15.7.88 Official Journal of the European Communities No L 185/29 COUNCIL DECISION of 24 June 1988 concerning budgetary discipline (88/377/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Articles 43, 126, 127, 130d, 130i, 203, 209 and 235 thereof, Having regard to the proposal from the Commission (1), Having regard to the opinion of the European Parliament (), Having regard to the opinion of the Court of Auditors (3), Whereas at its meetings in Brussels in 1987 and 1988 the European Council agreed to submit the use of the Community’s 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 that discipline must be strengthened in the light of experience on the basis of the arrangements adopted by the European Council at Fontainebleau; Whereas, in addition, an agreement, hereinafter referred to as the ‘Interinstitutional Agreement’, was reached between the European Parliament, the Council and the Commission with the aim of attaining the objectives of the Single European Act, of putting in concrete form the conclusions reached by the European Council at the said meetings on budgetary discipline and of improving the operation of the annual budgetary procedure and whereas it will take effect on 1 July 1988; Whereas budgetary discipline must be applied to all the Community’s expenditure and whereas it must cover both payment and commitment appropriations; Whereas on 11, 12 and 13 February 1988 the European Council agreed upon the principles of a guideline for the control of agricultural expenditure (hereinafter referred to as the ‘agricultural guideline’); Whereas the rate of progression of the European Agricultural Guidance and Guarantee Fund Guarantee expenditure must not exceed 74 % of the rate of increase in Community gross national product, this rate corresponding to that of 80 % if (1) OJ No C 146, 3. 6. 1988, p. 22. (2) Opinion delivered on 16 June 1988 (not yet published in the Official Journal). (*) Opinion delivered on 22 June 1988 (not yet published in the Official Journal). maximum EAGGF financing of set-aside were to be 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 normalized by 1992; . Whereas the stabilization mechanisms provided for in the provisions governing the common organization 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 whereas, to cover development 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; Wherear it is necessary that compulsory expenditure other than EAGGF Guarantee expenditure be subject to budgetary rigour and planning, HAS ADOPTED THIS DECISION: 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. The maximum progression for EAGGF Guarantee expenditure (the agricultural 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 form which the agricultural guideline for each subsequent year is to be calculated shall be 27 500 million ECU, to be adjusted according to Article 3.