Proposal for a Council Regulation repealing Council Regulation No 2040/2000 on budgetary discipline
Date: 2006-08-09
Institutions: European Commission
Subjects: Council of the European Union, EAGGF Guarantee Section, EC Regulation, budgetary discipline (EU), repeal

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 09.08.2006 
COM(2006) 448 final 

2006/0151(CNS) 

Proposal for a 

COUNCIL REGULATION 

repealing Council Regulation No 2040/2000 on budgetary discipline 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

The  Interinstitutional  Agreement  (IIA)  on  budgetary  discipline  and  sound  financial 
management1  adopted  on  17  May  2006  sets  the  multiannual  financial  framework  of  the 
European  Union  for  the  period  2007-2013.  The  provisions  contained  in  Council  Regulation 
no. 2040/2000 on budgetary discipline are rendered unnecessary and are sometimes not in line 
with the provisions of the IIA. 

Provisions relating to agriculture 

The experience with the 2000-2006 financial framework has shown that there is no longer any 
need for maintaining the agricultural guideline foreseen in Council Regulation no. 2040/2000 
on  budgetary  discipline,  since  agriculture  expenditure  is  already  constrained  by  expenditure 
ceilings  agreed  till  2013.  The  other  provisions  concerning  budget  discipline  for  agriculture 
have been overtaken and reinforced by Council Regulation No 1290/2005 on the financing of 
the common agricultural policy2 (articles 18-20).  

Provisions relating to reserves 

The  reserve  for  loan  guarantees  has  been  replaced,  for  2007-2013,  by  a  budget  line  under 
heading 4 'the EU as a global player'. The Commission has also proposed a new mechanism 
founded on a new legal base3 for provisioning the Guarantee Fund for external actions. The 
new mechanism is based on an ex-post provisioning linked to the outstanding amount of loans 
and  guaranteed  loans.  This  allows  for  a  regular  provisioning  from  a  normal  budgetary  item 
classified as compulsory expenditure, and therefore an ad-hoc reserve is no longer required. 

The reserve for Emergency Aid in favour of third countries is now mentioned in the Financial 
Regulation  applicable  to  the  general  budget  of  the  European  Communities4;  and  its  amount 
and  conditions  for  utilisation  are  set  in  the  new  Interinstitutional  Agreement  on  budgetary 
discipline and sound financial management. 

Finally,  given  the  proposed  new  mechanism  for  provisioning  the  Guarantee  Fund  and  the 
rules  for  the  use  of  the  Emergency  Aid  reserve  laid  down  in  the  above-mentioned 
Interinstitutional Agreement, the related expenditure will be financed from own resources as 
any other expenditure entered in the budget, with no longer any need for specific provisions. 

Under  these  conditions,  the  Commission  therefore  considers  that  Council  Regulation  no. 
2040/2000 on budgetary discipline should be repealed. 

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4 

OJ C 139, 14.6.2006, p. 1. 
OJ L 209, 11.8.2005, p. 1. 
COM(2005) 130 final, 5.4.2005. 
OJ L 248, 16.9.2002, p. 1. 

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2006/0151(CNS) 

Proposal for a 

COUNCIL REGULATION 

repealing Regulation (EC) No 2040/2000 on budgetary discipline 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
37, 279 and 308 thereof, 

Having regard to the proposal from the Commission5, 

Having regard to the opinion of the European Parliament6, 

Having regard to the opinion of the Court of Auditors7, 

Whereas: 

(1) 

(2) 

(3) 

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Council  Regulation  (EC)  No  2040/2000  of  26  September  2000  on  budgetary 
discipline8 lays down rules designed to ensure the proper management of Community 
expenditure,  relating  both  to  the  EAGGF  Guarantee  Fund  and  to  the  reserves  for 
external operations, in accordance with the principles of sound financial administration 
agreed  in  the  Interinstitutional  Agreement  of  6  May  1999  between  the  European 
Parliament, 
the  Commission  on  budgetary  discipline  and 
improvement of the budgetary procedure9.  

the  Council  and 

As  regards  Part  I  of  Regulation  (EC)  No  2040/2000,  concerning  agricultural 
expenditure,  the  ceilings  set  in  the  multiannual  financial  framework  2007  to  2013 
enclosed  in Annex  I  of  the  new  Interinstitutional Agreement on budgetary  discipline 
and sound financial management of 17 May 200610 preclude the need to maintain the 
agricultural guideline provided for therein. 

The  remaining  provisions  concerning  budget  discipline  for  agriculture  in  Part  I  of 
Regulation (EC) No 2040/2000 have been superseded by Articles 18 to 20 of Council 
Regulation  (EC)  No  1290/2005  of  21  June  2005  on  the  financing  of  the  common 
agricultural policy11. 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 244, 29.9.2000, p. 27. 
OJ C 172, 18.6.1999, p. 1. 
OJ C 139, 14.6.2006, p. 1. 
OJ L 209, 11.8.2005, p. 1. As amended by Regulation (EC) No 320/2006 (OJ L 58, 28.2.2006, p. 42). 

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(4) 

As regards Part II of Regulation (EC) No 2040/2000, concerning reserves for external 
operations, there is no longer any need for specific provisions and measures, which are 
exceptional  in  the  context  of  the  own  resources  system,  for  the  financing  of  the 
Guarantee Fund and the Emergency Aid reserve. The reserve for loan guarantees has 
been  replaced,  for  2007-2013,  by  a  budget  line  under  heading  4  'the  EU  as  a  global 
player'; the main principles regarding the reserve for Emergency Aid are laid down in 
Council  Regulation  (EC,  Euratom)  No  1605/2002  of  25  June  2002  on  the  Financial 
Regulation applicable to the general budget of the European Communities12, while the 
amount and the conditions for utilisation are set out in the Interinstitutional Agreement 
of 17 May 2006 on budgetary discipline and sound financial management13. Since the 
interests of third parties are not directly involved, there is no need to incorporate the 
latter in a Regulation. 

(5) 

In consequence, all the provisions laid down in Regulation (EC) No 2040/2000 have 
been rendered obsolete.  

(6) 

Council Regulation (EC) No 2040/2000 should therefore be repealed, 

HAS ADOPTED THIS REGULATION: 

Council Regulation (EC) No 2040/2000 is repealed with effect from 1 January 2007. 

Article 1 

This Regulation shall enter into force on the day of its publication in the Official Journal of 
the European Union. 

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, […] 

For the Council 
The President 
[…] 

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OJ L 248, 16.9.2002, p. 1. Regulation as last amended by […] 
OJ C 139, 14.6.2006, p. 1 

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