HC Deb 24 October 1988 vol 139 cc38-9

Luxembourg, 24 June 1988

The Council of the European Communities,

Having regard to the Treaty establishing the European Economic Community, and in particular Articles 199 and 201 thereof1,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Articles 171( 1) and 173 thereof2,

Having regard to the proposal from the Commission3,

Having regard to the Opinion of the European Parliament4,

Having regard to the Opinion of the Economic and Social Committee5,

Whereas Council Decision 85/257/EEC/Euratom of 7 May 1985 on the Communities' system of own resources6, as last amended by the Single Europan Act, raised to 1.4 per cent. the limit for each Member State on the rate applied to the uniform value added tax (VAT) base previously set at 1 per cent. by the Council Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources7 hereinafter referred to as "the Decision of 21 April 1970";

Whereas the resources available within the limit of 1.4 per cent. are no longer suffcient to cover the estimates of Community expenditure;

Whereas the Single European Act8 opens up new possibilities to the Community; whereas Article 8a of the Treaty establishing the European Economic Community provides for the completion of the internal market by 31 December 1992;

Whereas the Community must possess stable and guaranteed revenue enabling it to stabilize the present situation and operate common policies; whereas this revenue must be based on the expenditure deemed necessary to this end which was determined in the financial estimates in the Interinstitutional Agreement between the European Parliament, the Council and the Commission, which will take effect on 1 July 1988;

Whereas the European Council meeting in Brussels on 11, 12 and 13 February 1988 reached certain conclusions;

Whereas, in accordance with these conclusions, the Community will, by 1992, be assigned a maximum amount of own resources corresponding to 1.2 per cent. of the total of the Member States' gross national product for the year at market prices, hereinafter referred to as "GNP";

Whereas observance of this ceiling requires that the total amount of own resources at the Community's disposal for the period 1988 to 1992 does not in any one year exceed a specified percentage of the sum of the Community's GNP for the year in question; whereas that percentage shall correspond to application of the guidelines established for growth in Community expenditure as laid down in the European Council conclusions concerning budgetary discipline and budget management, and a safety margin of 0.03 per cent. of Community GNP aimed at coping with unforeseen expenditure;

Whereas a global ceiling of 1.30 per cent. of the Member States' GNP is set for commitment appropriations; whereas an orderly progression of commitment appropriations and payment appropriations must be ensured;

Whereas these ceilings should remain applicable until this Decision is amended;

Whereas, with a view to matching the resources paid by each Member State more closely with its ability to contribute, the composition of Community own resources should be amended and enlarged: whereas it is necessary for this purpose:

Whereas the customs duties on products coming under the Treaty establishing the European Coal and Steel Community' should be included in Community own resources;

Whereas the conclusions of the European Council of 25 and 26 June 1984 on the correction of budgetary imbalances continue to apply for the duration of this Decision's validity; whereas the present compensation mechanism must, however, be adjusted to take account of the capping of the VAT base and the introduction of an additional resource and must provide for financing of the correction on the basis of a GNP key; whereas this adjustment should ensure that the VAT share of the United Kingdom is replaced by its share of payments under the third and fourth resources (those provided by VAT and GNP respectively) and that the effect on the United Kingdom, in respect of a given year, of the capping of the VAT base and of the introduction of the fourth resource which is not compensated by this change will be offset by an adjustment to the compensation in respect of that year; whereas the contributions of Spain and Portugal should be reduced in accordance with the rebates provided for in Articles 187 and 374 of the 1985 Act of Accession2,

Whereas the budgetary imbalances should be corrected in such a way as not to affect the own resources available for the Community's policies;

Whereas the conclusions of the European Council of 11, 12 and 13 February 1988 provided for the creation, in the Community budget, of a monetary reserve, hereinafter referred to as the "EAGGF monetary reserve", to offset the impact of significant and unforseen fluctuations in the ECU/dollar parity on the expenditure under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF); whereas that reserve should be covered by specific provisions;

Whereas provisions must be laid down to cover the changeover from the system introduced by Decision 85/257/EEC/Euratom to that arising from this Decision;

Whereas the European Council of 11, 12 and 13 February 1988 provided that this Decision should take effect on 1 January 1988,

Has laid down these provisions, which it recommends to the Member States for adoption:

Forward to