{
  "url": "https://openlegislation.uk/eu-decision-1988-376/introduction",
  "json_url": "https://openlegislation.uk/eu-decision-1988-376/introduction.json",
  "legislation": "eudn/1988/376",
  "legislation_title": "Council Decision of 24 June 1988 on the system of the Communities' own resources (88/376/EEC, Euratom)",
  "legislation_url": "https://openlegislation.uk/eu-decision-1988-376",
  "path": "introduction",
  "kind": "introduction",
  "number": null,
  "heading": "Introductory text",
  "text": "Council Decision\nof 24 June 1988\non the system of the Communities' own resources\n(88/376/EEC, Euratom)\nTHE COUNCIL OF THE EUROPEAN COMMUNITIES,\nHaving regard to the Treaty establishing the European Economic Community, and in particular Articles 199 and 201 thereof,\nHaving regard to the Treaty establishing the European Atomic Energy Community, and in particular Articles 171 (1) and 173 thereof,\nHaving regard to the proposal from the Commission,\nHaving regard to the opinion of the European Parliament,\nHaving regard to the opinion of the Economic and Social Committee,\nWhereas Council Decision 85/257/EEC, Euratom of 7 May 1985 on the Communities' system of own resources, as last amended by the Single European Act, raised to 1,4 % the limit for each Member State on the rate applied to the uniform value-added tax (VAT) base previously set at 1 % by the Council Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources hereinafter referred to as ‘the Decision of 21 April 1970’;\nWhereas the resources available within the limit of 1,4 % are no longer sufficient to cover the estimates of Community expenditure;\nWhereas the Single European Act 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;\nWhereas the Community must possess stable and guaranteed revenue enabling it to stabilize the present situation and operate the 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 Inter institutional Agreement between the European Parliament, the Council and the Commission, which will take effect on 1 July 1988;\nWhereas the European Council meeting in Brussels on 11, 12 and 13 February 1988 reached certain conclusions;\nWhereas, in accordance with these conclusions, the Community will, by 1992, be assigned a maximum amount of own resources corresponding to 1,2 % of the total of the Member States' gross national product for the year at market prices, hereinafter referred to as ‘GNP’;\nWhereas 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 % of Community GNP aimed at coping with unforeseen expenditure;\nWhereas a global ceiling of 1,30 % of the Member States' GNP is set for commitment appropriations; whereas an orderly progression of commitment appropriations and payment appropriations must be ensured;\nWhereas these ceilings should remain applicable until this Decision is amended;\nWhereas, with a view to matching the resources paid by each Member State more closely with its ability to contribute, the compositon of Community own resources should be amended and enlarged; whereas it is necessary for this purpose:\nto fix at 1,4 % the maximum rate to be applied to each Member State's uniform base for value added tax, limited where appropriate to 55 % of its GNP;\nto introduce an additional type of own resource to balance budget revenue and expenditure, based on the sum of Member States' GNP; for this purpose, the Council will adopt a Directive on the harmonization of the compilation of gross national product at market prices;\nWhereas the customs duties on products coming under the Treaty establishing the European Coal and Steel Community should be included in Community own resources;\nWhereas 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 Accession;\nWhereas the budgetary imbalances should be corrected in such a way as not to affect the own resources available for the Community's policies;\nWhereas 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 unforeseen 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;\nWhereas 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;\nWhereas the European Council of 11, 12 and 13 February 1988 provided that this Decision should take effect on 1 January 1988,\nHAS LAID DOWN THESE PROVISIONS, WHICH IT RECOMMENDS TO THE MEMBER STATES FOR ADOPTION:",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "footnote",
      "label": "f1",
      "text": "OJ No C 102, 16. 4. 1988, p. 8."
    },
    {
      "type": "footnote",
      "label": "f2",
      "text": "Opinion delivered on 15 June 1988 (not yet published in the Official Journal)."
    },
    {
      "type": "footnote",
      "label": "f3",
      "text": "OJ No C 175, 4. 7. 1988."
    },
    {
      "type": "footnote",
      "label": "f4",
      "text": "OJ No L 128, 14. 5. 1985, p. 15."
    },
    {
      "type": "footnote",
      "label": "f5",
      "text": "OJ No L 94, 28. 4. 1970, p. 19."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/eudn/1988/376/introduction",
    "retrieved_at": "2026-11-01T15:20:07.852124+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}