delivered on 28 May 2013 (1)

‛Action for annulment — Act of the President of the European Parliament relating to the European Union’s budget for the financial year 2011 — Non-compliance of that act with the new budgetary procedure laid down by the FEU Treaty — Failure to observe institutional balance — Infringement of the principle that the institutions must act within the limits of their of powers and of the duty to cooperate in good faith — Infringement of essential procedural requirements — Temporary maintenance of the effects of the budget’

I – Introduction

1.This case concerns a dispute between the Council of the European Union and the European Parliament regarding the manner in which the procedure leading to the adoption of the European Union’s general budget for the financial year 2011 was conducted. That procedure was, for the first time, carried out entirely under Article 314 TFEU.

2.By its action, the Council requests the Court to annul the act of the President of the Parliament declaring the definitive adoption of the European Union’s general budget for the financial year 2011. (2) It maintains, as its principal argument, that its rights and powers under Article 314 TFEU were infringed in so far as the adoption of the budget for the financial year 2011 did not give rise, contrary to the requirements of that article, to a legislative act of the Parliament and of the Council signed by both those institutions. The Council also alleges failure to observe institutional balance, infringement of the principle that the institutions must act within the limits of their powers and of the duty of the institutions to cooperate in good faith and, in the alternative, infringement of essential procedural requirements.

3.In this opinion, I shall set out the reasons why I consider that the procedure relating to the Union’s budget for the year 2011 was conducted in accordance with the detailed rules laid down by Article 314 TFEU. More specifically, I shall propose that the Court reject the various arguments put forward by the Council seeking to establish the need, in addition to the act of the President of the Parliament declaring that the budget has been definitively adopted, for a legislative act of the Parliament and the Council signed by both those institutions, the purpose of which is to formalise the adoption of the budget by those institutions.

II – Legal framework

4.Under Article 13(2) TEU, ‘[e]ach institution shall act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them. The institutions shall practice mutual sincere cooperation’.

5.Article 14(1) TEU states that ‘[t]he European Parliament shall, jointly with the Council, exercise legislative and budgetary functions’. In parallel with this, Article 16(1) TEU provides that ‘[t]he Council shall, jointly with the European Parliament, exercise legislative and budgetary functions’.

6.It is clear from the first paragraph of Article 288 TFEU that ‘[t]o exercise the Union’s competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions’.

7.According to Article 289(2) TFEU, ‘[i]n the specific cases provided for by the Treaties, the adoption of a regulation, directive or decision by the European Parliament with the participation of the Council, or by the latter with the participation of the European Parliament, shall constitute a special legislative procedure’. Article 289(3) TFEU states that ‘[l]egal acts adopted by legislative procedure shall constitute legislative acts’.

8.The first paragraph of Article 296 TFEU provides that ‘[w]here the Treaties do not specify the type of act to be adopted, the institutions shall select it on a case-by-case basis, in compliance with the applicable procedures and with the principle of proportionality’. The third paragraph of Article 296 TFEU states that ‘[w]hen considering draft legislative acts, the European Parliament and the Council shall refrain from adopting acts not provided for by the relevant legislative procedure in the area in question’.

9.Article 297(1) TFEU is worded as follows: ‘Legislative acts adopted under the ordinary legislative procedure shall be signed by the President of the European Parliament and by the President of the Council. Legislative acts adopted under a special legislative procedure shall be signed by the President of the institution which adopted them. …’

10.Article 314 TFEU sets out the manner in which the budgetary procedure is to be conducted. The provisions of that article which are of greatest importance in the present case are the introductory paragraph and paragraph 9.

11.The introductory paragraph of Article 314 TFEU provides as follows: ‘The European Parliament and the Council, acting in accordance with a special legislative procedure, shall establish the Union’s annual budget in accordance with the following provisions’.

12.Article 314(9) TFEU is worded as follows: ‘When the procedure provided for in this Article has been completed, the President of the European Parliament shall declare that the budget has been definitively adopted’.

III – Background to the dispute

13.Following exchanges of correspondence between the Council and the Parliament during the procedure for the adoption of the budget for the year 2010, relating to the scope of the changes introduced by the Treaty of Lisbon in the conduct of the budgetary procedure, the President of the Council sent the President of the Parliament a letter dated 12 November 2010 in which he pointed out that, following the entry into force of that treaty, the President of the Council and the President of the Parliament are both required to sign the act establishing the Union’s annual budget, since those two institutions are co-authors of that act. That act is to be distinguished from the act of the President of the Parliament declaring, in accordance with Article 314(9) TFEU, that the budget has been definitively adopted.

14.On 10 December 2010, the Council adopted its position on the new draft of the Union’s budget for the financial year 2011. It annexed to that position a draft decision of the Parliament and of the Council establishing the European Union’s general budget for the financial year 2011. That draft decision contained a single article, stating that the budget was established in accordance with the annex to that decision and was to be signed by the President of each of the two institutions.

15.On 14 December 2010, the President of the Parliament replied to the President of the Council’s letter of 12 November 2010. He told him in particular that, in his view, the Treaty of Lisbon had not altered the fact that it is the President of the Parliament who declares that the budget has been definitively adopted and who, in so doing, signs the budget. The President of the Parliament therefore indicated to the President of the Council that he could not share his view that the Union’s budget must be signed by the Presidents of both those institutions.

16.At its plenary sitting on 15 December 2010, the Parliament approved the Council’s position, without amendments. Following that parliamentary vote, the incumbent President of the Council stated as follows: ‘the Parliament has therefore just approved the Council’s position on the draft budget for 2011, without amendments. I must say, on behalf of the Council, that I am pleased that we have reached a mutual agreement on the 2011 budget’. On the same day, the President of the Parliament signed the act declaring that the procedure initiated pursuant to Article 314 TFEU had been completed and that the Union’s general budget for the financial year 2011 had been definitively adopted.

17.Also on 15 December 2010, the President of the Council sent the President of the Parliament a letter in which he said that he was glad that the Parliament had voted in favour of the 2011 draft budget and alluded to the fact that the FEU Treaty provides that the budget is to be established by the Parliament and the Council. He therefore annexed to that letter a draft decision of the European Parliament and of the Council establishing the European Union’s general budget for the financial year 2011, signed by himself and intended also for signature by the President of the Parliament. However, that request was not acted upon.

That is why the Council decided to bring this action for annulment of the act by which the President of the Parliament declared, on 15 December 2010, that the procedure initiated pursuant to Article 314 TFEU had been completed and that the European Union’s general budget for the financial year 2011 had been definitively adopted.

By order of the President of the Court of 29 June 2011, the Kingdom of Spain was granted leave to appeal in support of the form of order sought by the Council.

IV – The application

A – The two principal arguments

The two arguments put forward by the Council and by the Parliament respectively are based to a large extent on a difference of view as regards the way in which two provisions of Article 314 TFEU, namely the introductory paragraph and paragraph 9, are to be reconciled.

The Council relies on the introductory paragraph of Article 314 TFEU, read in conjunction with several other provisions of the Treaties, in support of its argument that the establishment of the budget requires the joint adoption by the Parliament and the Council of a legislative act signed by the President of both institutions. The act of the President of the Parliament provided for in Article 314(9) TFEU declaring that the budget has been definitively adopted cannot be equated to an act adopting the budget. It is merely a declaratory act adopted by the President of the Parliament after the two institutions have signed the legislative act adopting the budget.

The Parliament, on the other hand, refers to Article 314(9) TFEU and to the Court’s interpretation of what is essentially the same provision in that regard in the EC Treaty, in support of its view that, while agreement between the two institutions is indeed necessary, Article 314 TFEU does not, in any event, require it to be formalised by a legislative act of the Parliament and the Council. Only the act of the President of the Parliament adopted pursuant to Article 314(9) TFEU can confirm the definitive adoption of the budget, following verification of the proper conduct of the procedure, and give legal effect to the budget.

I shall now look in greater detail at the arguments put forward by the Council and the Parliament in support of their respective views.

The Council raises four pleas in support of its action, namely: (i) infringement of Article 314 TFEU, read in conjunction with several other provisions of the Treaties, in the light of the absence of a legislative act of the Parliament and the Council signed by both those institutions: (ii) failure to observe the principal of institutional balance established by that provision; (iii) infringement of the principle that the institutions must act within the limits of their powers and of the duty to cooperate in good faith enshrined in Article 13(2) TEU; and (iv) in the alternative, infringement of essential procedural requirements. Since the arguments invoked in support of those pleas overlap to a large extent, it is in my view expedient, in order to avoid repetition, to set them out together. I shall do the same with my assessment, in order to avoid artificially separating my evaluation of the validity of those arguments.

According to the Council, the Union’s annual budget and the amending budgets must from now on be established by a joint legislative act of the two institutions which have produced them. That act must be signed by the Presidents of those two institutions, in accordance with the second subparagraph of Article 297(1) TFEU. Since the institutions responsible for the special legislative procedure laid down in Article 314 TFEU are, under that article, both the Parliament and the Council, it follows that the act establishing the budget must bear the signatures of the Presidents of both those institutions.

Consequently, the act establishing the budget for the year 2011 is unlawful, since it consists in an atypical and non-legislative act, adopted and signed only by the President of the Parliament, in breach of Article 314 TFEU, Article 288 TFEU, Article 289(2) and (3) TFEU, the first and third paragraphs of Article 296 TFEU, the second subparagraph of Article 297(1) TFEU and Article 13(2) TEU.

According to the Council, Article 314 TFEU requires the adoption of a legislative act and such an act can only be a regulation, a directive or a decision, as stated in Article 289(2) TFEU. The Treaty of Lisbon provides for no exception as regards the legal forms which may be adopted under the special legislative procedure and does not authorise the adoption of a legislative act sui generis or any kind of act sui generis. Moreover, it is apparent from Article 289(3) TFEU that the special legislative procedure laid down in Article 314 TFEU must culminate in the adoption of a legislative act.

The Council states that it is apparent from the introductory paragraph of Article 314 TFEU, in particular from the use of the verb ‘establish’ in the plural, that the special legislative procedure laid down in that provision is different from the other special legislative procedures established by the FEU Treaty in that it entails two main participants. Neither of these participants has precedence over the other. Highlighting the similarities and particularities of that procedure in relation to the ordinary legislative procedure, the Council describes the procedure provided for in Article 314 TFEU as a form of ‘simplified co-decision’.

The confusion between the act by which the President of the Parliament declares that the budget has been definitively adopted and the legislative act establishing the budget precludes the Council from exercising its rights and powers under the Treaty and therefore infringes Article 314 TFEU. While the Council acknowledges that it is for the President of the Parliament, in accordance with Article 314(9) TFEU, to declare that the budget has been definitively adopted, that declaration cannot, in the Council’s view, constitute adoption.

According to the Council, the act of the President of the Parliament solemnly declaring that the two co-authors of the Union’s annual budget have established the budget together constitutes an essential procedural requirement of the budgetary procedure and a prerequisite for the legislative act to take effect. Nevertheless, what that entails is the exercise by the President of the Parliament of a mandatory duty, in that, after the legislative act has been adopted and signed by the two co-authors, the declaration of the definitive adoption of the budget is a necessary formality.

As regards the Court’s judgment of 3 July 1986 in Council v Parliament, in particular the passage which states that ‘[i]t is the President of the Parliament who formally declares that the budgetary procedure has been brought to a close by the final adoption of the budget and thus endows the budget with binding force vis-à-vis the institutions and the Member States’, the Council considers that that assertion was made in a specific context and, furthermore, the development of the subsequent treaties has rendered that case-law obsolete. In particular, under the Treaty of Lisbon the act adopting the budget, its authors and, consequently, its signing are to be viewed from a fresh perspective.

The Council also relies on the first paragraph of Article 296 TFEU in support of its argument that, under that provision, the act establishing the budget must be a joint decision by both institutions. That provision, which cannot be disregarded on the ground that Article 314 TFEU constitutes a lex specialis, has therefore been infringed.

With regard to the principle of institutional balance, the Council notes that, since the distinction between compulsory and non‑compulsory expenditure has been abolished, the two branches of the budgetary authority are now on equal footing, with the same powers, exercised under a co-decision procedure with the aim of reaching a joint agreement in good time for the financing of the European Union in the coming financial year. Article 314 TFEU does not merely set out the former practice in the Treaty, but establishes a new balance between the two branches of the budgetary authority. No institution may have the last word concerning an act adopted under the co-decision procedure.

The requirement for the adoption of a formal act with binding force on the basis of the Treaties does not simply reflect the need for compliance with Articles 288 TFEU and 289(2) TFEU, but also reflects the new balance which the institutions and their organs are under a duty to observe. The circumstances in which the President of the Parliament deemed it appropriate to declare that the budget for the financial year 2011 was definitively adopted indicate that that President, as an organ of his institution, failed in that duty. The act of that President should therefore be annulled.

With regard to the purported infringement of the principle that the institutions must act within the limits of their powers and of the duty to cooperate in good faith enshrined in Article 13(2) TEU, the Council maintains that the act of the President of the Parliament goes beyond the limits of the powers conferred on him by the amended Treaties, infringes the procedures and conditions laid down by the Treaties and disregards Treaty objectives. The formal procedure provided for in Article 314(9) TFEU cannot culminate in a unilateral legal act adopting the budget.

The Council also considers that the Parliament failed to comply with the duty to act in good faith, which must govern relations between the institutions. In particular, it criticises the Parliament for not taking part in its initiatives to find a solution which was consistent with the Treaties, mutually acceptable and had due regard to both the institutions’ powers and those of the President of the Parliament. It also criticises the President of the Parliament for failing on the day of the vote on the budget in plenary sitting, namely 15 December 2010, to inform the President of the Council – even though he was present at that vote – of the content of his letter of 14 December 2010. The Council also states that the President of the Parliament’s letter came to the knowledge of the President of the Council only on 17 December 2010, that is, two days after the declaration that the budget for the financial year 2011 had been definitively adopted.

37.If the Court rejects its principal argument, the Council maintains, in the alternative, that the act of the President of the Parliament should be annulled on the ground of infringement of essential procedural requirements. In particular, the Council takes the view that, from the point at which he became fully aware of the disagreement between the Parliament and the Council regarding the type of act required for the adoption of the budget and the signing of the act, the President of the Parliament was not entitled to declare that the budgetary procedure for the financial year 2011 had been completed. The Council observes that the President of the Parliament did not inform the plenary session of his institution either of the Council’s position, as set out in his letter of 12 November 2010, or of the final attempt by the President of the Council, on the very day on which the Parliament voted on the draft budget, to propose a solution to the dispute. Since the Council’s position on the draft budget included a draft decision for the adoption of the budget by the two institutions, the Council claims that the President of the Parliament adopted the act in question at a time when, in the absence of any agreement between the two institutions as to the type of act required for the adoption of the budget and the signing of the act, the budgetary procedure had not yet been completed. For that reason, the act of the President of the Parliament is unlawful.

38.Finally, in so far as the dispute between the Council and the Parliament does not concern the content of the budget for the year 2011, the Council requests the Court, in the event that it decides to annul the act of the President of the Parliament, to maintain the effects of the budget for the year 2011 until the unlawfulness established has been remedied, in accordance with the second paragraph of Article 264 TFEU.

The Parliament’s arguments

39.The Parliament disputes the argument that the agreement between itself and the Council must culminate in the adoption of a legislative act signed by the Presidents of both those institutions, which may only be a regulation, a directive or a decision, in accordance with Article 289(2) TFEU.

40.The Parliament considers that the procedure for the adoption of the budget is <span class="italic">sui generis</span>. The act of the President of the Parliament provided for in Article 314(9) TFEU is the only act which endows the budget with its binding force ‘vis-à-vis the institutions and the Member States’, as the Court pointed out in its judgment in <span class="italic">Council</span> v <span class="italic">Parliament</span>, cited above, (<span class="note"><a id="c-ECR_62011CC0077_EN_01-E0004" href="#t-ECR_62011CC0077_EN_01-E0004">4</a></span>) which, according to the Parliament, remains relevant following the entry into force of the Treaty of Lisbon. The act of the President of the Parliament is therefore in the nature of a decision. If the authors of the Treaty had intended to alter the Parliament’s powers relating to the definitive adoption of the budget, they would not have maintained, in Article 314(9) TFEU, a provision analogous to that of ex-Article 272(7) EC.

41.According to the Parliament, its President’s act constitutes the adoption of the budget, because without that act the budget is not ‘definitively adopted’, within the meaning of Article 314(9) TFEU. It states that the act of the President of the Parliament is adopted in the exercise of a specific power, that is to say, the power to declare that the budget has been definitively adopted. That means that the President of the Parliament verifies that the procedure has been conducted properly and that the budget complies with the Treaty. That power is not symbolic, the Court having described it as a ‘separate legal act’. (<span class="note"><a id="c-ECR_62011CC0077_EN_01-E0005" href="#t-ECR_62011CC0077_EN_01-E0005">5</a></span>)

42.Furthermore, the Parliament considers that even though the introductory paragraph of Article 314 TFEU provides that the Parliament and the Council are to act in accordance with a special legislative procedure, it does not in any way provide that a regulation, directive or decision must be adopted. If that were the case, those who drafted the Treaty would have expressly stated so.

43.As regards the alleged infringement of the introductory paragraph of Article 296 TFEU, the Parliament considers that that provision does not apply in the case of the budget, since Article 314 TFEU constitutes a <span class="italic">lex specialis</span> in relation to that provision. The fact that the authors of the Treaty did not specify the type of legislative act required is a deliberate choice. Indeed, although the Convention on the Future of Europe and the Treaty establishing a Constitution for Europe envisaged a ‘European law’ for the Union’s budget, the intention of the Intergovernmental Conference of 2007 was to retain in that respect the approach adopted in former Article 272 EC.

44.The Parliament considers that the concepts of regulation, directive or decision, as identified in Article 288 TFEU, are not consonant with the specific nature of the budget. The Parliament states, in that regard, that, unlike any other type of legislation, the budget contains only estimates of revenue and expenditure. Only the implementation of the appropriations entered in the budget requires the prior adoption of a basic act. That fact reveals the dichotomy between the legislative process and the budgetary process. In that regard, the Parliament observes that the budget is adopted in accordance with a <span class="italic">sui generis</span> procedure specifically adapted to the nature and role of that instrument. In particular, that procedure takes account of the accounting nature of the document to be established and the need to ensure that the instrument is adopted before the end of the year.

45.Concerning the alleged requirement that the act adopting the budget be signed by the President of both the institutions, the Parliament points out that what is peculiar to legislative acts adopted in accordance with the special legislative procedure is that they are not signed by the Presidents of the Parliament and the Council, because that applies only to acts adopted in accordance with the ordinary legislative procedure, as stated in Article 297(1)TFEU. Moreover, at no point does Article 314 TFEU provide that the President of the Council has the right to co‑sign the budget. Furthermore, it is necessary to preserve the effectiveness of Article 314(9) TFEU, since that provision constitutes a <span class="italic">lex specialis</span> in relation to Article 297 TFEU.

46.Since the budgetary procedure cannot be equated with the ordinary legislative procedure, it is incorrect to claim, as the Council does, that neither institution has the last word on an act adopted under the co-decision procedure. The Parliament points out, in that regard, that Article 314(7)(d) TFEU envisages a situation in which the President of the Parliament may deem it appropriate to declare that the budget has been adopted, even though only the Parliament has approved the joint text, whilst the Council has rejected it. Such a situation shows that the budget may be adopted and signed by the President of the Parliament even without any agreement being required on the part of the Council.

47.It would be illogical to require that a decision be signed by both the Parliament and the Council in a procedure which provides for the possibility of adopting the budget even if the Council rejects the joint text. Article 314(7)(d) TFEU meets a simple requirement, namely that the budget should be adopted before the end of the year in order to avoid having recourse to what is referred to as the ‘provisional twelfths’ system. Rather than introduce two different procedures, one for the situation in which the Parliament and the Council reach an agreement and one for the situation in which Article 314(7)(d) TFEU must be applied, those who drafted the Treaty chose a single procedure, namely that by which the President of the Parliament declares that the budget has been definitively adopted by a separate legislative act, of an objective nature, even if the procedure is characterised by the joint action of those two institutions.

48.The Parliament also claims that it did not infringe the principle that the institutions must act within the limits of their powers, but that it acted in accordance with Article 314(9) TFEU when it declared that the budgetary procedure had been completed and signed the budget. It considers that, if it had accepted that an independent legislative act, such as a regulation, directive or decision, should be formally adopted and signed by the Presidents of both institutions, as if it were an act adopted under an ordinary procedure, it would have acted <span class="italic">ultra vires</span> and infringed Article 314 TFEU, thus rendering the content of Article 314(9) TFEU meaningless.

49.Moreover, the Parliament maintains that the Council’s argument that it failed in its duty to cooperate in good faith enshrined in Article 13(2) TEU is clearly unfounded. The sole objective of the Parliament and its President was to comply with Article 314 TFEU. Furthermore, the Parliament points out that its President explained its position regarding the Council’s request in his letter of 14 December 2010. The Parliament also notes that, at the vote on the 2011 budget, on 15 December 2010, the President of the Council did not in any way raise the question of the legislative act to be adopted or the matter of the signing of the act. He merely said that he was glad that an agreement had been reached between the two institutions. It was only immediately after the budget had been signed that the President of the Council sent the President of the Parliament a letter enclosing a decision of the Parliament and the Council bearing his signature, even though he was aware of the point of view of the President of the Parliament regarding the signing of the budget.

50.Finally, as regards the alleged infringement of essential procedural requirements, the Parliament claims that it accomplished its task, as required under in Article 314(9) TFEU, by declaring that there was agreement between the two institutions and that the procedure had been conducted properly.

B – Analysis

51.As I have previously pointed out, the dispute between the Council and the Parliament is based to a large extent on the difficulty there may be, prima facie, in reconciling two provisions of Article 314 TFEU. The first provision is in the introductory paragraph of Article 314 TFEU, which provides, it will be recalled, that ‘[t]he European Parliament and the Council, acting in accordance with a special legislative procedure, shall establish the Union’s annual budget in accordance with the following provisions’. The second provision is in Article 314(9) TFEU, which states that ‘[w]hen the procedure provided for in this Article has been completed, the President of the European Parliament shall declare that the budget has been definitively adopted’.

52.While the first of those two provisions constitutes a new formulation of the role of the Parliament and the Council in establishing the Union’s annual budget, the second reflects the continuity of former Article 272(7) EC, the wording of which it reproduces, the only difference, which is of no consequence in my view, being that the [French] verb ‘adopté’ now replaces the verb ‘arrêté’. The power retained by the President of the Parliament to declare that the budget has been definitively adopted must therefore be reconciled with the statement that the Parliament and the Council must henceforth be regarded as co-authors of the Union’s annual budget in its entirety, the distinction between compulsory and non-compulsory expenditure having been abolished. One of the challenges of this action is therefore to ensure the effectiveness of Article 314(9) TFEU while at the same time having due regard for the Council’s status as co-author, with the Parliament, of the budget.

53.I must make it clear at the outset that, in my view, the statement that the Parliament and the Council are to establish the budget together does not mean that its adoption must culminate in a legislative act consisting in a regulation, directive or decision, within the meaning of Article 288 TFEU, which must be signed by the Presidents of both those institutions.

54.I note that there is no express support for the Council’s argument in the wording of Article 314 TFEU. The authors of the Treaty did not therefore choose to state expressly that the Parliament and the Council, acting in accordance with a special legislative procedure, are to establish, by regulation, directive or decision, the Union’s annual budget.

55.The lack of detail regarding the type of act by which the Parliament and the Council are to establish the Union’s annual budget also constitutes a significant difference when a comparison is made with the Treaty establishing a Constitution for Europe, Articles I-56 and the introductory paragraph of Article III-404 of which provided that ‘[a] European law shall establish the Union’s annual budget’.

56.In the absence of any express indication in Article 314 TFEU as regards the need for a legislative act signed by the President of both the Parliament and the Council in order to formalise the adoption of the budget, it is necessary to examine whether, as the Council suggests, the statement in the introductory paragraph of that article that the budget is to be established in accordance with a ‘special legislative procedure’ may endorse the Council’s argument.

57.That statement may, prima facie, give rise to confusion if it is compared with Articles 14(1) TEU and 16(1) TEU. While those two provisions draw a distinction between legislative and budgetary functions, the wording of the introductory paragraph of Article 314 TFEU suggests that the budgetary procedure must be included in the category of legislative procedures. The Council infers from that equating of the budgetary procedure with a legislative procedure that it must culminate in a legislative act chosen from among the acts specified in Article 288 TFEU and be signed by the Presidents of both the Parliament and the Council. I cannot share that view.

58.Adhering to the wording of Article 289(3) TFEU, according to which ‘[l]egal acts adopted by legislative procedure shall constitute legislative acts’, I think it is correct to state that, in so far as it falls within the category of legislative procedures, the budgetary procedure must culminate in the adoption of a legislative act.

59.However, I do not think that this has to be a legislative act signed by the Presidents of both the Parliament and the Council.

60.I note, in that regard, that it may be inferred from the first and second subparagraphs of Article 297(1) TFEU that, while joint signing is indeed the rule under the ordinary legislative procedure, that is not the case for legislative acts adopted in accordance with a special legislative procedure. That conclusion is consistent with Article 289(2) TFEU, that is to say, unlike the ordinary legislative procedure which consists in the joint adoption of a legislative act by the Parliament and the Council, the special legislative procedure is characterised by the adoption of a legislative act by only one of those institutions, with the participation of the other. If the authors of the Treaty had intended the budget to be adopted under a genuine co-decision procedure and given practical effect by a legislative act signed by the Parliament and the Council, they would have specified that the rules governing the ordinary legislative procedure are to apply in connection with the budgetary procedure.

61.The statement that the Union’s annual budget is to be established in accordance with a special legislative procedure is specifically intended to emphasise the fact that, although based on the ordinary legislative procedure, as set out in Article 294 TFEU, for example, as regards the convening of a Conciliation Committee in the event of disagreement between the Parliament and the Council, the budgetary procedure must be distinguished from the ordinary legislative procedure.

62.It is indeed a legislative procedure, in so far as it involves the two branches of the legislative authority, which also constitute the two branches of the budgetary authority, and must culminate in a legislative act. However, that procedure is classified as ‘special’, in that it is adapted to the particular requirements of the budgetary function and to the specific nature of the instrument constituted by the budget.

63.The authors of the Treaty therefore established a specific procedure the different stages of which are consonant with the particular nature of the budget, which is an act setting out forecasts and providing authorisation, subject to the requirement that the procedure be swift in order that a vote may be taken on the budget before the beginning of the coming financial year, and to the need to achieve a successful outcome by overcoming any disagreement between the Parliament and the Council.

64.This procedure is subject to a tight timetable and is organised in such a way that an agreement between the Parliament and the Council may be reached in good time in order to avoid, as far as possible, recourse to the provisional twelfths scheme in the following financial year.

65.Agreement between the Parliament and the Council may occur at various stages. At best, it will occur when the Parliament approves the Council’s position at the end of the first stage, in accordance with Article 314(4)(a) TFEU. If the Parliament adopts amendments by a majority of its component members, a meeting of the Conciliation Committee is to be convened, unless the Council informs the Parliament that it has approved all its amendments.

66.If the Conciliation Committee meets, a second stage is initiated in order to seek an agreement on a joint text between the members of the Council or their representatives and the members representing the Parliament. If, within twenty‑one days of its being convened, the Conciliation Committee agrees on a joint text, the Parliament and the Council each have a period of fourteen days from the date of that agreement in which to approve the joint text.

67.Several situations may then arise.

68.If the Parliament and the Council both approve the joint text or fail to take a decision, or if one of those institutions approves the joint text while the other one fails to take a decision, the budget is deemed to be definitively adopted in accordance with the joint text.

69.On the other hand, if the Parliament, acting by a majority of its component members, and the Council both reject the joint text, or if one of these institutions rejects the joint text while the other one fails to take a decision, the budget cannot be deemed to have been adopted and a new draft budget must be submitted by the European Commission. (14)

70.Conversely, the situation in which the Council rejects the joint text while the Parliament approves it does not necessarily preclude the adoption of the budget. The Council’s rejection of the joint text may, in certain circumstances, be overcome. Accordingly, Article 314(7)(d) TFEU provides that the Parliament may, acting by a majority of its component members and three-fifths of the votes cast, decide to confirm all or some of the amendments referred to in Article 314(4)(c) EEC. Article 314(7)(d) TFEU also states that where a Parliament amendment is not confirmed, the position agreed in the Conciliation Committee on the budget heading, which is the subject of the amendment, is to be retained. The budget is deemed to be definitively adopted on this basis.

71.Finally, if, within the twenty-one day period referred to in Article 314(5) TFEU, the Conciliation Committee does not agree on a joint text, a new draft budget is to be submitted by the Commission. (16)

72.I infer from that description of the budgetary procedure as now prescribed in Article 314 TFEU that the budget may be adopted only when agreement has been reached between the Parliament and the Council. Even in the specific case referred to in Article 314(7)(d) TFEU, which confers on the Parliament the power to disregard the Council’s rejection of the joint text, the budget is deemed to have been adopted on the basis of an agreement reached in the Conciliation Committee. It is the existence of an agreement reached in a procedure favouring collaboration and consultation between the Parliament and the Council (17) which permits the inference that the budget has been established by those two institutions, in accordance with the requirements of the introductory paragraph of Article 314 TFEU.

73.Whatever the situation envisaged, the agreement thus reached between the Parliament and the Council does not need, contrary to what the latter claims, to be formalised by a legislative act signed by the Presidents of both those institutions for the budget to be deemed to have been adopted.

74.Moreover, with reference to the situation envisaged in Article 314(7)(d) TFEU, I think it is difficult to argue that the authors of the Treaty intended to make the adoption of the budget subject to the requirement that it be signed by the President of the Council even where that institution has rejected the joint text.

75.Furthermore, there is no express or implicit requirement under Article 314 TFEU for a legislative act signed by the Presidents of both the Parliament and the Council in order for it to be possible for the budget to produce legal effects.

76.To decide otherwise would amount, as the Parliament claims, to negating the effectiveness of the act of the President of the Parliament provided for in Article 314(9) TFEU.

77.It is clear that the authors of the Treaty of Lisbon decided to retain, in almost unaltered terms, that final stage of the budgetary procedure, by which the President of the Parliament declares that the budget has been definitively adopted. Moreover, there is nothing to indicate that they intended to remove from that act of the President of the Parliament the legal effects acknowledged by the Court’s case‑law.

78.In those circumstances, I consider that the act by which the President of the Parliament declares that the budget has been definitively adopted must be accorded the same function and the same legal effects as it had before the entry into force of the Treaty of Lisbon.

79.It is apparent, in that regard, from the Court’s case-law that, by that act, ‘[i]t is the President of the Parliament who formally declares that the budgetary procedure has been brought to a close by the final adoption of the budget and thus endows the budget with binding force vis-à-vis the institutions and the Member States. In exercising that function, the President of the Parliament intervenes by means of a separate legal act of an objective nature at the conclusion of a procedure characterised by the joint action of various institutions’. (18)

80.In other words, during that final stage of the procedure, the function of the act of the President of the Parliament is to vouch for the correct implementation and completion of the budgetary procedure. It is also that act of the President of the Parliament which enables the budget to produce legal effects vis-à-vis the institutions and the Member States.

81.The act of the President of the Parliament therefore constitutes the legislative act, comparable to a decision producing binding legal effects within the meaning of the fourth paragraph of Article 288 TFEU, which brings to a conclusion the special legislative procedure provided for in Article 314 TFEU. (19) It is, in short, the budgetary decision without which the budget would remain an instrument lacking legal effects. (20)

82.That budgetary decision is, of course, a challengeable act, as demonstrated by the present proceedings. Such a decision is especially likely to be annulled if it is adopted in the absence of any agreement between the Parliament and the Council on the content of the budget in accordance with the conditions laid down in Article 314 TFEU.

83.That is not the position in the present case. It is clear from the documents in the case-file that an unequivocal agreement was reached between the Parliament and the Council on the content of the budget for the financial year 2011. The fact that those two institutions disagreed as to the formalisation of that agreement did not preclude the President of the Parliament from adopting, on 15 December 2010, the act declaring that the procedure initiated under Article 314 TFEU had been completed and that the Union’s general budget for the financial year 2011 had been definitively adopted.

84.In the light of all those considerations, I propose that the Court reject as unfounded the Council’s principle plea, alleging infringement of Article 314 TFEU on the ground that no legislative act signed by the Presidents of both the Parliament and the Council was adopted.

85.Moreover, since I consider that the Parliament acted in compliance with Article 314 TFEU, it cannot be alleged that it failed to adhere to the principle of institutional balance established by Article 314 TFEU, that it infringed the principle that the institutions must act within the limits of their powers and the duty of the institutions to cooperate good faith, or that it infringed essential procedural requirements.

V – Conclusion

86.In the light of the foregoing considerations, I propose that the Court should:

dismiss the action; and

order the Council of the European Union to pay the costs, and the Kingdom of Spain to bear its own costs.

* * *

(1) Original language: French.

(2) OJ 2011, L 68, p. I/1.

(3) Case 34/86, ECR 2155.

(4) Paragraph 8.

(5) Council v Parliament, paragraph 8.

(6) I also note that, in the English version of the Treaty, the word ‘adopted’ remains unchanged.

(7) See Council v Parliament, paragraph 6, which states that the budget is an ‘instrument which sets out forecasts of, and authorises in advance, the revenue and expenditure for each year’.

(8) See Article 315 TFEU.

(9) Article 314(4)(b) TFEU also provides that, if the Parliament has not taken a decision, the budget is to be deemed to have been adopted.

(10) See Article 314(4)(c) TFEU.

(11) See Article 314(5) TFEU.

(12) See Article 314(6) TFEU.

(13) See Article 314(7)(a) TFEU.

(14) See Article 314(7)(b) TFEU.

(15) See Article 314(7)(c) TFEU.

(16) See Article 314(8) TFEU.

(17) Thus, Article 314 TFEU formalises and consolidates the practice of dialogue which has been the subject of interinstitutional agreements.

(18) Council v Parliament, paragraph 8.

(19) Since such an act is expressly provided for in Article 314(9) TFEU in connection with the special legislative procedure at issue, the first and third paragraphs of Article 296 TFEU are irrelevant.

(20) The attribution of legal effects to the budget does not, in principle, exempt the Union institutions, when they wish to implement expenditure shown in the budget, from the requirement to adopt a legally binding act providing a legal basis for the activities of the European Union, in accordance with the provisions of Article 310(3) TFEU.