3.

The facts of this case may briefly be summarized as follows. Parliament made changes to a number of headings of the 1995 budget, which had been approved on the first reading by the Council. The Council took the view that the headings in question related to compulsory expenditure, whereas Parliament reclassified them as noncompulsory expenditure and took the view that it had adopted with regard to those headings amendments and not proposed modifications pursuant to Article 203 of the Treaty, since proposed modifications relate to compulsory expenditure. As will be explained later, the Council for its part continued to regard the expenditure in question as compulsory and consequently treated the changes adopted by Parliament, not as amendments, but as proposed modifications, again because it regarded the expenditure in question as compulsory. The budget headings in question number 131 and relate to appropriations under Subsection Bl (EAGGF Guarantee Section) with the exception only of Subsection B7 (International fisheries agreements). In respect of each of the relevant headings in Subsection Bl, the changes adopted by Parliament as amendments are justified by remarks concerning the alleged noncompulsory nature of the expenditure in question which refer to the ‘discretion’ or ‘flexibility’ left to the Commission in the management of the measure concerned under the ‘basic regulations’. As regards ‘the heading covered by subsection B7, the amendment adopted by Parliament modifies the associated remark so as to earmark ECU 1000000 to cover expenditure in connection with an international agreement which the Community was to negotiate with Russia on the financing of fishing for herring.’ In some cases, Parliament also altered the amount of the appropriations which appeared in the draft budget originally drawn up by the Council against the budget headings covered by these proceedings. Upon its second reading of the draft budget, on 16 November 1994, the Council rejected the ‘amendments’ proposed by the Parliament on its first reading in relation to the headings at issue, on the ground that they constituted proposed modifications relating to compulsory expenditure in accordance with institutional budgetary practice and the classification introduced by the 1982 Joint Declaration. ( 3 ) The grounds for the rejection of the amendments proposed by Parliament contained in the minutes of the relevant Council meeting were also set out in the statement of reasons concerning the outcome of the second reading of the Community budget by the Council. The relevant document was forwarded to Parliament on 16 November 1994. Subsequently, by letter sent on 2 December 1994, the President-in-office of the Council reminded the President of Parliament of the position adopted by the Council with regard to the classification of the budget headings at issue by pointing out that the Council was convinced that expenditure falling within the agricultural guideline had to be regarded as compulsory under the 1982 Joint Declaration and the 1993 Interinstinational Agreement. ( 4 ) The Council adhered to that position during Parliament's second reading. Indeed, at the sitting of 13 December 1994 the President-in-office of the Council stated before Parliament that, as regards the budget headings at issue, his institution was unable to ‘accept’ the changes in the classification of the expenditure at issue as compulsory, since ‘in the negotiations which led up to the Interinstitutional Agreement, it was agreed that all of the expenditure under items 2 and 3 would henceforth be classified as noncompulsory, on the basis that the classification of all other expenditure — including that under item 1 — would in contrast remain unchanged’. In the ensuing parliamentary debate, differing views were put forward as to the classification of the expenditure at issue in these proceedings. In any event, on 15 December Parliament adopted the following resolution: ‘[le Parlement] approuve dans ces circonstances le maintien en deuxième lecture de tous les amendements considérés par le Conseil comme des “modifications”, et qui concernent des lignes pour lesquelles, selon la réglementation en vigueur, la Commission doit respecter le montant inscrit dans le budget en vertu de son pouvoir discrétionnaire de gestion’.