CELEX: 51988PC0257
Language: en
Date: 1988-04-27
Title: Proposal for a COUNCIL DECISION concerning budgetary discipline (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 257
Vol. 1988/0081
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
lieu par le règlement (UE) 2015/496 du Conseil du 17 mars 2015 (JO L79 du 25. 3.2015, p. 1), ce
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as last amended by Council
Regulation (EU) 2015/496 of 17 March 2015 (OJ L 79, 27.3.2015, p. 1), this file is open to the
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with Article 5 of the aforementioned regulation or are considered declassified in conformity with
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
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2015/444 vom      13.   März 2015     über die   Sicherheitsvorschriften für den Schutz von  EU-
Verschlusssachen als herabgestuft angesehen.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                   COM(87 ) 257 final
                                   Brussels , 3 May 1988
                     Proposai for a
                    COUNCIL DECISION
            concerning budgetary discipline
             ( presented by the Commission )
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                              EXPLANATORY MEMORANDUM
 In 1984 the European Council considered it essential that the Community budget
be subject to rules as strict as those governing budgetary policy in the
Member States and that budgetary discipline be imposed in respect of all
budget expenditure .
 The conclusions adopted by the European Council at its meeting on 11 and 12
 February 1988 tightened and clarified the arrangements set up following its
June 1984 meeting .
The attached proposal for a Council Decision sets out the rules for the
practical application of the principles laid down by the European Council
on 11 and 12 February 1988 .
The main items covered are :
-   the calculation of the annual guideline for EAGGF Guarantee Section
    expenditure ;
-   the types of expenditure which have to be covered by the guideline ;
-   the operation of the early warning system used for monitoring monthly
    EAGGF Guarantee Section expenditure ;
-   the operation of the monetary reserve in the event that the average
    dollar-ECU exchange rate for the financial year as a whole is
    different from the rate used for the purposes of the budget estimates .
The proposed Decision also includes a general rule on budgetary discipline
as regards compulsory expenditure other than EAGGF Guarantee Section
expenditure .
The discipline rules for non-compulsory expenditure will be determined on the
basis of the outcome of the current negotiations for the conclusion of an
interinstitutional agreement under the Trialogue procedure .
 ---pagebreak---                                  COUNCIL DECISION
                         concerning budgetary discipline
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaties establishing the European Communities , and in
 particular Articles 43        and 235 thereof ,
 Having regard to the proposal from the Commission ,
Having regard to the Opinion of the European Parliament ,
Whereas the European Council has agreed that the Community must submit the use
of its own resources to effective and legally binding discipline parallel to
the efforts being made by the Member States in connection with their own
budgets ;
Whereas the arrangements for budgetary discipline decided upon by the European
Council at Fontainebleau must be strengthened in the light of experience ;
Whereas budgetary discipline must be applied to all the Community 's expenditure
and whereas it must cover both payment and commitment appropriations ;
Whereas rules on budgetary discipline as regards non-compulsory expenditure
will be laid down in a joint declaration by Parliament , the Council and the
Commi ssion ;
whereas the European Council on 11 , 12 and 13 February agreed the principles
of a guideline for the control of agricultural expenditure ;
 ---pagebreak---                                        - 2 -
 Whereas the rate of progression of EAGGF Guarantee expenditure must not
 exceed 74% of the rate of increase in Community GNP , this rate corresponding
 to that of 80% maximum EAGGF financing of set-aside is taken into
 consideration ;
 Whereas the European Council has also agreed to mechanisms for the systematic
 depreciation of existing and future agricultural stocks so that the stock
 situation can be normalised by 1992 ;
 Whereas the stabilisation mechanisms provided for the the provisions
governing the common organisation of markets should play a part in ensuring
compliance with the agricultural guideline ;
Whereas the European Council has also agreed that the level of EAGGF Guarantee
expenditure may be influenced by movements in the dollar / ECU market rate , and
that to cover developments caused by significant and unforeseen movements in
the dollar / ECU market rate compared to the rate used in the budget a Monetary
Reserve of 1,000 million ECU shall be entered each year in the budget in the
form of provisional appropriations ;
Whereas it is necessary that compulsory expenditure other than EAGGF Guarantee
expenditure be subject to budgetary rigour and planning ;
Whereas the Treaty makes no explicit provision for the powers required to
adopt measures of budgetary discipline in respect of expenditure outside
agriculture ;
Whereas it is therefore necessary to rely on Article 235 for the inclusion
of such expenditure within the scope of budgetary discipline ,
 ---pagebreak---                                      - 3 -
 HAS DECIDED AS FOLLOWS :
                           EAGGF Guarantee Expenditure
                                    Article 1
      The rate of increase in EAGGF Guarantee expenditure - as defined in
Article 3 - between 1988 and a given year must not exceed 74% of the rate
of increase in Community Gross National Product during the same period .
      This maximum progression for EAGGF Guarantee expenditure ( the EAGGF
Guarantee guideline ), which would correspond to 80% if maximum EAGGF
financing of set-aside were taken into consideration , must be respected
each year .
                                    Article 2
      The 1988 base of expenditure from which the guideline for each subsequent
year is calculated is 27,500 million ECU , to be adjusted according to Article
3 . The statistical base with regard to GNP statistics will correspond to
that used in Decision . ( Own Resources Decision ).           All calculations
which will be made by the Commission at the time of submitting its annual
price-fixing proposal , subject to a possible final review at the time of
submitting the preliminary draft budget for the following year , will be
established in 1988 prices and converted into current prices by the use of
the GNP deflator estimated by the Commission for the year in question .
 ---pagebreak---                                       - 4 -
                                      Artide 3
      The expenditure to which Article 1 applies shall be the expenditure
chargeable to Section III , Part B , Titles 1 and 2 ( EAGGF Guarantee ) of the
budget less amounts corresponding to the disposal of ACP sugar , food aid
refunds , sugar and isoglucose levy payments by producers , and any other revenue
raised from the agricultural sector in the future .
                                      Article 4
      The agricultural guideline shall include costs relating to depreciation
of newly-created agricultural stocks . Each year the Council shall enter in its
draft budget the appropriations necessary for financing all costs relating
to depreciation of new stocks . The appropriations shall be used for the
systematic depreciation of the new stocks , which shall start when these are
formed , in accordance with the provisions which will be inserted in Regulation
N° 1383 / 78 .
      The cost of depreciating existing surplus agricultural stocks shall be
met outside the agricultural guideline . The following amounts shall be
included in Title 8 of the budget for the period 1988 / 1992 ( 1988 prices ) :
                    1988            :     1,2 thousand million ECU
                    1989-1992       :     1,4 thousand million ECU
These amounts may not be used for any other purposes .
     The procedures for the financial compensation granted to Spain and
Portugal in respect of their contribution to the financing of these stocks
will be dealt with in a separate instrument . These two States shall be
treated as if the depreciation of stocks had been entirely financed by the
Community in 1987 .
 ---pagebreak---                                      Artide 5
      The Commission 's price proposals shall be consistent with the limits
laid down by the agricultural guideline .
      If the Commission considers that the outcome of the Council 's discussions
on these price proposals is likely to exceed the costs put forward in its
original proposal , the final decision shall be referred to a special meeting
of the Council .
      The agricultural guideline must be respected each year .
                                     Article 6
      To ensure that the guideline is respected , the Commission shall establish
an " early warning system'1 covering the development of expenditure of the
individual EAGGF Guarantee expenditure chapters . Before the beginning of
each budget year the Commission shall define expenditure profiles for each
EAGGF Guarantee budget chapter based on the monthly expenditure over the
three preceding years . The Commission shall submit monthly reports thereafter
to the European Parliament and the Council on the development of actual
expenditure against profiles . Where the rate of development of expenditure
is exceeding the forecast profile , or risks doing so , the Commission shall
use the management powers at its disposal , including those which it has under
the stabilising measures , to remedy the situation . If these measures are
insufficient , the Commission shall examine the functioning of the agricultural
stabilisers in the relevant sector and , if necessary , shall present proposals
to the Council calculated to strengthen their action . The Council shall act
within a period of two months in order to remedy the situation .
 ---pagebreak---                                       Artide 7
     Payment of the monthly EAGGF Guarantee advances by the Commission shall
be effected on the basis of the information supplied by the Member States
in regard to agricultural expenditure for each common market organisation .
                                      Article 8
      Where no appropriations are available , the Commission shall propose
transfers to the budget authority .
                                      Article 9
      The dollar / ECU rate used to draw up the annual budget estimates of
EAGGF Guarantee expenditure for year n shall be the average market rate over
the first three months of year n-1 . However , the rate used in the budget for
1988 shall be 1 dollar = 0,85 ECU .
                                     Article 10
     1,000 million ECU shall be included annually in the reserve . Chapter
100 of the general budget of the Communities , as a provision for covering
developments caused by significant and unforeseen movements in the dollar / ECU
market rate compared to the dollar / ECU rate used in the budget . These
appropriations shall not be included in the agricultural guideline .
 ---pagebreak---                                         7
                                     Artide 11
      Each October , the Commission shall report to the budget authority on
the impact on EAGGF Guarantee expenditure of movements in the average
dollar / ECU market rate for the period 1 August of year n-1 to 31 July of
year n compared to the rate used in the budget , as defined in Article 9 .
                                     Article 12
      Savings or additional costs resulting from movements in the rate shall
be treated in a symmetrical fashion . Where favourable changes take place in
the dollar / ECU rate compared to the budget rate , savings in the Guarantee
Section of up to 1,000 million ECU 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 called up and transfers shall be made from the Monetary Reserve to
the EAGGF Guarantee Section lines affected by the fall in the dollar and the
necessary own resources shall be called up , in accordance with the Decision
on own resources and the provisions adopted pursuant thereto , to finance the
corresponding expenditure .
     Any saving made in the EAGGF Guarantee Section which has been transferred
to the Monetary Reserve in accordance with the first paragraph of this Article
and which remains in the Monetary Reserve shall be cancelled and thus contribute
to a budgetary surplus which shall be counted as a revenue item in succeeding
budgets . This shall be done by means of a letter of amendment during the
budgetary procedure concerning the budget for the coming year .
 ---pagebreak---                                      Artide 13
      There shall be a franchise of 400 million ECU .  Savings or additional
costs below this amount will not necessitate transfers to or from the
Monetary Reserve .  Savings or additional costs above this amount will be
paid into or met from the Monetary Reserve .
                           Other Compulsory Expenditure
                                    Article 14
     Each year , at the start of the budget procedure , the Council shall
adopt a reference framework for compulsory expenditure other than EAGGF
Guarantee expenditure . The reference framework shall include the maximum
amounts for both commitment and payment appropriations which the Council
considers necessary with due regard for the Community 's legal liabilities .
                            Non-compulsory Expenditure
                                    Article 15
     Budgetary discipline for non-compulsory expenditure shall operate on the
basis of the arrangements contained in the joint declaration between Parliament
the Council and the Commission .
 ---pagebreak---                                        9
                                    Arti ele 16
     The above provisions shall , remain in force for the duration of the
Own Resources Decision .