which,bydefinition ,isnotinastateofrestsincetheCommunity's
roleisoneofdevelopment –issolinkedwithGHPandnational budgets
3.Thirdobjective :the"margin"-Parliament 'sexclusive power
Iftheincrease innon-compulsory expenditure fromonefinancial
yeartothenextremainswithinthelimitsofthe"maximumrate",
Parliament exercises itspowertofixthisexpenditure definitively ,
perhapsamending theallocation tothevariousbudgetheadings
contained inthedraftbudget.
TheauthorsofArticle 203oftheEECTreatyalsowishedtoconfer
uponParliament anexclusive righttoincrease expenditure byanamount
corresponding toone-half ofthe"maximumrate".Thisis,onthe
basisofthepolitical experience ofrecentbudgetary procedure ,
Parliament 's"marginformanoeuvre".

-4-
4,Fourth objective :the ".joint agreement "procedure forincreasing
r,on-connrulscry oy.oenditure "beyond the levels provided forbythe
"maxir.-ium rate "and the "margin for manoeuvre "
Theauthors ofArticle 203oftheEECTreaty ,realizing that theincrease
intheCommunity Budget could gobeyond thelevels provided forbythe
"maximum rate "and "margin formanoeuvre ",laid down that thefigure
could beexceeded provided that agreement isreached between Parliament
andCouncil .Itisimportant tostress that while theoriginal wording
ofArticle 203provided forthefigure tobeexceeded only in"exceptional
cases ",this restriction nolonger features inthecurrent Article 203
asamended bytheTreaty of22July 1975 *Useofthis provision is
thus recognized asapossible outcome ofanormal requirement arising
from theneed toincrease theCommunity Budget .
Following this brief examination oftheaims ofArticle 203 ,thefollowing
twoconclusions maybedrawn ;their technical significance will be
discussed ingreater detail below .
-first ofall ,this Article aims atrestricting theincrease of
non-compulsory expenditure ;
-secondly ,Parliament hastheexclusive right todecide upon part
ofthe increase under its "margin formanoeuvre ".
II.THE INCREASE OF"NOIT-COMPULSOHY EXPENDITURE "AND EXERCISE OF
BUDGETARY POWERS
Theobjectives ofArticle 203oftheEECTreaty having thus been clarified ,
the significance that must beattached tothe increase innon-compulsory
expenditure must now beestablished .This problem didnot arise inthe
past when thebudget consisted exclusively ofnon-differentiated
appropriations (appropriations forcommitment identical with appropriations
forpayment ).Itdoes arise nowin1977 asmost non-compulsory expenditure
isnow accounted forbydifferentiated appropriations .Thequestion is
therefore whether the increase innon-compulsory expenditure constitutes
anincrease inappropriations forcommitment orinappropriations for
payment .

-5-
Toanswerthisquestion ,itisusefultofollowthehistorical development
ofthelastthreebudgets (1975»1976and1977)preceding thenew
situation represented "bythebudgetofthecurrentfinancial yearandto
drawanumberofobjective conclusions fromthisstudy.
1.Thesituation withrespectto1975and1976
(a)Theestablishment 975Budget
Determination ofthe_1974assessmentjaasis
Article203oftheEECTreatyfirsttookeffectwhenthebudgetforthe
1975financial yearwasestablished .Thereference budgetatthis
timewasthe1974Budgetsthisbudgetcontained only"non-differentiated
appropriations "(i.e.theappropriations servingatoneandthesame
timetoenterintolegalcommitments andtocovertheresultingexpenditure^thiswastruewithoneexception-theresearchappropriations (Chapter33).
Annex1showsthe"assessment basis"ofnon-compulsory expenditure in1974
thatwasusedasthebasisforcalculating themaximumrate,andthusof
determining thepotential increaseinthe1975Budget,asagainstthat
of1974.
Itshouldbepointedoutthatthe1974assessment basiswashomogeneous ,
withtheexception mentioned above-whichhadnotthenbeenobserved .
However,thisexception wasnotverystrikingastheresearchappropriations
werecontained inanannextotheCommission sectionoftheBudgetandthe
appropriations forcommitment appearedformallyonlyinthisannexandin
practicepassedunrecognized intheCommission Budget(SectionIII);
Calculation oftheincreasebetween 1974j3-nd =J975andparlxamentj_s_u.se
of~the""margin formanoeuvre
Thecalculation oftheincrease gaverisetonoparticular proolems.
Annex1indicates theincreaseinthebudgetbetween 1974and.1975*The
following conclusions maybedrawns
1Theappropriations fortheRegional Fundwerenotmadeavailableuntil
thefirstSupplementary Budgetof1975»published on29April1975*

_6-
-theincrease remainedslightly "belowthelimitsallowedbythe
Trf.ri;m;arate(14*6$)andParliament's"marginformanoeuvre "(which
amounted "to53150471u.a.),nottakingtheRegional Fundinto
consideraxion:
-the"marginformanoeuvre "itselfwasusedtoincrease expenditure
by47U9105u.a.:
-theappropriations fortheRegional Fundadoptedinthefirst
Supplementary Budgetwerethesubjectofanadhocagreement ,
CouncilandParliament being,asiswellknown,unabletoagree
onthefinalclassification tobegiventothisexpenditure :however,
astheappropriations forcommitment undertheRegional Fondhad
alreadybeendecideduponforathree–yearperiodbymeansof
Regulations ,entryintothebudgetwasreducedsimplytothetechnical
aspectoftheappropriations forpayment ,whichgaverisetonoreal
problems inpractice ;
-tosumup,theadoption ofthe1975Budget-boththeGeneralBudget
andSupplementary Budgets –didnotrequireformalrecourse tothe
"newrate"procedure (providedforbytheprovisions ofthefifth
sub-paragraph ofArticle203(8).
(b)Theestablishment ofthe1976Budget
Determination of_the1975assessment basis
Annex2showsthe"assessment basis"for1975«The1975 1976
financial yearswerehomogeneous asdifferentiated appropriations
occurredinonlytwosectors (researchappropriations andtheRegional
Fund).
Calculation oftheincrease between 1975an<!1976andParliament 's
useoftSemarginformanoeuvre –––___________
Annex2alsorecordstheincreaseinnon-compulsory expenditure and
Parliament 'suseofthemarginformanoeuvre .
Itshouldbenotedherethataspecialeventtookplaceunnoticed .
Parliament restoredalltheresearchappropriations forcommitment .

-7-
Tosumup,theestablishment ofthe 1976 Budget involved application of
alltheprovisions ofArticle 203including that provided for inthefifth
sub–paragraph ofArticle 203 (8)(shared decision –making procedure where
recourse ismade tothe "newrate").
AsAnnex 2shows :
-non-compulsory expenditure increased by38.43% (or "by27.88% ifthe
Regional Fund iscounted ascompulsory expenditure )wien thegeneral
Budget wasadopted .These figures increased by44.28' /'r;.nd34.73%
respectively under thefirst Supplementary Budget for1976 (Friuli );
-Parliament had a"margin ofmanoeuvre "ofaround 72.6million u.a .
(equivalent tobetween 78*4 million u.a .with theRegional Fund as
non-compulsory expenditure and66.9 million u.a.with theRegional Fund as
compulsory expenditure );
-asParliament approved amendments amounting to102.9 million u.a .when
adopting thebudget andthus exceeded its "margin ofmanoeuvre ",the
shared decision –making procedure (fifth sub–paragraph ofArticle 203(8 ))
wasapplied for thefirst time .Because ofthedisagreement -between
Parliament andCouncil onhowtoclassify theRegional Fur^d ,the "newrate "
could notbefixed definitively (asthis rate was27.88% fortheCouncil
and38.43% forParliament ). Theshared decision –making procedure was
therefore applied without anyformal mention ofthe "new rate ".
(c)Inconclusion ,forthe1975 1976 Budgets :
-theassessment basis consisted inpractice ofnon–differentiated
appropriations only ;
-theonly twoexceptions (research andtheRegional Fund )didnotinpractice
change thehomogeneity ofthesystem because ofthenature ofthese two
chapters ofthebudget .
2.Theradical change represented bythe Bidget forthe 1977 financial year
TheBudget forthe 1977 financial year was significantly different from that
of1976 .Inaccordance with theRegulation adopted forthis purpose it
involved much greater usethan hitherto ofdifferentiated appiopriations .

-8-
Itmayalso beconsidered that ,iftheoperating appropriations (Titles 1
and 2ofthetulget )araignored ,this system isvery suitable forapplication
tomost ofthe firaxicic.l intervention measures contained inthe budget
(excluding theEAGGF Ou^rantse Section ). This presentation ofthe
appropriations isthenormal system fortheoperating appropriations inthe
General Budget ,inrespect ofwhich payments arespread over several
financial years .
Annex 3records thecomposition ofthenon-compulsory expenditure for 1977 *
Itbecomes clear that "differentiated appropriations "now exceed the
non-differentiated appropriations . "Differentation "isthus tending to
become thegeneral rule because oftheneed foraccurate forecasting and
payment oftheappropriations fortheoperational activities .
Itistherefore essential tobeaware ofthis new situation ,which is
likely tobecome more pronounced infuture ,anddraw objective conclusions
from this inorder tointerpret Article 203oftheEECTreaty tothebest
possible advantage .
Annex 4contains allthedata forassessing the increase innon-compulsory
expenditure inthe 1977 Budget compared with the1976 Budget .
Thefollowing facts emerge :
–thechangeover from abudget containing mainly "non-differentiated
appropriations "(1976 )"toonecontaining mostly "differentiated appropriations "
(1977 )hasmade comparison very difficult ;
–limiting this toapurely formal comparison (the"formal "approach ),it
will befound that non–compulsory expenditure hasdropped by4.90% (orby
14.63% iftheRegional Fund isconsidered ascompulsory expenditure ). But
this approach iswrong asitcompares elements that cannot becompared (the
"non-differentiated appropriations "of1976 arecompared with the
"appropriations "forpayment of1977 );
–if,however ,a"real "approach isadopted ,itwill befound that there isan
increase of30.74% (orof30.08% iftheRegional Fund isconsidered as
compulsory expenditure ).Inpractice ,the"newrate"procedure may
therefore beapplied ;

-9-
-in"thesecircumstances ,theCouncilestimated the"marginformanoeuvre "
pragmatically at120millionu.a.+7»5millionu.a.forcertainnewoperations ,
or127.5millionu.a.inall.
Parliament finallyapproved 140millionu.a.,exceeding itsmarginformanoeuvre
"byaround12millionu.a*
Thefinaladoption ofthebudget "byParliament didnottakeplaceformally
inaccordance withtheprovisions ofthefifthsub–paragraph ofArticle203(8);
inpractice ,theconcerted actionbytheCouncilandParliament on
14December maybeconsidered asreplacing theshareddecision–making
procedure .
3.Thefactstobenoted
TheCommission considers thatthefollowing factscommandattention .
(a)thenatureoftheappropriation forcommitment
Anappropriation forcommitment maybedefinedasanannualauthorization
tocovertheconductofoperations forwhichpaymentisspreadoverseveral
financial years.Anappropriation forcommitment hasthefollowing
characteristics :
(al)itisanannualappropriation :itmustbeusedinthecourseofthe
budgetary yearforwhichitismadeavailable .Anypartofthe
appropriation thathasnotbeencommitted bytheendofthefinancial
yeariscancelled (apartfrominexceptional cases),
(a2)theappropriation forcommitment istherealbudgetary instrument which
enablesanoperation tobelaunched andthecorresponding legalobligation
tobeenteredinto.Thebudgetary authority andcontrol musttherefore
firstofallconcentrate theirattention ontheappropriation for
commitment whichistheexpression ofthefinancial scaleoftheoperation
inquestion ;
(a3)theonlydifference betweenthetraditional "non-differentiated
appropriation "andthe"differentiated appropriation "liesinthefact
that,whereasthenon–differentiated appropriation iscommitted forone
yearandperhapspaidintwo(one–yearcarryover system),the
differentiated appropriation iscommitted duringtheyearandinvolves
payments beyondthesecondyear.
Undertheproposalforamendments totheFinancial Regulation putforwardby
theCommission on19Ifey1976andapproved byParliament on14December 1976.

Thus ,wesee that :
–the "non-differentiated appropriation "and the "differentiated
appropriation "are identical onthecommitment level ;
–ontheother hand -,thedifferentiated appropriation requires alonger
payment period because ofthemore protracted nature oftheoperations
for which itisintended .
Properly speaking ,there isthus nodifference ofnature "between
differentiated andnon–differentiated appropriations ,"butsolely adifference
intherespective periods ofpayment .This isa "basic factor ,asitmeans that
the non-differentiated appropriation isidentical with the appropriation for
commitment asregards thefinancial effect oftheauthorization (theentering
into thebudget oftheappropriation )decided upon bythebudgetary authority ;
(b)theimportance ofthetimetable
Theappropriations forcommitment arenecessarily accompanied inthebudget
byatiini-ir.'ble which indicates fheexpected pattern intime ofthecorresponding
appropriations forpayment . Itsnould benoted that :
–thebasic decision ofthebudgetary authority istomake available an
appropriation forcommitment ;
–themaking available oftheappropriation forpayment will flow from the
amount adopted asanappropriation forcommitment andtheknown orexpected
pattern ofthepayments ;
(c)thesignificance oftheappropriation forpayment
Theappropriation forpayment isanineluctable corollary totheappropriation
for commitment .This does not mean ofcourse that thebudgetary authority
should nolonger pay anyattention tothe appropriations forpayment ;onthe
contrary ,theappropriations forpayment –thetotal ofwhich corresponds tothe
estimated amount ofrevenue inaccordance with theprinciple ofbalancing the
budget –given the figure fixed for theappropriation for commitment .

-11-
Beforefixingtheappropriation forcommitment ,thebudgetary authority will
therefore takeaccountofthefinancial consequences involved ^i.e.the
timetable fortheappropriations forpayment,butoncetheappropriation for
commitment isauthorized ,theappropriation forpaymentbecomesineluctable .
Theappropriation forcommitment isthusthecauseandtheappropriation for
paymentitseffect.
(d)thepatternofgrowthintimeoftheappropriations forcommitment andthe
appropriations forpaymentinthebudgetheadings containing
non-differentiated appropriations
Theestablishment oftheBudgetforthe1977financial yearexhibits anumberof
strikingdifferences betweentheappropriations forcommitment andthe
appropriations forpaymentincomparison withthenon-differentiated
appropriations ofthepreviousfinancial year(theSocialFundmaybe
mentioned bywayofexample^).Thiscontrastishoweverexceptional andis
causedbythechangeover toanewsystem.Theappropriations forcommitment
areenteredintothebudgetatasomewhatearlierdatethanthecorresponding
appropriations forpayment;afterafewyears(probably twoorthree)acertain
degreeofparallelism willsetinbetween commitments andpayments .Inthe
finalanalysis ,intheprocessofexecuting theBudget,theamountssetaside
forcommitments willtendtoequalthosesetasideforpayments ,although the
profilefortheamountsenteredintheBudgetwillvaryfromheadingto
heading.
Annex5showstheamountofappropriations forcommitment andappropriations
forpaymentsince1974«Butthisannexisnotconclusive becauseofthe
shortperiodduringwhichdifferentiated appropriations havefeatured inthe
GeneralBudget;inpractice,1977isreallythefirstyear.
2Annex6,whichrecordstheresearchappropriations between1958andthepresent,
wasdrawnuptoprovideaclearerpictureofthedevelopment ofthe
appropriations forcommitment andtheappropriations forpayment:thegraph
contained inAnnex6clearlyshowstherespective growthintheseappropriations .
Ignoringtheappropriation forcommitment inthe1976financialyear-which,asstatedabove,wasatemporary phenomenon-thereisaclearparallelism ofthe
curvesofgrowthfortheappropriations forcommitment andthoseforpayment,
althoughtheyexhibit"highs"and"lows"whichwill'ultimately balanceeachotherout.
Appropriations forpaymentdroppedfrom441millionu.a.to172.44millionu.a.
whilethebudgetary authority agreedtoanincreaseof98millionu.a.inthe
gappropriations forcommitment .
TheformerEuratomResearchBudget(1958-1970 )whichbecameChapter33of
SectionIIIin1971.

-12-
(e)thesconeofthe"maximumrate"
Asbrieflystatedabove,the"maximumrate"isnotastaticstandard
representing simplyamethodofindexation .Onthecontrary ,ithasa
dynamicnature,asitmakesdueallowance fortheincrease inGUPandnational
budgets.
Itmaytherefore beconsidered thatthemaximumrateisappliedtothe
appropriations forcommitment –whichexpressthetrueamountenteredinto
thebudget-totheextentthatentryintothebudgetrepresents authority
tostartanoperation whichhasafixedfinancial effect.
χ
X X
Annex7sumsupthemaindataconcerning thedevelopment ofnon–compulsory
expenditure between 1974and1977*
III.THECOMMISSION 'SPROPOSALS FORTHEPROCEDURE TOBEUSEDINFUTURE
TheCommission believes thatthefollowing conclusions maybedrawnfromthe
factslistedabove:
1.the"maximumrate"isintendedtomeasuretheincrease intheappropriationsforcommitment andthenon-different iateaappropriations intnefinancial
yearn+1comparedwiththefinancial yearn;
2.theassessment basisforthefinancial yearnistobecalculated onthe
basisoftheappropriations forcommitment andthedifferentiated
appropriations.
However,theassessment basisforthe1977financial year(transitional
financial year)istobefixedaccording tospecialprocedure «

-13-
3.Parliament 1s"margin formanoeuvre "must "beused fortheappropriations for
co.mitrncnt and .thenon-differentiated appropriations ,since these aretheappropriations
that express theactual financial consequences ofthe "budget decision ;
4.anycomparison between thebudget offinancial year nandthat ofthefinancial
year n+1forthepurpose ofapplying theprocedures laid down inArticle 203of
theEECTreaty (calculation oftheincrease corresponding tothe"maximum rate",
determination ofthe "margin formanoeuvre ",recourse tothe "newrate")is "based
ontheappropriations forcommitment andthenon-differentiated appropriations ;
5.thedetermination ofappropriations forpayment ,under headings containing
differentiated appropriations ,iscarried outinthelight particularly ofthe
corresponding timetables forprevious budgets andofobjective andgeneral
criteria }
6.when "differentiated appropriations "areentered into thebudget under aheading
which previously contained "non-differentiated appropriations ",theCommission
provides thedata necessary forobjectively comparing financial year nandfinancial
.yearn+1foranydesired purposes (calculation oftheassessment basis ,therate
ofincrease ,the "margin formanoeuvre ",etc.).
IV.iTEU OPERATIONS AZTD COITCEPTATIOIT BETVIEEM THEHOLDERS OFTHE BUDGET AUTHORITY
1.Launching new operations involving ofnon-compulsory expenditure
During recent budget procedures ,theopening ofcertain headings ,decided
bytheParliament exercising itspowers inrespect ofnon-compulsory
expenditure ,hassometimes given rise toproblems with theCouncil ,as
thelegislative authority .Inturn ,theCommission ,responsible for
implementing thebudget ,hasexperienced certain difficulties byreason
ofthedivergent attitudes oftheParliament andtheCouncil onthematter .
'The Commission therefore considers that itwould behighly desirable to
prevent such difficulties from arising inthefuture ,intheinterests :of
greater harmony between theInstitutions andofcreating better conditions
forimplementing thebudget .
Tothat end theCommission considers that thethree institutions involved
should seek ways andmeans ofresolving theproblem ofexpressing new
action projects intheBudget .

-14-
2.Concertation procédure
Finally ,theconcertation procedure BetweentheCouncilandtheParliament -
restricted totwostagesforthe1975and1376 "budgets,i.e.thefirstand
secondreadings "bytheCouncil-must "beaccompanied (ashashappenedforthefirsttimeinrespectofthe1977 "budget)byathirdphaseofconcertation
"betweentheParliament andtheCouncilatthesecondreading "bythe.Parliament
"beforethefinaladoption .
TheCommission therefore suggeststhatthethirdphaseofconcertation ,tried
outforthe1977 "budget,should "becomestandardpractice .
V.CONCLUSIONS
TheCommission suggeststhattheguidelines setoutinItemIIIabovebegiven
consideration bytheInstitutions involved sothatagreement maybereached.
IntheCommission 'sview,suchagreement mightbeexpressed inajointdeclaration .

INCREASE IN"NON-COMPULSORY EXPENDITURE "FROM1974TO1975
ANDPARLIAMENT 1SUSEOPTHE"MARGIN FORMANOEUVRE "inu.a.
1974assessment "basis Non-compulsorv expenditure 1975
728088652Initial "budget
Firstsupplementary "budget(Regional Fund)
Secondsupplementary "budget(Researchappropriations )
Thirdsupplementary budget(Researchappropriations )
Thirdsupplementary "budget(Aidto"bee-keepers )867931636
150000000
1315000
3160000
2500000
1024906636=+296817984
VJ1
I
The"maximumrate"was14.6%
Parliament'smarginformanoeuvre was7«3*f°i728088652x14*6/0=106300943
728088652x7.3$=53150471
Theincreaseinnon-compulsory expenditure between 1;74and1975maybebrokendownasfollows :
(a)increaseacceptedbytheCouncil
(b)Parliament'sinitialuseofthemarginformanoeuvre
(c)Thirdsupplementary budget:research (appropriations forpayment)
beekeepers *
(d)RegionalFund(appropriation forpayment)
*tobeaddedtoPorliaicnt's"marginformanoeuvre"+94493879(=12.97/.fromapossiWe£c>tal
+45349105(fromapossibletotal§£''.
.AAHcnnr\ 'ill/000.00075
+1/6817y3.4
150000000
29681792^

INCREASE -INNON-COMPULSORY EXPENDITURE FROM1975TO1976
ANDPARLIAMENT 'SUS30?THE"MARGIN FORKANOEUVRT?'
mu.a.
A.SUMMARY OFTHEPROGRESS OFNCEDURING THEBUDGETARY PROCEDURE
Assessment "basisDraft "budgetDraftamended Draftamended Pariiament'sdecision Firstsupplement arv
1.ERDF(nee)
2.ERDF(ce)1975oy
Parliament•1/Council 3/12
1024906636 131603950316374963671406618066
=+28.41$ =+59.77/°=*37.24/°
874906636 101603950311874963671106618066
«+16.1: +35.73% -+26.(initial "budget)
1418811367
=+38.43$
1118811367
*»+27•88$budget(Friuli)
1478811367
=+44.28$
1178811367
=+34.73$
B.REMINDER OFPARLIAMENT 'S"MARGIN FORMANOEUVRE "
1.RF(nee)=1024906636(assessment basis):"marginformanoeuvre "=15.3$=7*65$=78405358
2
2.RF(ce)=874906636(assessment basis):"marginformanoeuvre "=15»3$=7*65$=66930358
2
C.PARLIAMENT 'SUSEOFTHE"MARGIN FORMANOEUVRE "
1.Onthefirstreading,Parliament increased theCouncil'sdraft(seeA1,above)by:+3215^5301
2.Ofthe321585301u.a.,theCouncilaccepted ,atthesecondreadingon3December ,only:+90707000
3.On18DecemberParliament increasedthis90707000u.a.to: +102900301
NB.Thebracketforthe"marginformanoeuvre"was<gg^oranaverageofaround72.6
Parliament increased expenditure by102.9millionu.a.:however,thisappropriation includes 30millionu.a.for
researchforwhichtheCouncilwasresponsible .Thus,102.9-30=72.9BBB
Parliament thususedallits"marginformanoeuvre "(=bracketaverage).

Non-compulsory expenditure enteredintothe1977 "budget inu.a.
Non-differentiated appropriations -f
appropriations forcommitment
I*Non-differentiated appropriations
TITLE1(Expenditure relatingtopersons 247
workingwiththeinstitution )
TITLE2(Buildings ,equipment andmiscellaneous
administrative expenditure ) 116
TITLE3(Operating expenditure ) 30
TITLE5(SocialandRegionalfunds) 5
TITLE9(Expenditure oncooperation with 58
thedeveloping countries and
nonr-member countries )
TITLE10(Otherexpenditure ) 4
OtherInstitutions 148247877100
943840
842500
000000116943840
30842500
5000000
58102200
000000
099329Non-differentiated appropriations +
appropriations forpayment
■frTiBV^-n -i-V:i 4i,ii-■-
I.Non-differentiated appropriations
TITLE1 247877100
TITLE2
TITLE3
TITLE5
TITLE9
TITLE10
OtherInstitutions
610864969116943840
30842500
5000000
58102200
4000.000
148099329
610864969
II.sDifferentiated appropriations (=appropriations
forcommitment )
TITLE3 TITLE3
306(Actiontocombatpoverty) 3500000 306 1170000^
3200(Community technological development 50000000 3200 23000000
projects)

3201(Jointprojectsinprospecting 25000000
forhydrocarbons )
321(Prospection foruraniumdeposits) 5000000
33(Researchandinvestment activities )213260197
3620(Planforthree-year project) 2650000
3621(Activities supplementary tothethree-65O000
yearproject)
3701(Secondprogrammeinthedata^-processing 9000000
sector)
TITLE5:
SocialFund 617100000
Régional Fund 500000000
1426160197
2037025166
Amountcorresponding tore-entries .
Including 8millionu*a«corresponding tore–entries.3201 9000000
321 2000000
33 183337388
3620 1250000
3621 500000
3701 2835800
TITLE5:
SocialFund 172440000"^
Régional Fund 400000000
795533188
1406398157

-18- ANKEX4
IHCREASEII'HOH-COMPULSORY EXPENDITURE "FROM1976TO1977
AM)THEEP'SQBEOFTHE"MABOIH FORMANOEUVRE "
inu.a.
I.CQMPARISOH 1976-77
Aaaaaaaantbaaia1976
1.ERDF(ne»)1478811367^1977Budget
FORMALAPPROACH 1406398157--72413210
90*)
O990
74*)(-4.90*)
REALAPPROACH 1933362357'-+454550990
(+30.1B"8MARQIN PORMANOEUVRE
(maximumratefor1977-17.3%)
17.351I2-8.65**1478811367
-127917183
FORMALAPPROACH 1066398157--172413210
<T (-14.6354)(-14.63*)
REALAPPROACH 1533362357-+354550990
(+30.08$),17.3*ι2-8.65*χ117β611367
-101967183
II.IHCREASE 1976-77
AtfirstreadingParliament increased the
Oounolldraftbyi
A*DraftbudgetadoptedbytheCounoilatfirst
reading(takingaooountofthefirstletter
ofamendments +30millionu.a.to
Artiole930)
B.Amendments aooepted.by theCouncil onthe
secondreading (23.11)
-Commission budget
-Parliament budget
TOTALB
C.Amendments aooaptad bythaEPataaoond
raading(16.12)
A♦B+CFormaiapproaoh
+_218488131Realapproaoh
1337732086
+10092331
+10487940*comparad with
1976aaaaaamant
basis
1787678086
+52796331
+10487940*oonparad with
1976asaaasMnt
basla
-9.54* ♦20.89*
+20580271 +1.39* +63284271 +4.2Θ*
+48085800 ♦3.25* +82400000 +5.57*
1406398157--4.90* 1933362357•+30.74*
III.PARLIAMENT 'SUSEOFTHE"MARGIN FORMANOEUVRE "
Parliaments "marginformanoeuvre "waswithintherangeof102.0-127.9 ,corresponding to
anarithmetic averageofsome115millionu.a.Inviewoftheproblems causedbythe
changeover between1976and1977andthedifficulties ofcomparison ,theCouncil
oonBidered attheseoondreading on23November 1976thatParliaments "marginTormanoeuvre "shouldamounttosome
120millionu.a.plusexpenditure arisingfromamendments tonewoperations (estimated at7*5Billionu.a.).Hie
totalwouldthusbesome128millionu.a.,itbeingunderstood thatthisamountwouldbeappliedtonon-differentiated
appropriations andappropriations foroommitment .
WhenthebudgetwasfinallyadoptedbyParliament on16Deoember 1976,andfollowing afinalmeetingofoonoertatlon
betweentheCounoilandaParliament delegation on14December 1976,Parliament finally madeuseof140millionu.a..
Takingaooountoftheobjeotive reasoning basedonthe"realapproaoh",Parliament thusi
(a)usedallits"marginformanoeuvre "(pragmatioally fixedat128millionu.a.)
(b)exoeededby12millionu.a.its"marginformanoeuvre "whichmeansinpraotioe-evenifthishasnotbeen
formally oonfirmed -thatthe1977Budgetwasfinallyadoptedinaccordance withtheprovisions ofthefifth
sub-paragraph ofArticle203(8)(shareddecision-making ).
nilsapproaohreflectstheformaloomparison betweentheappropriations forpaymentin1976andthosefor1977•*
setoutinthe1976and1977Budgets.
Thisapproachisofaformalnatureastheappropriations for1976oarmotbecomparedobjectively ,astheyare,with
thosefor1977sincethe1977Budgetmakesgreateruseofthedistinction betweenappropriations forcommitment and
appropriations forpaymentthanaidthe1976Budget. Asaresult,theappropriations forpsymentin1977cannot
beoompareddirectly withthosefor1976.
2Thisapproaoh permitscomparison betweentheappropriations for1977endthosefor1976.Thisapproaoh hasbeenmade
onthefollowing basis!
(a)theappropriations forcommitment in1977*reconsidered asnon-differentiated appropriations !
(b)theappropriations forChapters 33and55oorrespnd totheformalappropriations forpayment }
(o)thepastsystemhasbeenreconstituted fortheSocialFluids
-appropriations foroommitment -appropriations forthefinanoial year+authorisations foroommltment
-appropriations forpayment «appropriations forthefinancial year.

DEVELOPMENT ONTHEASSESSMENT BASISSINCE1974 mu.a.
Assessment ofappropriations forcommitment Assessment ofappropriations forpayment
(non-differentiated appropriations +
appropriations forcommitment )(non-differentiated appropriations +
appropriations forpayment)
1974 8815368951 728088652
1975 134649019421024906636
1976 192086211131478811367
1977 203702516641406398157
Theappropriations forcommitment toChapter33(researchandinvestment )are77556162u.a.andtheauthorizations
forcommitment forChapters 50and51(SocialFund)are160000000u.a.
2
Theappropriations forcommitment toChapter33are72814356u.a.andtotheRegionalFund300millionu.a.;theauthorizations forcommitment totheSocialFundare200millionu.a.
3Theappropriations forcommitmenttoChapter33are299233270u.a.andtotheRegionalFund500millionu.a.;
theauthorizations forcommitment totheSocialFundare225millionu.a.
WhilethefiguresforI974and.1975correspond towholeappropriation forthefinancialyearplustheauthorizationsforcommitment (itisnotpossibletofreetheappropriations forthefinancialyearfromtheproportion chargedwith
thecommitments undertaken inpreviousfinancialyears)thefinalclearance wasconductedfor1976.
4rm • «Theappropriations forcommitment toChapter33are213260197u.a.,totheSocialFund617100000u.a.andtothe
Regional Fund500000000u.a.

-20-AÏJNEX6/1
RESEARCH ANDINVESTMENT BUDGET
ïmu.a.
s
Appropriations Appropriations
forcommitment forpayment
1953 50C0000 3000,003
1959 55000000 23500COO
i960 50330000 34730000
1961 85050000 52850eoo
1962 '71443200 567312CO
1963 95836000 75375C00
1964 94720000 85000 COO
1965 83,334,000 87-500CO
i960 90587000 115302eoo
1967 93118.000 117441000
1963 42675000 77944000
1969 :54-317000 53127-500
1970 .55379300 636424C3
1971 95864000 625S7<;oo
1972 62539416 72-9S2./93
1973 73-260524 74.635830
1974 77556162 84107919
1975 80679223 101.229993
1976 299-233270 135132526
1977 213260197 133337323
*appropriations enteredinthe "budgets

-21- ANNEX 6/2
Curve ofgrowth ofappropriations forcommitment andappropriationsmillion
forpayment inChapter 33(expenditure onresearch investment )
from 1958 to1977
«i,,-
3
*
-
15*
1
*1.
1*1
V •
Μ Γ
1
i-;( I '
'ï /
ι
/III
II
I
f
th; * /
*
. \ /'\ ν
r ! .4* /r~^ /\ \ ■ a/ // V A/ν/ \ Λ
·.Κ \\ \
/V/ \\ //ν \// Nv
" \
h/■s
Is
•v/''//•
■IL_
''(!><t'tl~l'«Ulïl'«'<■17IIl'hHV11 "7'.
- &appropri aticna for coDBitzasrit
– ..approprìaticns fcrpc^y^ent

-22-AJUIEX7,
SUMHAHY OFBASICDATACOJCEHffTNG HOI-COMPULSOHT
EXPEHDITUHE IMTHEFIKABCIAL YEARS197->-1976-1Q77
1Ba.a.
TEAKASSESSMENT
FORPREVIOUS
FIKAHCIAL ÏKARMAXIMUM
RATEPROGRESS IOMIMCKEASI MAROIVOP
MANOEUVRE USED
BTPARLIAMENT ABSOLWS
3-1IIi,
311
1 2 3 4 5 '¿
1975 72808865214.65t 1024906636♦296817984+40.77 47849IOS1
1976 1024906636I5.3*1478811367 +453904731+44.28 729000002
1977 147881136717.35t 1406398157-72413210-4.90
(formalapproach)
1933362357 +454550990 +■30.74128000000*
(realapproach)
Marginformanoeuvre forthe1975Budget
(B)Determination oftheamount
.ΧιΣΡ.7.Μ(χ72θ088652-53150471
(b)Utilliation
-45349105(•*adoptionofordinarybudget)
+2500000(forthirdaupplemantaiy budgetfor1975-bee-keepera appropriation )
.47849105
2.Marginformanoeuvrefortha1976Budget
(a)Determination ofthaamount
.llur.7.6#*1024906636(ERDP-noa)-78405348
.i2i^.7.6596*874906636(EHDF-oa)-66930358
MUtilisation !the'taarginformanoeuvre"waswithintherang*of78.4and66.9Billionu.a.,
orenaverageofaround72*6millionu.a*
102.9(increaseofnoabyParliament )
_jo.O(amountforraaaarohundertaken bythaCounoil)
-72-9
3*Marginformanoeuvrafortha1977Budget
(a)Détermination oftheamount
ÌL·#.
28.655t*Χ478811367(ERDF-nee)-127917193
i7.35t.
28.695tχ1178811367(ERDF-oe).101967183
ÌLJ*.
28.655tχ1920662111(ERDF-noe).166154573
IL·#.
y8.6#χ1420862111(ERDF-oe)-122904573*formaiapproaohi
-realapproach :
(b)Utilization
128Billionu.a.(aumfixed.pragmatically -seabelow).
–~rJn:>0-127.9.corresponding toanarithmetic averageofParliament's"marginformanoauvra"waawithinthe v„between1976and1977andthedifficultiee
eon#115Billionu.a.Inviewofthaproblemsoausedbythe®*venberw6thatParliaments "marginfor
ofcomparison ,theCounoiloonsidered attheaeoondrengarisingfromamendmentatonewoperatione
manoeuvre"shouldamounttoaome120millionu.a.Pl"B „millionu.a.,itbeingunderstoodthatthis
(estimatedat7-5millionu.a.).Thetotalwould appropriations foroommitmant.amountwouldheappliedtonon-differentiated appropriations andapprop
.,„v..I07fiandfollowingafinalmeetingofoonoertation
WhenthebudgetwasfinallyadoptedbyParliament on16|parliMBantfinallymadeuseof140millionu.a.I
betweentheCounoilandaParliament delegation on14"«noroach".Parliament thuB«
takingaooountoftheobjeotivereasoningbasedonthareaiaw ^
U)usedallits"marginformanoeuvre"(pragmatically^•^^^"^ practioe-evenifthishasnotbem
lb)exoeededbr12millionu.a.its"marginform.rtnritml'"«r.nordanoewithtfrtWBViaianaofformallyconfirmed-«--♦"7*final^0Bi«*^
sub-paragraph ofArtiole20^(8)(shareddqc?