CELEX: 51993PC0020(01)
Language: en
Date: 1993-01-26
Title: Proposal for a COUNCIL DECISION concerning budgetary discipline

No C 68 / 6                                Official Journal of the European Communities                                  11 . 3 . 93
                                                                    II
                                                           (Preparatory Acts)
                                                      COMMISSION
                                  Proposal for a Council Decision concerning budgetary discipline
                                                             (93 / C 68 /07)
                                                           COM(93) 20 final
                                          (Submitted by the Commission on 17 February 1993)
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,                                Community aid scheme for forestry measures and the aid
                                                                         scheme for early retirement from farming is multiannual
 Having regard to the Treaty establishing the European                   in nature ; whereas special monitoring and control
Economic Community, and in particular Articles 43, 209                  procedures should be introduced adapted to the nature
 and 235 thereof,                                                        of this expenditure ;
 Having regard to the proposal from the Commission ,                    Whereas, if there is a risk of the appropriations in a
Having regard to the opinion of the European                             given chapter being overspent as a result of an
 Parliament,                                                             unforeseen change in internal supply or demand ,
                                                                         corrective measures should be taken to remedy the
 Having regard to the opinion of the Court of Auditors ,                situation ;
Whereas, at its meeting in Edinburgh on 11 and 12                       Whereas the corrective measures do not necessarily have
December 1992 , the European Council decided to retain                  an effect on the budget during the budget year
 and strengthen the budgetary discipline introduced by                  concerned and whereas it may be necessary in such
 Council Decision 88 / 377 / EEC (');                                   circumstances to take the safeguard measure of
                                                                        increasing the corresponding appropriations by means of
Whereas a new Interinstitutional Agreement containing                   transfers ;
the financial perspective for 1993 to 1999 (hereinafter
referred to as the 'Interinstitutional Agreement') was                  Whereas evaluation of the impact of the corrective
concluded on . . . between the European Parliament, the                 measures on the development of the market situation will
Council and the Commission for the purposes of                          help to ensure continuity in the control of agricultural
implementing budgetary discipline and of improving the                  expenditure from one year to the next ;
annual budgetary procedure ;
                                                                        Whereas, the level of EAGGF Guarantee Section expen­
Whereas the European Council also agreed to maintain                    diture may be influenced by movements in the dollar/ecu
the base and the rate of increase of the agricultural                   market rate and by currency realignments between the
guideline and to extend it to all expenditure under the                 Member States ; whereas a monetary reserve should
reformed common agricultural policy and to some other                   therefore be entered in the form of provisional appropri­
expenditure ;                                                           ations to be drawn on should the need arise ;
Whereas there have been differing interpretations of the                Whereas with the gradual implementation of the reform
mechanisms set up by Article 6 of Decision 88 / 377 /EEC                of the common agricultural policy, expenditure is likely
to ensure compliance with the agricultural guideline ;                  to be less sensitive to changes in the dollar/ecu rate ;
whereas their scope must therefore be clarified ;                       whereas the monetary reserve can therefore be reduced
                                                                        from ECU 1 billion to ECU 500 million from 1995 ;
Whereas the mechanisms for the depreciation of stocks
formed during the budget year should be retained ;                      Whereas the quality and reliability of the particulars
                                                                        communicated by the Member States in connection with
Whereas the annual agricultural price proposals and any                 agricultural expenditure are essential for the proper
proposals for regulations involving expenditure under the               operation of the early warning system and the effec­
EAGGF Guarantee Section must comply with the limit                      tiveness of budgetary discipline ; whereas provision
laid down by the agricultural guideline ;                               should therefore be made, when these requirements are
Whereas expenditure arising from application of
                                                                        not satisfied, for the possibility of reducing or
                                                                        provisionally suspending the monthly advances , without
environmental measures in the agricultural sector, the
                                                                        prejudice to the possibility of reducing or suspending
                                                                        these advances where Member States fail to comply with
(') OJ No L 185 , 15 . 7 . 1988 , p. 29 .                               the rules ;
 ---pagebreak---  11 . 3 . 93                          Official Journal of the European Communities                                No C 68 / 7
Whereas, to provide appropriations for the Guarantee            — forecasts of expenditure in the year in question on
Fund established by Regulation (EEC , Euratom) No                    disposal of ACP sugar, food aid refunds, payments
. . ./93 a reserve for guarantees on loans to non-member             by producers in respect of levies provided for by the
countries and on loans in those countries must be                    common organization of the sugar market and any
entered in the budget in the form of provisional appro­              other revenue raised from the agricultural sector in
priations ;                                                          the future .
Whereas this reserve is also used to cover activated guar­
antees, up to the limit of its appropriations, when the                                     Article 3
Guarantee Fund does not have sufficient resources ;
                                                                 1 . The agricultural guideline shall cover expenditure
Whereas a financial margin must be left to permit a rapid       chargeable to Titles 1 to 5 of subsection B1 of Section
response to specific emergency aid requirements in              III of the budget in the nomenclature adopted for the
non-member countries resulting from unforesseeable               1993 budget.
events , with priority being given to humanitarian oper­
ations ; whereas a reserve should be entered in the budget      2 . Each year the budget shall contain the appropri­
for this purpose in the form of provisional appropri­           ations necessary for financing all costs relating to the
ations ;                                                        depreciation of stocks formed during the budget year.
Whereas the conditions for calling in and mobilizing
funds should be the same for the monetary reserve, the                                      Article 4
reserve for loan guarantees and the reserve for                  1 . The Commission's agricultural price proposals and
emergency aid ;                                                 any other proposals for regulations involving expenditure
                                                                referred to in Article 3 shall be consistent with the limit
Whereas, for reasons of clarity, the relevant provisions
should be consolidated in one instrument and Decision           laid down by the agricultural guideline .
88 / 377 /EEC should accordingly be repealed ;
                                                                2.     Any Member State may ask the Commission to
Whereas it is necessary that expenditure other than             evaluate the financial consequences of any amendment
EAGGF Guarantee expenditure be subject to budgetary             which may be made to a proposal referred to in
rigour and planning,                                            paragraph 1 during the Council's discussions . The
                                                                Council shall then be obliged to postpone its decision
HAS ADOPTED THIS DECISION :
                                                                until it is informed of the impact.
             I. EAGGF GUARANTEE EXPENDITURE
                                                                3.     If the Commission considers that the outcome of
                          Article 1                             the Council's discussions on these proposals may be such
The agricultural guideline, which represents a ceiling on       that the costs specified in its initial proposals will be
                                                                significantly exceeded , the final decision shall be taken at
agricultural expenditure as defined in Article 3 for each       a special Council meeting.
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                                     Article 5
agricultural prices and shall determine its final level
when establishing the preliminary draft budget.                 1 . To ensure that the agricultural guideline is
                                                                respected, the Commission shall establish a monthly
                          Article 2                             early warning and monitoring system for each chapter
                                                                involving expenditure of the type referred to in Article 3 .
1.       The reference base from which the agricultural
guideline is to be calculated shall be equal to ECU             2. Before      the beginning of each budget year, the
27 500 million entered for 1988 in Titles 1 and 2 of Part
                                                                Commission     shall define indicative profiles of monthly
B of Section III of the budget less the amounts for that        expenditure     for each budget chapter based, where
year relating to the disposal of ACP sugar, food aid            possible, on      the average monthly expenditure of the
refunds and payments by producers in respect of the             three preceding years .
levies provided for by the common organization of the
sugar market.
                                                                3 . In view of its multiannual nature, implementation
2 . The agricultural guideline for a given year shall be        of expenditure arising from application of environmental
equal to the reference base laid down in paragraph 1            measures in the agricultural sector, the Community aid
plus amounts corresponding to :                                 scheme for forestry measures and the Community aid
                                                                scheme for early retirement from farming shall be subject
— the base multiplied by 74 °/o of the rate of increase in      to special monitoring based on :
      GNP between 1988 (base year) and the year in
      question ,
                                                                — applications made by potential beneficiaries to
— the base multiplied by the GNP deflator estimated by               Member States, which shall send this information to
      the Commission for the same period ,                           the Commission each month ,
 ---pagebreak---  No C 68 / 8                           Official Journal of the European Communities                                   11 . 3 . 93
— individual commitments entered into in response to             developments in the market situation in the light of the
     the applications referred to in the first indent, which     corrective measures adopted, the foreseeable financial
     the Member States shall send to the Commission              consequences of which shall be taken into account in the
     every six months .                                          budget for the following year. If these measures prove
                                                                 insufficient for restoring the balance of the market or
 4 . The statements of expenditure presented by the              markets concerned, the Commission shall present
 Member States in accordance with Article 3 (3) of               proposals to the Council designed to strengthen their
                                                                 action .
Commission Regulation No 2776/ 88 (J) shall be sent to
the European Parliament and to the Council for infor­
mation .                                                         9.     In circumstances other than those referred to in
                                                                 paragraph 6, and without prejudice to the special
The Commission shall submit monthly reports thereafter           measures which may be taken for the operations referred
to the European Parliament and the Council on the                to in paragraph 3, the Commission shall propose
development of actual expenditure in relation to the indi­       measures to increase the appropriation of a chapter
cative profiles .                                                whenever it is insufficient .
5 . When expenditure under a given chapter signifi­                                         Article 6
cantly exceeds the profile laid down, the Commission
shall analyse the discrepancy.                                   The dollar/ecu rate used to draw up the annual budget
                                                                 estimates of the expenditure referred to in Article 3 for
If the overrun on the profile is not likely to lead to an        any given year shall be the average market rate over the
overrun on the appropriations for the chapter, no                first three months of the preceding year.
corrective measures need be taken . The Commission
shall explain to the budgetary authority its reasons for                                    Article 7
not expecting an overrun on the appropriations .
                                                                 ECU 1 000 million shall be entered in a reserve in the
If it concludes that there is a risk of the appropriations       general budget of the European Communities , as a
for the chapter being exceeded at the end of the year,           provision to cover :
the Commission shall determine the causes and evaluate
the foreseeable effect on the budget.                            — developments caused by movements in the dollar/ ecu
                                                                      market rate in relation to the rate used in the budget,
6 . Where the appropriations entered in the budget are
in danger of being exceeded as a result of unforeseen            — and, where applicable, the costs arising from
changes in internal supply or demand, the Commission                  monetary realignments between Member States .
shall take action on the chapter concerned, using the
management powers at its disposal , including those it has       From 1995 , the reserve shall be reduced to ECU 500
under the stabilizing measures , to remedy the situation .       million. These appropriations shall not be included in the
If these measures are insufficient, the Commission shall         agricultural guideline .
present proposals to the Council for appropriate action
to control expenditure , which may include proposals for                                    Article 8
strengthening the stabilizers in the relevant sector. The
Council shall act within two months of receiving the             By no later than the end of October each year, the
Commission's proposal in order to remedy the situation .         Commission shall report to the budgetary authority on
Should it fail to take a decision within this time limit, the    the impact on expenditure referred to in Article 3 of
Council shall inform the European Parliament of the              movements in the average dollar/ecu market rate for the
reasons .                                                        period from 1 August of the preceding year to 3 1 July of
                                                                 the current year in relation to the rate used in the
7 . The Commission shall evaluate the impact of the              budget, as defined in Article 6 .
proposed measures with respect to both the savings
which they are likely to produce and the time required                                      Article 9
for them to have their first economic and budgetary
effects . The budgetary authority shall be informed of this      1 . Savings or additional costs resulting from
evaluation .                                                     movements in the rate shall be treated in symmetrical
                                                                 fashion. Where the dollar strengthens against the ecu
8 . If it proves impossible to remedy the situation
                                                                 compared to the rate used in the budget, savings in the
                                                                 Guarantee Section of up to ECU 1 000 million (ECU
before the end of the budget year, the budgetary                 500 million from 1995) shall be transferred to the
authority, acting on a proposal from the Commission,
shall make a transfer as a safeguard measure. The                monetary reserve. Where additional budgetary costs are
Commission shall inform the budgetary authority of
                                                                 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
(') OJ No L 249, 8 . 9 . 1988 , p. 9 .                           monetary reserve to the EAGGF Guarantee Section
 ---pagebreak--- 11 . 3 . 93                                Official Journal of the European Communities                                 No C 68 / 9
headings affected by the fall in the dollar. Where                   indicating evident misuse of Community funds, the
necessary, these transfers shall be proposed at the same             Commission may reduce or provisionally suspend the
time as the report referred to in Article 8 .                        monthly advances after notifying the Member State in
                                                                     question at least five days before the decision and after
2.      There shall be a franchise of ECU 400 million .              consulting the EAGGF Committee . This reduction or
                                                                     suspension shall be without prejudice to the decisions
Savings or additional costs below this amount arising                which will be taken as part of the clearance of accounts .
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               3.     If the profile defined in Article 2 (5) is significantly
paid into, or met from, the monetary reserve. The                    exceeded, the Member States shall, at the Commission's
amount shall be reduced to ECU 200 million from 1995 .               request, provide any information which may explain the
                                                                     abnormal rate of expenditure, including particulars about
                                                                     the quantities subsidized .
                            Article 10
 1 . If it should become apparent when the budget is
being implemented that the agricultural guideline cannot                    II . RESERVES FOR EXTERNAL OPERATIONS
cover the budget cost arising directly from monetary
realignments within the European Monetary System, the                 1 . Reserve to guarantee Community loans and loan guar­
monetary reserve shall be used and appropriate transfers             antees to non-member countries and in those countries
shall be proposed without, however, compromising full
application of Article 9 ( 1 ).
                                                                                                Article 13
2 . If, in the circumstances referred to in paragraph 1 ,             Each year the current-price equivalent of ECU 300
the appropriations available in the monetary reserve                  million at 1992 prices shall be entered as a provision in a
prove inadequate , the Council shall take the necessary              reserve in the general budget of the European
measures .                                                            Communities .
                            Article 11                               This amount shall be adjusted to the corresponding allo­
                                                                      cation in the financial perspective contained in the
 1 . Funds shall be taken from the reserve only if the                Interinstitutional Agreement if the financial perspective is
 additional costs cannot be met from the budget appropri­             revised .
 ations to cover the expenditure referred to in Article 3
 ( 1 ) for the year in question .                                    This reserve is intended to cover :
2.       The necessary own resources shall be called up, in           (a) the requirements of the Guarantee Fund set up by
 accordance      with    Council       Decision    88 / 376/ EEC ,         Regulation (EEC , Euratom) No . . ./93 ; and
 Euratom ( l) and the provisions adopted pursuant thereto ,
 to finance the corresponding expenditure .                           (b) where necessary, activated guarantees exceeding the
                                                                           amount available in the Fund so that these amounts
 3.      Any savings made in the EAGGF Guarantee                           may be charged to the budget.
 Section which have been transferred to the monetary
 reserve in accordance with Article 9 ( 1 ) and which                                            Article 14
 remain in the monetary reserve at the end of the
 financial year shall be cancelled and thus contribute to a           If, at the end of the financial year, the Fund exceeds the
 budgetary surplus which shall be counted as a revenue                target amount provided for in Article 3 of Regulation
 item in the budget for the coming year by means of a                 (EEC , Euratom) No . . ./93 , the surplus shall be repaid
 letter of amendment to that budget.                                  to a specific heading in the statement of revenue of the
                                                                      budget and shall contribute to a budgetary surplus.
                            Article 12
                                                                                      2 . Reserve for emergency aid
  1 . Payment of the monthly EAGGF Guarantee
 advances by the Commission shall be effected on the
 basis of the information supplied by the Member States                                          Article 15
 in regard to expenditure in each chapter.
                                                                      A reserve for emergency aid to non-member countries
                                                                      shall be entered each year in the general budget of the
 2.      In the event of unsatisfactory explanations,                 European Communities as a provision. The purpose of
 incorrect or late notification , serious suspicions that the         this reserve shall be to permit a rapid response to specific
 rules are not being complied with and any other situation            emergency aid requirements in non-member countries
                                                                      resulting from unforeseeable events, with priority being
 (') OJ No L 185 , 15 . 7 . 1988 , p. 24 .                            given to humanitarian operations .
 ---pagebreak---  No C 68 / 10                          Official Journal of the European Communities                                        11 . 3 . 93
The amounts of this reserve shall be the equivalent, in              The own resources necessary shall be made available as
 current prices for each financial year, of the following            provided in Council Regulation (EEC, Euratom) No
 amounts expressed in 1992 prices : ECU 200 million in                1552 / 89 (»).
 1993 and 1994 and ECU 300 million for each of the
 financial years between 1995 and 1999.                                               III . OTHER PROVISIONS
                                                                                                Article 18
 These amounts shall be adjusted to the corresponding                Budgetary discipline in respect of all other expenditure
 allocations in the financial perspective contained in the           shall be applied on the basis of the arrangements
 Interinstitutional Agreement if the financial perspective is        contained in the Interinstitutional Agreement.
 revised .
                                                                                                Article 19
                                                                     The financial implementation of any Council Decision or
                    3 . Common provisions                            any decision by the European Parliament and the
                                                                     Council exceeding the budget appropriations available in
                                                                     the general budget or the appropriations provided for in
                          Article 16
                                                                     the financial perspective contained in the Inter­
                                                                     institutional Agreement may not take place until the
The reserves shall be used by means of transfers to the              budget has been amended and, where necessary, the
 budget headings concerned in accordance with the                    financial perspective revised according to the procedure
provisions of the Financial Regulation.                              laid down for each of these cases .
                                                                                        IV. FINAL PROVISION
                                                                                                Article 20
                          Article 17
The own resources necessary for financing the reserves               Decision 88 / 377 /EEC is hereby repealed .
 shall not be called in from the Member States until the
 reserves are used in accordance with Article 16 .                   (') OJ No L 155 , 7 . 6. 1989, p. 1 .
                     Proposal for a Council Regulation (EEC, Euratom) establishing a Guarantee Fund
                                                         (93 / C 68 /08)
                                                      COM(93) 20 final
                                     (Submitted by the Commission on 17 February 1 993)
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,                           Whereas mechanisms currently exist for honouring
                                                                    guarantees when they are activated, in particular by
Having regard to the Treaty establishing the European               drawing provisionally on cash resources , as provided for
Economic Community, and in particular Article 235                   in Article 12 of Council Regulation No 1552/ 89 of 29
thereof,                                                            May       1989   implementing          Decision 88 / 376 / EEC ,
Having regard to the Treaty establishing the European               Euratom on the system of the Community's own
Atomic Energy Community, and in particular Article 203              resources ('), as last amended by Regulation (EEC,
thereof,                                                            Euratom) No . . .;
Having regard to the proposal from the Commission ,
                                                                    Whereas it is necessary for these mechanisms to be rein­
Having regard to the opinion of the European                        forced by making provisions for the risk of default ;
Parliament,
Having regard to the opinion of the Court of Auditors ,             Whereas it is possible to meet this need by the estab­
Whereas the European Council, meeting in Edinburgh                  lishment of a Guarantee Fund which may be drawn on
on 11 and 12 December, agreed that a Guarantee Fund                 to pay the Community's creditors direct ;
should be established to cover loan guarantees to
non-member countries ;                                              Whereas the Guarantee Fund should be constituted by
Whereas the general budget is exposed to increased                  the gradual payment of resources ; whereas the Fund will
financial risk as a result of the guarantees covering loans
to non-member countries ;                                           (') OJ No L 155 , 7. 6 . 1989, p. 1 .