Keywords

Summary



Keywords

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1 . Budget of the European Communities - Compulsory expenditure and non-compulsory expenditure - Classification of expenditure - Inter-institutional conciliation procedure - Discretionary power of the institutions - Limits - Judicial review

( EEC Treaty, Art . 203; Financial Regulation, Art . 21 )

2 . Budget of the European Communities - Transfers of appropriations - Competence of the Council with regard to transfers of appropriations relating to compulsory expenditure - Classification of expenditure - Financial commitments vis-à-vis Turkey

( Financial Regulation, Art . 21 ( 2 ) )

3 . Budget of the European Communities - Provisional appropriations - Utilization by way of transfer of appropriations - Conditions and procedure

( Financial Regulation, Art . 15 ( 4 ) and Art . 21 )

4 . International agreements - EEC-Turkey Association Agreement - Special aid for Turkey granted within the framework of the Association - Contestation - Alleged breach of a resolution of the Security Council of the United Nations - Rejected

( EEC-Turkey Association Agreement )

Summary

1 . The distinction, laid down in Article 203 of the Treaty and also adopted in Article 21 of the Financial Regulation, between compulsory expenditure and non-compulsory expenditure is intended to determine the respective powers of the European Parliament and the Council in budgetary matters . Since the operation of the budgetary procedure, as it is laid down in the financial provisions of the Treaty, is based essentially on inter-institutional dialogue, problems regarding the delimitation of non-compulsory expenditure in relation to compulsory expenditure should be resolved using the inter-institutional conciliation procedure set up by the Joint Declaration of the European Parliament, the Council and the Commission of 30 June 1982 . The discretionary power which the Community institutions possess in this context with regard to the classification of expenditure is, however, limited by the separation of powers, as laid down in the Treaty, between the institutions . The Court of Justice must therefore make sure that in the context of inter-institutional cooperation the institutions do not ignore the rules of law and do not exercise their discretionary power in a manifestly wrong or arbitrary way .

2 . The Community institutions did not commit an error in law by classifying as compulsory expenditure the appropriations entered under Item 9631 of Chapter 100 ( provisional appropriations ) of the 1986 Budget of the European Communities in order to cover the obligations arising under the Fourth Financial Protocol with Turkey when it has been duly signed and concluded . That is also true of the classification as compulsory expenditure of Item 9632 ( Special aid for Turkey ) of Chapter 96 ( Cooperation with Mediterranean countries ) of that budget . Since the decision of the Association Council providing for cooperation with regard to the implementation of the special aid made available by the Community indicates that the Community' s offer was accepted and places that aid within the institutional framework of the Association, it does not appear that the classification of the special aid as compulsory expenditure is vitiated by an error of law or a manifest error of assessment . Moreover, the compulsory character of that aid is not affected by the fact that it was suspended following the freezing of relations between the Community and Turkey in 1981 . In those circumstances, the Council was competent under the second subparagraph of Article 21 ( 2 ) of the Financial Regulation to decide on the transfer of appropriations between the aforesaid two budgetary items .

3 . According to Article 15 ( 4 ) of the Financial Regulation, provisional appropriations, which it authorizes to be entered in the budget, "may be used only by means of transfer in accordance with the procedure laid down in Article 21" of the Financial Regulation . Article 21 lays down the conditions and the limits within which the institutions of the Community may modify the budget forecast . Neither it nor any other budgetary provision prohibits the direct transfer of provisional appropriations to budgetary headings other than those originally intended to receive them which are mentioned in the remarks relating to the chapter in which they are entered .

4 . Resolution No 541 of 18 November 1983 of the Security Council of the United Nations calling upon all States not to recognize any Cypriot State other than the Republic of Cyprus is completely extraneous to relations between the European Economic Community and Turkey in the context of the Association between Turkey and the Community; hence a submission based on the argument that the grant of aid by the Community within the framework of the aforesaid Association is in breach of that resolution owing to the fact that Turkey is in breach of the resolution cannot successfully be relied on before the Court .