CELEX: 51993PC0706(01)
Language: en
Date: 1994-02-04
Title: Amended proposal for a COUNCIL DECISION concerning budgetary discipline

No C 68 /6                                 Official Journal of the European Communities                                5 . 3 . 94
                                                                  II
                                                          (Preparatory Acts)
                                                     COMMISSION
                        Amended proposal for a Council Decision concerning budgetary discipline (')
                                                            (94 /C 68 /07)
                                                         COM(93) 706 final
              (Submitted by the Commission pursuant to Article 189A (2) ofthe EC Treaty on 4 February 1994)
              o OJ No C 68 , 11 . 3 . 1993, p. 6 .
              Following delivery of the opinions of the European Parliament and the Court of Auditors, the
              European Commission hereby presents its proposal as amended hereafter :
                    ORIGINAL PROPOSAL                                                   AMENDED PROPOSAL
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European
Community, and in particular Articles 43 , 209 and 235
thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European
Parliament,
Having regard to the opinion of the Court of Auditors,
Whereas, at its meeting in Edinburgh on 11 and 12
December 1992 , the European Council decided to retain
and strengthen the budgetary discipline introduced by
the Council Decision of 24 June 1988 (');
Whereas a new interinstitutional agreement containing
the financial perspective for 1993 to 1999 was concluded
on . . . between the European Parliament, the Council
and the Commission for the purposes of implementing
budgetary discipline for the purposes of implementing
budgetary discipline and of improving the annual
budgetary procedure ;
                                                                      The third recital is amended by replacing the words
                                                                      'European Council' by the words 'the institutions'.
(') OJ No L 185 , 15 . 7 . 1988 , p . 29 .
 ---pagebreak---  5 . 3 . 94                           Official Journal of the European Communities                             No C 68 /7
                    ORIGINAL PROPOSAL                                             AMENDED PROPOSAL
 Whereas the European Council also agreed to maintain           Whereas the institutions also agreed to maintain the base
 the base and the rate of increase of the agricultural          and the rate of increase of the agricultural guideline and
 guideline and to extend it to all expenditure under the        to extend it to all expenditure under the reformed
 reformed common agricultural policy and to some other          common agricultural policy and to some other expen­
 expenditure ;                                                  diture ;
 Whereas there have been differing interpretations of the
 mechanisms set up by Article 6 of Decision 88 /377/EEC
 to ensure compliance with the agricultural guideline ;
 whereas their scope must therefore be clarified ;
 Whereas the mechanisms for the depreciation of stocks
 formed during the budget year should be retained ;
 Whereas the annual agricultural price proposals and any
 proposals for regulations involving expenditure under the
 EAGGF Guarantee Section must comply with the limit
 laid down by the agricultural guideline ;
 Whereas expenditure arising from application of the
 environmental measures in the agricultural sector, the
 Community aid scheme for forestry measures and the aid
 scheme for early retirement from farming is multiannual
 in nature ; whereas special monitoring and control
 procedures should be introduced adapted to the nature
 of this expenditure ;
Whereas, if there is a risk of the appropriations in a
 given chapter being overspent as a result of an
 unforeseen change in internal supply or demand,
 corrective measures should be taken to remedy the
situation ;
Whereas the corrective measures do not necessarily have
an effect on the budget during the budget year
concerned and whereas it may be necessary in these
circumstances to take the safeguard measure of
increasing the corresponding appropriations by means of
transfers ;
Whereas evaluation of the impact of the corrective
measures on the development of the market situation will
help to ensure continuity in the control of agricultural
expenditure from one year to the next;
Whereas, the level of EAGGF Guarantee Section expen­
diture may be influenced by movements in the dollar/ecu
market rate and by currency realigments between the
Member States ; whereas a monetary reserve should
therefore be entered in the form of provisional appropri­
ations to be drawn on should the need arise ;
 ---pagebreak---  No C 68 / 8                          Official Journal of the European Communities                                  5 . 3 . 94
                    ORIGINAL PROPOSAL                                             AMENDED PROPOSAL
Whereas with the gradual implementation of the reform
 of the common agricultural policy, expenditure is likely
 to be less sensitive to changes in the dollar/ecu rate ;
whereas the monetary reserve can therefor be reduced
 from ECU 1 billion to ECU 500 million from 1995 ;
Whereas the quality and reliability of the particulars
 communicated by the Member States in connection with
 agricultural expenditure are essential for the proper
operation of the early warning system and the effec­
tiveness of budgetary discipline ; whereas provision
 should therefore be made, when these requirements are
 not satisfied, for the possibility of reducing or
provisionally suspending the monthly advances, without
prejudice to the possibility of reducing or suspending
these advances where Member States fail to comply with
the rules ;
                                                                The 14th, 16th and 17th recitals are amended in the
                                                                same way as the third recital :
Whereas to provide appropriations for the Guarantee             Whereas the institutions are agreed that, to provide
Fund established by Council Regulation of . . ., a reserve      appropriations for the Guarantee Fund established by
for guarantees on loans to non-member countries must            Council Regulation . . . of . . ., a reserve for guarantees
be entered in the budget in the form of provisional             on loans to non-member countries must be entered in the
approprations ;                                                 budget in the form of provisional appropriations ;
Whereas this reserve is also used to cover activated guar­
antees, up to the limit of its appropriations, when the
Guarantee Fund does not have sufficient resources ;
Whereas a financial margin must be left to permit a rapid       Whereas the institutions are agreed that a financial
response to specific emergency aid requirements in              margin must be left to permit a rapid response to specific
non-member countries resulting from unforeseeable               emergency aid requirements in non-member countries
events, with priority being given to humanitarian oper­         resulting from unforeseeable events, with priority being
ations ; whereas a reserve should be entered in the budget      given to humanitarian operations ; whereas a reserve
for this purpose in the form of provisional appropri­           should be entered in the budget for this purpose in the
ations ;                                                        form of provisional appropriations ;
Whereas the conditions for calling in and mobilizing            Whereas the institutions are agreed that the conditions
funds should be the same for the monetary reserve, the          for calling in and mobilizing funds should be the same
reserve for loan guarantees and the reserve for                 for the monetary reserve, the reserve for loan guarantees
emergency aid ;                                                 and the reserve for emergency aid;
Whereas, for reasons of clarity, the relevant provisions
should be consolidated in one instrument and Decision
88/377/EEC of 24 June 1988 should accordingly be
repealed ;
Whereas it is necessary that compulsory expenditure
other than EAGGF Guarantee expenditure be subject to
budgetary rigour and planning.
 ---pagebreak---   5 . 3 . 94                             Official Journal of the European Communities              No C 68 /9
                      ORIGINAL PROPOSAL                                           AMENDED PROPOSAL
 HAS ADOPTED THIS DECISION :                                       Unchanged
             I. EAGGF GUARANTEE EXPENDITURE
                           Article 1
 The agricultural guideline, which represents a ceiling on
 agricultural expenditure as defined in Article 3 for each
 budget year, must be respected each year. For each
 budget year, the Commission shall make an initial
 estimate of the agricultural guideline when fixing the
 agricultural prices and shall determine its final level
 when establishing the preliminary draft budget.
                           Article 2                               Unchanged
 1 . The reference base from which the agricultural
 guideline is to be calculated shall be equal to ECU
 27 500 million entered for 1988 in Titles 1 and 2 of Part
 B of Section III of the budget less the amounts for that
year relating to the disposal of ACP sugar, food aid
 refunds and payments by producers in respect of the
 levies provided for by the common organization of the
 sugar market.
 2. The agricultural guideline for a given year shall be
 equal to the reference base laid down in paragraph 1
plus amounts corresponding to :
— the base multiplied by 74 °/o of the rate of incrase in
       GNP between 1988 (base year) and the year in
       question,
— the base multiplied by the GNP deflator estimated by
       the Commission for the same period,
— forecasts of expenditure in the year in question on
       disposal of ACP sugar, food aid refunds, payments
       by producers in respect of levies provided for by the
      common organization of the sugar market and any
      other revenue raised from the agricultural sector in
      the future .
                           Article 3                               Unchanged
1 . The agricultural guideline shall cover expenditure
chargeable to Titles 1 to 5 of subsection B1 of Section
III of the budget in the nomenclature adopted for the
1993 budget.
2. Each year the budget shall contain the appropri­
ations necessary for financing all costs relating to the
depreciation of stocks formed during the budget year.
 ---pagebreak---  No C 68 / 10                           Official Journal of the European Communities                                5 . 3 . 94
                     ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
                           Article 4
 1 . The Commission's agricultural price proposals and            Unchanged
 any other proposals for regulations involving expenditure
 referred to in Article 3 shall be consistent with the limit
 laid down by the guideline.
 2. Any Member State may ask the Commission to                    2. Any member of the Council may ask the
 evaluate the financial consequences of any amendment             Commission to evaluate the financial consequences of
which may be made to a proposal referred to in                    any amendment which may be made to a proposal
paragraph 1 during the Council's discussions. The                 referred to in paragraph 1 during the Council's
 Council shall then be obliged to postpone its decision           discussions. The Council shall then be obliged to
 until it is informed of the impact.                              postpone its decision until it is informed of the impact.
                                                                  Parliament shall be informed of the evaluations carried
                                                                  out by the Commission.
 3.    If the Commission considers that the outcome of            3.    If the Commission considers that the outcome of
the Council's discussions on these proposals may be such          the Council's discussions on these proposals may be such
that the costs specified in its initial proposals will be         that the costs specified in its initial proposals will be
significantly exceeded, the final decision shall be taken at      significantly exceeded, it shall inform the Council that
a special Council meeting.                                        this will constitute a substantial amendment to the
                                                                  Commission proposal necessitating a fresh consultation
                                                                  of Parliament. The final decision shall be taken at a
                                                                  special Council meeting.
                           Article 5
 1 . To ensure that the agricultural guideline is                 Unchanged
respected, the Commission shall establish a monthly
early warning and monitoring system for each chapter
involving expenditure of the type referred to in Article 3 .
2. Before the beginning of each budget year, the                  Unchanged
Commission shall define indicative profiles of monthly
expenditure for each budget chapter based, where
possible, on the average monthly expenditure of the
three preceding years.
3 . In view of its multiannual nature, implementation             Unchanged
of expenditure arising from application of environmental
measures in the agricultural sector, the Community aid
scheme for forestry measures and the Community aid
scheme for early retirement from farming shall be subject
to special monitoring based on :
— applications made by potential beneficiaries to
     Member States, which shall send this information to
     the Commission each month,
— individual commitments entered into in response to
     the applications referred to in the first indent, which
     the Member States shall send to the Commission
     every six months.
 ---pagebreak--- 5 . 3 . 94                             Official Journal of the European Communities                              No C 68 / 11
                    ORIGINAL PROPOSAL                                                AMENDED PROPOSAL
4. The statements of expenditure presented by the                Unchanged
Member States in accordance with Article 3 (3) of
Commission Regulation (EEC) No 2776/88 (') shall be
sent to the European Parliament and to the Council for
information .
The Commission shall submit monthly reports thereafter
to the European Parliament and the Council on the
development of actual expenditure in relation to the indi­
cative profiles.
5 . When expenditure under a given chapter signifi-               Unchanged
cantly exceeds the profile laid down, the Commission
shall analyse the discrepancy :
If the overrun on the profile is not likely to lead to an
overrun on the appropriations for the chapter, no
corrective measures need be taken . The Commission
shall explain to the budgetary authority its reasons for
not expecting an overrun on the appropriations.
If it concludes that there is a risk of the appropriations
for the chapter being exceeded at the end of the year,
the Commission shall determine the causes and evaluate
the foreseeable effect on the budget.
6. Where the appropriations entered in the budget are            6. Where the appropriations entered in the budget are
in danger of being exceeded as a result of unforeseen             in danger of being exceeded as a result of unforeseen
changes in internal supply or demand, the Commission             changes in internal supply or demand, the Commission
shall take action on the chapter concerned, using the            shall take action on the chapter concerned, using the
management powers at its disposal, including those it has        management powers at its disposal, including those it has
under the stabilizing measures, to remedy the situation.         under the stabilizing measures, to remedy the situation.
If these measures are insufficient, the Commission shall         If these measures are insufficient, the Commission shall
present proposals to the Council for appropriate action          present proposals to the Council for appropriate action
to control expenditure, which may include proposals for          to control expenditure, which may include proposals for
strengthening the stabilizers in the relevant sector. The        strengthening the stabilizers in the relevant sector.
Council shall act within two months of receiving the             Parliament shall deliver its opinion within six weeks and
Commission's proposal in order to remedy the situation.          the Council shall act within two months of receiving the
Should it fail to take a decision within this time limit, the    Commission's proposal in order to remedy the situation.
Council shall inform the European Parliament of the              Should it fail to take a decision within this time limit, the
reasons .                                                        Council shall inform the European Parliament of the
                                                                 reasons .
7 . The Commission shall evaluate the impact of the              Unchanged
proposed measures with respect to both the savings
which they are likely to produce and the time required
for them to have their first economic and budgetary
effects. The budgetary authority shall be informed of this
evaluation .
(') OJ No L 249, 8 . 9 . 1988 , p. 9 .
 ---pagebreak---  No C 68 / 12                           Official Journal of the European Communities               5 . 3 . 94
                     ORIGINAL PROPOSAL                                            AMENDED PROPOSAL
 8 . If it proves impossible to remedy the situation              Unchanged
 before the end of the budget year, the budgetary
 authority, acting on a proposal from the Commission,
 shall make a transfer as a safeguard measure. The
 Commission shall inform the budgetary authority of
 developments in the market situation in the light of the
 corrective measures adopted, the foreseeable financial
 consequences of which shall be taken into account in the
 budget for the following year. If these measures prove
 insufficient for restoring the balance of the market or
 markets concerned, the Commission shall present
proposals to the Council designed to strengthen their
 action .
 9.     In circumstances other than those referred to in          Deleted
paragraph 6, and without prejudice to the special
 measures which may be taken for the operations referred
 to in paragraph 3, the Commission shall propose
 measures to increase the appropriation of a chapter
whenever it is insufficient.
                           Article 6                              Unchanged
The dollar/ecu rate used to draw up the annual budget
 estimates , of the expenditure referred to in Article 3 for
 any given year shall be the average market rate over the
 first three months of the preceding year.
                           Article 7                              Unchanged
 ECU 1 000 million shall be entered in a reserve in the
general budget of the European Communities, as a
provision to cover :
— developments caused by movements in the dollar/ecu
     market rate in relation to the rate used in the budget,
— and, where applicable, the costs arising from
     monetary realignments between Member States.
From 1995 , the reserve shall be reduced to ECU 500
million. These appropriations shall not be included in the
agricultural guideline.
                           Article 8                              Unchanged
By no later than the end of October each year, the
Commission shall report to the budgetary authority on
the impact on expenditure referred to in Article 3 of
movements in the average dollar/ecu market rate for the
period from 1 August of the preceding year to 3 1 July of
the current year in relation to the rate used in the
budget, as defined in Article 6.
 ---pagebreak---   5 . 3 . 94                           Official Journal of the European Communities               No C 68 / 13
                      ORIGINAL PROPOSAL                                          AMENDED PROPOSAL
                           Article 9                             Unchanged
  1 . Savings or additional costs resulting from
 movements in the rate shall be treated in symmetrical
 fashion. Where the dollar strengthens against the ecu in
 relation to the rate used in the budget, savings in the
 Guarantee Section of up to ECU 1 000 million (ECU
 500 million from 1995) shall be transferred to the
 monetary reserve. Where additional budgetary costs are
 engendered by a fall in the dollar against the ecu
 compared with the budget rate, the monetary reserve
 shall be drawn on and transfers shall be made from the
 monetary reserve to the EAGGF Guarantee Section
 headings affected by the fall in the dollar. Where
 necessary, these transfers shall be proposed at the same
 time as the report referred to in Article 8 .
 2.       There shall be a franchise of ECU 400 million .
 Savings or additional costs below this amount . arising
 from the movements referred to in paragraph 1 will not
 necessitate transfers to or from the monetary reserve.
 Savings or additional costs above this amount shall be
 paid into, or met from, the monetary reserve. The
 amount shall be reduced to ECU 200 million from 1995 .
                          Article 10                             Unchanged
 1 . If it should become apparent when the budget is
 being implemented that the agricultural guideline cannot
 cover the budget cost arising directly from monetary
 realigments within the European monetary system, the
 monetary reserve shall be used and appropriate transfers
 shall be proposed without, however, compromising full
 application of Article 9 ( 1 ).
2. If, in the circumstances referred to in paragraph 1 ,
the appropriations available in the monetary reserve
prove inadequate, the Council shall take the necessary
measures .
                          Article 11                             Unchanged
 1 . Funds shall be taken from the reserve only if the
additional costs cannot be met from the budget appropri­
ations to cover the expenditure referred to in Article 3 ( 1 )
for the year in question.
2 . The necessary own resources shall be called up, in
accordance with Council Decision 88 / 376/EEC (*) and
the provisions adopted pursuant thereto, to finance the
corresponding expenditure .
O OJ No L 185, 15 . 7. 1988 , p. 24.
 ---pagebreak---  No C 68 / 14                           Official Journal of the European Communities                                5 . 3 . 94
                      ORIGINAL PROPOSAL                                              AMENDED PROPOSAL
 3 . Any savings made in the EAGGF Guarantee
 Section which have been transferred to the monetary
 reserve in accordance with Article 9 ( 1 ) and which
 remain in the monetary reserve at the end of the
 financial year shall be cancelled and thus contribute to a
budgetary surplus which shall be counted as a revenue
 item in the budget for the coming year by means of a
 letter of amendment to that budget.
                           Article 12
 1 . Payment of the monthly EAGGF Guarantee
 Section advances by the Comission shall be effected on
 the basis of the information supplied by the Member
 States in regard to expenditure in each chapter.
 2. In the event of unsatisfactory explanations,
 incorrect or late notification, serious suspicions that the
rules are not being complied with and any other situation
indicating evident misuse of Community funds, the
 Commission may reduce or provisionally suspend the
monthly advances after notifying the Member State in
question at least five days before the decision and after
consulting the EAGGF Committee. This reduction or
suspension shall be without prejudice to the decisions
which will be taken as part of the clearance of accounts .
3.     If the profile defined in Article 2 (5) is significantly
exceeded, the Member States shall, at the Commission's
request, provide any information which may explain the
abnormal rate of expenditure, including particulars about
the quantities subsidized .
       II. RESERVES FOR EXTERNAL OPERATIONS
 1 . Reserve to guarantee Community loans and loan
            guarantees to non-member countries
                                                                  Articles 13 and 15 are merged to form a single Article
                                                                  13 :
                           Article 13                                                    Article 13
Each year, the current-price equivalent of ECU 300                The following shall be entered in the budget each year :
million at 1992 prices shall be entered as a provision in a
reserve in the general budget of the European                     — a reserve to guarantee the lending operations covered
Communities .                                                          by Regulation (EEC, Euratom) No . . . establishing a
                                                                       Guarantee Fund,
 ---pagebreak---  5 . 3 . 94                               Official Journal of the European Communities                          No C 68 / 15
                         ORIGINAL PROPOSAL                                           AMENDED PROPOSAL
 This amount shall be adjusted to the corresponding al­             — a reserve for emergency aid for non-member
 location in the financial perspective contained in the                 countries .
 Interinstitutional Agreement if the financial perspective is
 revised .                                                          The amounts of these reserves shall be fixed in line with
                                                                    the amounts laid down in the financial perspective
 This reserve is intended to cover :                                annexed to the Interinstitutional Agreement.
 (a) the requirements of the Guarantee Fund set up by
       Council Regulation . . .; and
 (b) where necessary, activated guarantees exceeding the
       amount available in the Fund so that these amounts
       may be charged to the budget.
                              Article 14                            Deleted
 If, at the end of the financial year, the Fund exceeds the
 target amount provided for in Article 3 of Regulation . . .
 of . . ., the surplus shall be repaid to a specific heading in
 the statement of revenue of the budget and shall
 contribute to a budgetary surplus.
                  2 . Reserve for emergency aid
                             Article 15                             Deleted
A reserve for emergency aid to non-member countries
shall be entered each year in the general budget of the
European Comunities as a provision. The purpose of this
reserve shall be to permit a rapid response to specific
emergency aid requirements in non-member countries
resulting from unforeseeable in non-member priority
being given to humanitarian operations .
The amounts of this reserve shall be the equivalent, in
current prices for each financial year, of the following
amounts expressed in 1992 prices : ECU 200 million in
 1993 and 1994 and ECU 300 million for each of the
financial years between 1995 and 1999 .
These amounts shall be adjusted to the corresponding
allocations in the financial perspective contained in the
Interinstitutional Agreement if the financial perspective is
revised .
                      3 . Common provisions                         The numbering of the following Articles is altered.
                             Article 16                                                   Article 14
The reserves shall be used by means of transfers to the             Unchanged
budget headings concerned in accordance with the
provisions of the Financial Regulation.
 ---pagebreak---  No C 68 / 16                         Official Journal of the European Communities               5 . 3 . 94
                     ORIGINAL PROPOSAL                                          AMENDED PROPOSAL
                          Article 17                                                Article 15
 The own resources necessary for financing these reserves       Unchanged
 shall not be called in from the Member States until the
 reserves are used in accordance with Article 16.
 The own resources necessary shall be made available as
 provided in Council Regulation (EEC, Euratom) No
 1552 / 89 0).
                 III. OTHER PROVISIONS
                          Article 18                                                Article 16
 Budgetary discipline in respect of all other expenditure       Unchanged
 shall be applied on the basis of the arrangements
 contained in the Interinstitutional Agreement.
                          Article 19                                                Article 17
The financial implementation of any Council Decision or         Unchanged
any decision by the European Parliament and the
Council exceeding the budget appropriations available in
the general budget or the appropriations provided for in
the financial perspective contained in the Interinstitu­
tional Agreement may not take place until the budget has
been amended and, where necessary, the financial
perspective revised according to the procedure laid down
for each of these cases .
                  IV. FINAL PROVISIONS
                         Article 20                                                Article 18
Decision 88 /377/EEC is hereby repealed.                        Unchanged
0) OJ No L 155, 7. 6. 1989, p. 1 .