Chapter 4

TRANSITIONAL PROVISIONS ARTICLE 109e 1. The second stage for achieving economic and monetary union shall begin on 1 January 1994. 2. Before that date (a) each Member State shall: - adopt, where necessary, appropriate measures to comply with the prohibitions laid down in article 73b, without prejudice to Article 73e, and in Articles 104 and 104a(1); - adopt, if necessary, with a view to permitting the assessment provided for in subparagraph (b), multiannual programmes intended to ensure the lasting convergence necessary for the achievement of economic and monetary union, in particular with regard to price stability and sound public finances; (b) the Council shall, on the basis of a report from the Commission, assess the progress made with regard to economic and monetary convergence, in particular with regard to price stability and sound public finances, and the progress made with the implementation of Community law concerning the internal market. 3. The provision of Articles 104, 104a(1), 104b(1), and 104c with the exception of paragraphs 1,9,11 and 14 shall apply from the beginning of the second stage. The provision of Articles 103a(2), 104c(1), (9) and (11), 105, 105a, 107, 109, 109a, 109b and 109c(2) and (4) shall apply from the beginning of the third stage. 4. In the second stage, Member States shall endeavour to avoid excessive government deficits. 5. During the second stage, each Member State shall, as appropriate, start the process leading to the independence of its central bank, and in accordance with Article 108. ARTICLE 109f 1. At the start of the second stage, a European Monetary Institute (hereinafter referred to as "EMI") shall be established and take up its duties; it shall have legal personality and be directed and managed by a Council, consisting of a President and the Governors of the national central banks, one of whom shall be Vice-President. The President shall be appointed by common accord of the Governments of the Member States at the level of Heads of State or of Government, on a recommendation from, as the case may be, the Committee of Governors of the central banks of the Member States (hereinafter referred to as "Committee of Governors") or the Council of the EMI, and after consulting the European Parliament and the Council. The President shall be selected from among persons of recognized standing and professional experience in monetary or banking matters. Only nationals of Member States may be President of the EMI. The Council of the EMI shall appoint the Vice-President. The Statute of the EMI is laid down in a Protocol annexed to this Treaty. The Committee of Governors shall be dissolved at the start of the second stage. 2. The EMI shall: - strengthen co-operation between the national central banks; - strengthen the co-ordination of monetary policies of the Member States, with the aim of ensuring price stability; - monitor the functioning of the European Monetary System; - hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets; - take over the tasks of the European Monetary Cooperation Fund, which shall be dissolved; the modalities of dissolution are laid down in the Statute of the EMI; - facilitate the use of the ECU and oversee its development, including the smooth functioning of the ECU clearing system. 3. For the preparation of the third stage, the EMI shall: - prepare the instruments and procedures necessary for carrying out a single monetary policy in the third stage; - promote the harmonization, where necessary, of rules and practices governing the collection, compilation and distribution of statistics in the areas in the areas within its field of competence; - prepare the rules for operations to be undertaken by the national central banks within the framework of the ESCB; - promote the efficiency of cross-border payments; - supervise the technical preparation of ECU bank notes. At the latest by 31 December 1996, the EMI shall specify the regulatory, organizational and logistical framework necessary for the ESCB to perform its tasks in the third stage. This framework shall be submitted for decision to the ECB at the date of its establishment. 4. The EMI, acting by a majority of two thirds of the members of its Council, may: - formulate opinions or recommendations on the overall orientation of monetary policy and exchange rate policy as well as on related measures introduced in each Member State; - submit opinions or recommendations to Governments and to the Council on policies which might affect the internal or external monetary situation in the Community and, in particular, the functioning of the European Monetary System; - make recommendations to the monetary authorities of the Member States concerning the conduct of monetary policy. 5. The EMI, acting unanimously, may decided to publish its opinions and its recommendations. 6. The EMI shall be consulted by the Council regarding any proposed Community act within its field of competence. Within the limits and under the conditions set out by the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the EMI, the EMI shall be consulted by the authorities of the Member States on any draft legislative provision within its field of competence. 7. The Council may, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the EMI, confer upon the EMI other tasks for the preparation of the third stage. 8. Where this Treaty provides for a consultative role for the ECB, reference to the ECB shall be read as referring to the EMI before the establishment of the ECB. Where this Treaty provides for a consultative role for the EMI, references to the EMI shall be read, before 1 January 1994, as referring to the Committee of Governors. 9. During the second stage, the term "ECB" used in Articles 173, 175, 176, 177, 180 and 215 shall be read as referring to the EMI. ARTICLE 109g The currency composition of the ECU basket shall not be changed. From the start of the third stage, the value of the ECU shall be irrevocably fixed in accordance with Article 109l(4). ARTICLE 109h 1. Where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of a overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardize the functioning of the common market or the progressive implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all means at its disposal, that State has taken or may take in accordance with the provisions of this Treaty. The Commission shall state what measures it recommends the State concerned to take. If the action taken by a Member States and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Committee referred to in Article 109c, recommend to the Council the granting of mutual assistance and appropriate methods therefor. The Commission shall keep the Council regularly informed of the situation of how it is developing. 2. The Council, acting by a qualified majority, shall grant such mutual assistance; it shall adopt directives or decisions laying down the conditions and details of such assistance, which may take such forms as: (a) a concerted approach to or within any other international organizations to which Member States may have recourse; (b) measures needed to avoid deflection of trade where the State which is in difficulties maintains or reintroduces quantitative restrictions against third countries; (c) the granting of limited credits by other Member States, subject to their agreement. 3. If the mutual assistance recommended by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorize the State which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine. Such authorization may be revoked and such conditions and details may be changed by the Council acting by a qualified majority. 4. Subject to Article 109k(6), this Article shall cease to apply from the beginning of the third stage. ARTICLE 109i 1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article 109h(2) is not immediately taken, the Member State concerned may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the common market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen. 2. The Commission and the other Member State shall be informed of such protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutual assistance under Article 109h. 3. After the Commission has delivered an opinion and the Committee referred to in Article 109c has been consulted, the Council may, acting by a qualified majority, decide that the State concerned shall amend, suspend or abolish the protective measures referred to above. 4. Subject to Article 109k(6), this Article shall cease to apply from the beginning of the third stage. ARTICLE 109j 1. The Commission and the EMI shall report to the Council on the progress made in the fulfilment by the Member States of their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each Member State's national legislation, including the statutes of its national central bank, and Articles 107 and 108 of this Treaty and the Statute of the ESCB. The report shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria: - the achievement of a high degree of price stability; this will be apparent from rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability; - the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 104c(6); - the observance of the normal fluctuation margins provided for by the Exchange Rate Mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State; - the durability of convergence achieved by the Member State and of its participation in the Exchange Rate Mechanism of the European Monetary System being reflected in the long-term interest rate levels. The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to this Treaty. The reports of the Commission and the EMI shall also take account of the development of the ECU, the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices. 2. On the basis of these reports, the Council, acting by a qualified majority on a recommendation from the Commission, shall assess: - for each Member State, whether it fulfils the necessary conditions for the adoption of a single currency; - where a majority of the Member States fulfil the necessary conditions for the adoption of a single currency, and recommend its findings to the Council, meeting in the composition of the Heads of State or of Government. The European Parliament shall be consulted and forward its opinion to the Council, meeting in the composition of the Heads of State or of Government. 3. Taking due account of the reports referred to in paragraph 1 and the opinion of the European Parliament referred to in paragraph 2, the Council, meeting in the composition of Heads of State or of Government, shall acting by a qualified majority, not later than 31 December 1996: - decide, on the basis of the recommendations of the Council referred to in paragraph 2, whether a majority of the Member States fulfil the necessary conditions for the adoption of a single currency; - decide whether it is appropriate for the Community to enter the third stage, and if so - set the date for the beginning of the third stage. 4. If by the end of 1997 the date for the beginning of the third stage has not been set, the third stage shall start on 1 January 1999. Before 1 July 1998, the Council, meeting in the composition of heads of State or of Government, after a repetition of the procedure provided for in paragraphs 1 and 2, with the exception of the second indent of paragraph 2, taking into account the reports referred to in paragraph 1 and the opinion of the European parliament, shall, acting by a qualified majority and on the basis of the recommendations of the Council referred to in paragraph 2, confirm which member States fulfil the necessary conditions for the adoption of a single currency. ARTICLE 109k 1. If the decision has been taken to set the date in accordance with Article 109j(3), the Council shall, on the basis of its recommendation referred to in Article 109j(2), acting by a qualified majority on a recommendation from the Commission, decide whether any, and if so which, Member States shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as "Member States with a derogation". If the Council has confirmed which Member States fulfil the necessary conditions for the adoption of a single currency, in accordance with Article 109j(4), those Member States which do not fulfil the conditions shall have a derogation as defined in paragraph 3 of this Article. Such Member States shall in this Treaty be referred to as "Member States with a derogation". 2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 109j(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or of Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 109j(1), and abrogate the derogations of the Member States concerned. 3. A derogation referred to in paragraph 1 shall entail that the following Articles do not apply to the Member State concerned: Articles 104c(9) and (11), 105(1),(2), (3) and (5), 105a, 108a, 109, 109a(2)(b). The exclusion of such a Member State and its national central bank from rights and obligations within the ESCB is laid down in Chapter IX of the Statute of the ESCB. 4. In Articles 105(1), (2) ,and (3), 105a, 108a, 109 and 109a(2)(b), "Member States" shall be read as "Member States without a derogation". 5. The voting rights of Member States with a derogation shall be suspended for the Council decisions referred to in the Articles of this Treaty mentioned in paragraph 3. In that case, by way of derogation from Articles 148 and 189a(1), a qualified majority shall be defined as two thirds of the votes of the representatives of the Member States without derogation weighted in accordance with Article 148(2), and unanimity of those Member States shall be required for an act requiring unanimity. 6. Articles 109h and 109i shall continue to apply to a Member State with a derogation. ARTICLE 109l 1. Immediately after the decision on the date for the beginning of the third stage has been taken in accordance with Article 109j(3), or, as the case may be, immediately after 1 July 1998: - the Council shall adopt the provisions referred to in Article 106(6); - the governments of the Member States without a derogation shall appoint, in accordance with the procedure set out in Article 50 of the Statute of the ESCB, the President, the Vice-President and the other members of the Executive Board of the ECB. If there are Member States with a derogation, the number of members of the Executive Board may be smaller than provided for in Article 11.1 of the Statute of the ESCB, but in no circumstances shall it be less than four. As soon as the Executive Board is appointed, the ESCB and the ECB shall be established and shall prepare for their full operation as described in this Treaty and the Statute of the ESCB. The full exercise of their powers shall start from the first day of the third stage. 2. As soon as the ECB is established, it shall, if necessary, take over tasks of the EMI. The EMI shall go into liquidation upon the establishment of the ECB; the modalities of liquidation are laid down in the Statute of the EMI. 3. If and as long as there are Member States with a derogation, and without prejudice to Article 106(3) of this Treaty, the general Council of the ECB referred to in Article 45 of the Statute of the ESCB shall be constituted as a third decision-making body of the ECB. 4. At the starting date of the third stage, the Council shall, acting with the unanimity of the Member States without derogation, on a proposal from the Commission and after consulting the ECB, adopt the conversion rates at which their currencies shall be irrevocably fixed and at which irrevocably fixed rate the ECU shall be substituted for these currencies, and the ECU will become a currency in its own right. This measure shall by itself not modify the external value of the ECU. The Council shall, acting according to the same procedure, also take the other measures necessary for the rapid introduction of the ECU as the single currency of those Member States. 5. If it is decided, according to the procedure set out in Article 109k(2), to abrogate a derogation, the Council shall, acting with the unanimity of the Member States without a derogation and the Member State concerned, on a proposal from the Commission and after consulting the ECB, adopt the rate at which the ECU shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the ECU as the single currency in the Member State concerned. ARTICLE 109m 1. Until the beginning of the third stage, each Member State shall treat its exchange rate policy as a matter of common interest. In doing so, Member States shall take account of the experience acquired in co- operation within the framework of the European Monetary System (EMS) and in developing the ECU, and shall respect existing powers in this field. 2. From the beginning of the third stage and for as long as a member State has a derogation, paragraph 1 shall apply by analogy to the exchange rate policy of that Member State." 26) In Title II of Part Three, the title of Chapter 4 shall be replaced by the following: "TITLE VII Common Commercial Policy" 27) Article 111 shall be repealed. 28) Article shall be replaced with the following: "ARTICLE 113 1. The common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. 2. The Commission shall submit proposals to the Council for implementing the common commercial policy. 3. Where agreements with one or more States or international organizations need to be negotiated, the Commission shall make recommendations to the Council, which shall authorize the Commission to open the necessary negotiations. The Commission shall conduct these negotiations in consultation with a special committee appointed by the Council to assist the Commission in this task and within the framework of such directives as the Council may issue to it. The relevant provision of Article 228 shall apply. 4. In exercising the powers conferred upon it by this Article, the Council shall act by a qualified majority." 29) Article 114 shall be repealed. 30) Article 115 shall be replaced by the following: "ARTICLE 115 In order to ensure that the execution of measures of commercial policy taken in accordance with this Treaty by any Member State is not obstructed by deflection of trade, or where differences between such measures lead to economic difficulties in one or more Member States, the Commission shall recommend the methods for the requisite co- operation between Member States. Failing this, the Commission may authorise Member States to take the necessary protective measures, the conditions and details of which it shall determine. In case of urgency,Member States shall request authorization to take the necessary measures themselves from the Commission, which shall take a decision as soon as possible; the Member States concerned shall then notify the measures to the other Member States. The Commission may decide at any time that the Member States concerned shall amend or abolish the measures in question. In the selection of such measures, priority shall be given to those which cause the least disturbance to the functioning of the common market." 31) Article 116 shall be repealed. 32) In Part Three, the title of Title III shall be replaced by the following: "TITLE VIII Social Policy, Education, Vocational Training and Youth" 33) The first subparagraph of Article 118a(2) shall be replaced by the following: "2. In order to help achieve the objective laid down in the first paragraph, the Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee, shall adopt by means of directives, minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States." 34) Article 123 shall be replaced by the following: "ARTICLE 123 In order to improve employment opportunities for workers in the internal market and to contribute thereby to raising the standard of living, a European Social Fund is hereby established in accordance with the provisions set out below; it shall aim to render the employment of workers easier and to increase their geographical and occupational mobility within the Community, and to facilitate their adaptation to industrial changes and to changes in production systems, in particular through vocational training and retraining". 35) Article 125 shall be replaced by the following: "ARTICLE 125 The Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee, shall adopt implementing decisions relating to the European Social Fund." 36) Articles 126,127 and 128 shall be replaced by the following:

"CHAPTER 3 EDUCATION, VOCATIONAL TRAINING AND YOUTH ARTICLE 126 1. The Community shall contribute to the development of quality education by encouraging co-operation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organization of education systems and their cultural and linguistic diversity. 2. Community action shall be aimed at: - developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States; - encouraging mobility of students and teachers, inter alia by encouraging the academic recognition of diplomas and periods of study; - promoting co-operation between educational establishments; - developing exchanges of information and experience on issues common to the education systems of the Member States; - encouraging the development of youth exchanges and of exchanges of socio-educational instructors; - encouraging the development of distance education. 3. The Community and the Member States shall foster co-operation with third countries and the competent international organizations in the field of education, in particular the Council of Europe 4. In order to contribute to the achievement of the objectives referred to in this Article, the Council: - acting in accordance with the procedure referred to in Article 189b, after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonization of the laws and regulations of the Member States; - acting by a qualified majority on a proposal from the Commission, shall adopt recommendations. ARTICLE 127 1. The Community shall implement a vocational training policy which shall support and supplement the action of the Member States, while fully respecting the responsibility of the Member States for the content and organization of vocational training. 2. Community action shall aim to: - facilitate adaptation to industrial changes, in particular through vocational training and retraining; - improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market; - facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people; - stimulate co-operation on training between educational or training establishments and firms; - develop exchanges of information and experience on issues common to the training systems of the Member States. 3. The Community and the Member States shall foster co-operation with third countries and the competent international organizations in the sphere of vocational training. 4. The Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee, shall adopt measures to contribute to the achievement of the objectives referred to in this Article, excluding any harmonization of the laws and regulations of the Member States." 37) The following shall be inserted: "TITLE IX Culture ARTICLE 128 1. The Community shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore. 2. Action by the Community shall be aimed at encouraging co- operation between Member States and, if necessary, supporting and supplementing their action in the following areas: - improvement of the knowledge and dissemination of the culture and history of the European peoples; - conservation and safeguarding of cultural heritage of European significance; - non-commercial cultural exchanges; - artistic and literary creation, including in the audiovisual sector. 3. The Community and the Member States shall foster co-operation with third countries and the competent international organizations in the sphere of culture, in particular the Council of Europe. 4. The Community shall take cultural aspects into account in its action under other provisions of this Treaty. 5. In order to contribute to the achievement of the objectives referred to in this Article, the Council: - acting in accordance with the procedure referred to in Article 189b and after consulting the Committee of the Regions, shall adopt incentive measures, excluding any harmonization of the laws and regulations of the Member States. The Council shall act unanimously throughout the procedures referred to in Article 189b; - acting unanimously on a proposal from the Commission, shall adopt recommendations." 38) Titles IV, V, VI and VII shall be replaced by the following: "TITLE X Public Health ARTICLE 129 1. The Community shall contribute towards ensuring a high level of human health protection by encouraging co-operation between the Member States and, if necessary, lending support to their action. Community action shall be directed towards the prevention of diseases, in particular the major health scourges, including drug dependence, by promoting research into their causes and their transmission, as well as health information and education. Health protection requirements shall form a constituent part of the Community's other policies. 2. Member States shall, in liaison with the Commission, co-ordinate among themselves their policies and programmes in the areas referred to in paragraph 1. The Commission may, in close contact with the Member States, take any useful initiative to promote such co- ordination. 3. The Community and the Member States shall foster co-operation with third countries and the competent international organizations in the sphere of public health. 4. In order to contribute to the achievement of the objectives referred to in this Article, the Council: - acting in accordance with the procedure referred to in Article 189b, after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonization of the laws and regulations of the Member States; - acting by a qualified majority on a proposal from the Commission, shall adopt recommendations. TITLE XI Consumer protection ARTICLE 129a 1. The Community shall contribute to the attainment of a high level of consumer protection through: (a) measures adopted pursuant to Article 100a in the context of the completion of the internal market; (b) specific action which supports and supplements the policy pursued by the Member States to protect the health, safety and economic interests of consumers and to provide adequate information to consumers. 2. The Council, acting in accordance with the procedure referred to in Article 189b and after consulting the Economic and Social Committee, shall adopt the specific action referred to in paragraph 1(b). 3. Action adopted pursuant to paragraph 2 shall not prevent any Member State from maintaining or introducing more stringent protective measures. Such measures must be compatible with this Treaty. The Commission shall be notified of them. TITLE XII Trans-European networks ARTICLE 129b 1. To help achieve the objectives referred to in Articles 7a and 130a and to enable citizens of the Union, economic operators and regional and local communities to derive the full benefit from the setting up of an area without internal frontiers, the Community shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures. 2. Within the framework of a system of open and competitive markets, action by the Community shall aim at promoting the interconnection and inter-operability of national networks as well as access to such networks. It shall take account in particular of the need to link island, landlocked and peripheral regions with the central regions of the Community. ARTICLE 129c 1. In order to achieve the objectives referred to in Article 129b, the Community: - shall establish a series of guidelines covering the objectives, priorities and broad lines of measures envisaged in the sphere of trans-European networks; these guidelines shall identify projects of common interest; - shall implement any measures that may prove necessary to ensure the inter-operability of the networks, in particular in the field of technical standardization; - may support the financial efforts made by the Member States for projects of common interest financed by Member States, which are identified in the framework of the guidelines referred to in the first indent, particularly through feasibility studies, loan guarantees or interest rate subsidies; the Community may also contribute, through the Cohesion Fund to be set up no later than 31 December 1993 pursuant to Article 130d, to the financing of specific projects in Member States in the area of transport infrastructure. The Community's activities shall take into account the potential economic viability of the projects. 2. Member States shall, in liaison with the Commission, co-ordinate among themselves the policies pursued at national level which may have a significant impact on the achievement of the objectives referred to in Article 129b. The Commission may, in close co-operation with the Member States, take any useful initiative to promote such co- ordination. 3. The Community may decide to co-operate with third countries to promote projects of mutual interest and to ensure the inter-operability of networks. ARTICLE 129d The guidelines referred to in Article 129c(1) shall be adopted by the Council, acting in accordance with the procedure referred to in Article 189b and after consulting the Economic and Social Committee and the Committee of the Regions. Guidelines and projects of common interest which relate to the territory of a Member State shall require the approval of the Member State concerned. The Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt the other measures provided for in Article 129c(1). TITLE XIII Industry ARTICLE 130 1. The Community and the Member States shall ensure that the conditions necessary for the competitiveness of the Community's industry exist. For that purpose, in accordance with a system of open and competitive markets, their action shall be aimed at: - speeding up the adjustment of industry to structural changes; - encouraging an environment favourable to initiative and to the development of undertakings throughout the Community, particularly small and medium-sized undertakings; - encouraging an environment favourable to co-operation between undertakings; - fostering better exploitation of the industrial potential of policies of innovation, research and technological development. 2. The Member States shall consult each other in liaison with the Commission and, where necessary, shall co-ordinate their action. The Commission may undertake any useful initiative to promote such co- ordination. 3. The Community shall contribute to the achievement of the objectives set out in paragraph 1 through the policies and activities it pursues under other provisions of this Treaty. The Council, acting unanimously on a proposal from the Commission, after consulting the European Parliament and the Economic and Social Committee, may decide on specific measures in support of action taken in the Member States to achieve the objectives set out in paragraph 1. This Title shall not provide a basis for the introduction by the Community of any measure which could lead to a distortion of competition. TITLE XIV Economic and social cohesion ARTICLE 130a In order to promote its overall harmonious development, the Community shall develop and pursue its actions in leading to the strengthening of its economic and social cohesion. In particular, the Community shall aim at reducing the disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, including rural areas. ARTICLE 130b Member States shall conduct their economic policies and shall co- ordinate them is such a way as, in addition, to attain the objectives set out in Article 130a. The formulation and implementation of the Community's policies and actions and the implementation of the internal market shall take into account the objectives set out in Article 130a and shall contribute to their achievement. The Community shall also support the achievement of these objectives by the action it takes through the Structural Funds (European Agricultural Guidance and Guarantee Fund, Guidance Section; European Social Fund; European Regional Development Fund), the European Investment Bank and other existing financial instruments. The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals. If specific actions prove necessary outside the Funds and without prejudice to the measures decided upon within the framework of the other Community policies, such actions may be adopted by the Council acting unanimously on a proposal from the Commission and after consulting the European Parliament, the Economic and Social Committee and the Committee of the Regions. ARTICLE 130c The European Regional Development Fund is intended to help redress the main regional imbalances in the Community through participation in the development and structural adjustments of regions whose development is lagging behind and in the conversion of declining industrial regions. ARTICLE 130d Without prejudice to Article 130e, the Council, acting unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament and consulting the Economic and Social Committee and the Committee of the Regions, shall define the tasks, priority objectives and the organization of the Structural Funds, which may involve grouping the Funds. The Council, acting by the same procedure, shall also define the general rules applicable to them and the provisions necessary to ensure their effectiveness and the co- ordination of the Funds with one another and with the other existing financial instruments. The Council, acting in accordance with the same procedure, shall before 31 December 1993 set up a Cohesion Fund to provide a financial contribution to projects in the fields of environment and trans- European networks in the area of transport infrastructure. ARTICLE 130e Implementing decisions relating to the European Regional Development Fund shall be taken by the Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee and the Committee of the Regions. With regard to the European Agricultural Guidance and Guarantee Fund - Guidance Section, and the European Social Fund, articles 43 and 125 respectively shall continue to apply. TITLE XV Research and technological development ARTICLE 130f 1. The Community shall have the objective of strengthening the scientific and technological bases of Community industry and encouraging it to become more competitive at international level, while promoting all the research activities deemed necessary by virtue of other Chapters of this Treaty. 2. For this purpose the Community shall, throughout the Community, encourage undertakings, including small and medium-sized undertakings, research centres and universities in their research and technological development activities of high quality; it shall support their efforts to co-operate with one another, aiming, notably, at enabling undertakings to exploit the internal market potential to the full, in particular through the opening up of national public contracts, the definition of common standards and the removal of legal and fiscal obstacles to that co-operation. 3. All community activities under this Treaty in the area of research and technological development, including demonstration projects, shall be decided on and implemented in accordance with the provisions of this Title. ARTICLE 130g In pursuing these objectives, the Community shall carry out the following activities, complementing the objectives complementing the activities carried out in the Member States: (a) implementation of research, technological development and demonstration programmes, by promoting co-operation with and between undertakings, research centres and universities; (b) promotion of co-operation in the field of Community research, technological development and demonstration with third countries and international organizations; (c) dissemination and optimization of the results of activities in Community research, technological development and demonstration; (d) stimulation of the training and mobility of researchers in the Community. ARTICLE 130h 1. The Community and the Member States shall co-ordinate their research and technological development activities so as to ensure that national policies and Community policy are mutually consistent. 2. In close co-operation with the Member States, the Commission may take any useful initiative to promote the co-ordination referred to in paragraph 1. ARTICLE 130i 1. A multiannual framework programme, setting out all activities of the Community, shall be adopted by the Council, acting in accordance with the procedure referred to in Article 189b after consulting the Economic and Social Committee. The Council shall act unanimously throughout the procedures referred to in Article 189b. The framework programme shall: - establish the scientific and technological objectives to be achieved by the activities provided for in Article 130g and fix the relevant priorities; - indicate the broad lines of such activities; - fix the maximum overall amount and the detailed rules for Community financial participation in the framework programme and the respective shares in each of the activities provided for. 2. The framework programme shall be adapted or supplemented as the situation changes. 3. The framework programme shall be implemented through specific programmes developed within each activity. Each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary. The sum of the amounts deemed necessary, fixed in the specific programmes, may not exceed the overall maximum amount fixed for the framework programme and each activity. 4. The Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt the specific programmes. ARTICLE 130j For the implementation of the multiannual framework programme the Council shall: - determine the rules for the participation of undertakings, research centres and universities; - lay down the rules governing the dissemination of research results. ARTICLE 130k In implementing the multiannual framework programmes, supplementary programmes may be decided on involving the participation of certain Member States only, which shall finance them subject to possible Community participation. The Council shall adopt the rules applicable to supplementary programmes, particularly as regards the dissemination of knowledge and access by other Member States. ARTICLE 130l In implementing the multiannual framework programme the Community may make provision, in agreement with the Member States concerned, for participation in research and development programmes undertaken by several Member States, including participation in the structures created for the execution of those programmes. ARTICLE 130m In implementing the multiannual framework programme the Community may make provision for co-operation in Community research, technological development and demonstration with third countries or international organizations. The detailed arrangements for such co-operation may be the subject of agreements between the Community and the third parties concerned, which shall be negotiated and concluded in accordance with Article 228. ARTICLE 130n The Community may set up joint undertakings or any other structure necessary for the efficient execution of Community research, technological development and demonstration programmes. ARTICLE 130o The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt the provisions referred to in Article 130n. The Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee, shall adopt the provisions referred to in Articles 130j to l. Adoption of the supplementary programmes shall require the agreement of the Member States concerned. ARTICLE 130p At the beginning of each year the Commission shall send a report to the European Parliament and the Council. The report shall include information on research and technological development activities and the dissemination of results during the previous year, and the work programme for the current year. TITLE XVI Environment ARTICLE 130r 1. Community policy on the environment shall contribute to pursuit of the following objectives: - preserving, protecting and improving the quality of the environment; - protecting human health; - prudent and rational utilization of natural resources; - promoting measures at international level to deal with regional or worldwide environmental problems. 2. Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and on the principles that preventative action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay. Environmental protection requirements must be integrated into the definition and implementation of other Community policies. In this context, harmonization measures answering these requirements shall include, where appropriate, a safeguard clause allowing Member States to take provisional measures, for non- economic environmental reasons, subject to a Community inspection procedure. 3. In preparing its policy on the environment, the Community shall take account of: - available scientific and technical data; - environmental conditions in the various regions of the Community; - the potential benefits and costs of action or lack of action; - the economic and social development of the Community as a whole and the balanced development of its regions. 4. Within their respective spheres of competence, the Community and the Member States shall co-operate with third countries and with the competent international organizations. The arrangements for Community co-operation may be the subject of agreements between the Community and the third parties concerned, which shall be negotiated and concluded in accordance with Article 228. The previous subparagraph shall be without prejudice to Member States' competence to negotiate in international bodies and to conclude international agreements. ARTICLE 130s 1. The Council, acting in accordance with the procedure referred to in Article 189c and after consulting the Economic and Social Committee, shall decide what action is to be taken by the Community in order to achieve the objective referred to in Article 130r. 2. By way of derogation from the decision-making procedure provided for in paragraph 1 and without prejudice to Article 100a, the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt: - provisions primarily of a fiscal nature; - measures concerning town and country planning, land use with the exception of waste management and measures of a general nature, and management of water resources; - measures significantly affecting a Member State's choice between different energy sources and the general structure of its energy supply. The Council may, under the conditions laid down in the preceding subparagraph,define those matters referred to in this paragraph on which decisions are to be taken by a qualified majority. 3. In other areas, general action programmes setting out priority objectives to be attained shall be adopted by the Council, acting in accordance with the procedure referred to in Article 189b and after consulting the Economic and Social Committee. The Council, acting under the terms of paragraph 1 or paragraph 2 according to the case, shall adopt the measures necessary for the implementation of these programmes. 4. Without prejudice to certain measures of a Community nature, the Member States shall finance and implement the environment policy. 5. Without prejudice to the principle that the polluter should pay, if a measure based on the provisions of paragraph 1 involves costs deemed disproportionate for the public authorities of a Member State, the Council shall, in the act adopting that measure, lay down appropriate provisions in the form of: - temporary derogations and/or - financial support from the Cohesion Fund to be set up no later than 31 December 1993 pursuant to Article 130d. ARTICLE 130t The protective measures adopted pursuant to Article 130s shall not prevent any Member State from maintaining or introducing more stringent protective measures. Such measures must be compatible with this Treaty. They shall be notified to the Commission. TITLE XVII Development co-operation ARTICLE 130u 1. Community policy in the sphere of development co-operation, which shall be complementary to the policies pursued by the Member States, shall foster: - the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them; - the smooth and gradual integration of the developing countries into the world economy; - the campaign against poverty in the developing countries. 2. Community policy in this area shall contribute to the general objective of developing and consolidating democracy and the rule of law, and to that of respecting human rights and fundamental freedoms. 3. The Community and the Member State shall comply with the commitments and take account of the objectives they have approved in the context of the United Nations and other competent international organizations. ARTICLE 130v The Community shall take account of the objectives referred to in Article 130u in the policies that it implements which are likely to affect developing countries. ARTICLE 130w 1.. Without prejudice to the other provisions in this Treaty the Council, acting in accordance with the procedure referred to in Article 189c, shall adopt the measures necessary to further the objectives referred to in Article 130u. Such measures may take the form of multiannual programmes. 2. The European Investment Bank shall contribute, under the terms laid down in its Statute, to the implementation of the measures referred to in paragraph 1. 3. The provisions of this Article shall not affect co-operation with the African, Caribbean and Pacific countries in the framework of the ACP- EEC Convention. ARTICLE 130x 1. The Community and the Member States shall co-ordinate their policies on development co-operation and shall consult each other on their aid programmes, including in international organizations and during international conferences. They may undertake joint action. Member States shall contribute if necessary to the implementation of Community aid programmes. 2. The Commission may take any useful initiative to promote the co- ordination referred to in paragraph 1. ARTICLE 130y Within their respective spheres of competence, the Community and the Member States shall co-operate with third countries and with the competent international organizations. The arrangements for Community co-operation may be the subject of arrangements between the Community and the third parties concerned, which shall be negotiated and concluded in accordance with Article 228. The previous paragraph shall be without prejudice to Members States' competence to negotiate in international bodies and to conclude international agreements." E. In Part Five "Institutions of the Community" 39) Article 137 shall be replaced by the following: "ARTICLE 137 The European Parliament, which shall consist of representatives of the peoples of the States brought together in the Community, shall exercise the powers conferred upon it by this Treaty." 40) Paragraph 3 of Article 138 shall be replaced by the following: "3. The European Parliament shall draw up proposals for elections by direct universal suffrage in accordance in accordance with a uniform procedure in all Member States. The Council shall, acting unanimously after obtaining the assent of the European Parliament, which shall act by a majority of its component members, lay down the appropriate provision, which it shall recommend to Member States for adoption in accordance with their respective constitutional requirements." 41) The following Article shall be inserted: "ARTICLE 138a Political parties at European level are important as a factor for integration within the Union. They contribute to forming a European awareness and to expressing the political will of the citizens of the Union. ARTICLE 138b In so far as provided in this Treaty, the European Parliament shall participate in the process leading up to the adoption of Community acts by exercising its powers under the procedures laid down in Articles 189b and 189c and by giving its assent or delivering advisory opinions. The European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal on matters on which it considers that a Community act is required for the purpose of implementing this Treaty. ARTICLE 138c In the course of its duties, the European Parliament may, at the request of a quarter of its members, set up a temporary Committee of Inquiry to investigate, without prejudice to the powers conferred by this Treaty on other institutions or bodies, alleged contraventions or maladministration in the implementation of Community law, except where the alleged facts are being examined before a court and while the case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on the submission of its report. The detailed provisions governing the exercise of the right of inquiry shall be determined by common accord of the European Parliament, the Council and the Commission. ARTICLE 138d Any citizen of the Union, and any natural or legal person residing or having his registered office in a Member State, shall have the right to address, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes within the Community's fields of activity and which affects him, her or it directly. ARTICLE 138e 1. The European Parliament shall appoint an Ombudsman empowered to receive complaints from any citizen of the Union or any natural or legal person residing or having its registered office in a Member State concerning instances of maladministration in the activities of the Community institutions or bodies, with the exception of the Court of Justice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct inquiries for which he finds grounds, either on his own initiative or on the basis of complaints submitted to him direct or through a member of the European Parliament, except where the alleged facts are or have been the subject of legal proceedings. Where the Ombudsman establishes an instance of maladministration, he shall refer the matter to the institution concerned, which shall have a period of three months in which to inform him of its views. The Ombudsman shall then forward a report to the European Parliament and the institution concerned. The person lodging the complaint shall be informed of the outcome of such inquiries. The Ombudsman shall submit an annual report to the European Parliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of the European Parliament for the duration of its term of office. The Ombudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at the request at the request of the European Parliament if he no longer fulfils the conditions required for the performance of this duties or if he is guilty of serious misconduct. 3. The Ombudsman shall be completely independent in the performance of his duties. In the performance of those duties he shall seek nor take instructions from any body. The Ombudsman may not, during his term of office, engage in any other occupation, whether gainful or not. 4. The European Parliament shall, after seeking an opinion from the Commission and with the approval of the Council acting by a qualified majority, lay down the regulations and general conditions governing the Ombudsman's duties." 42) The second subparagraph of Article 144 shall be supplemented by the following sentence: "In this case, the term of office of the members of the Commission appointed to replace them shall expire on the date which the term of office of the members of the Commission obliged to resign as a body would have expired." 43) The following Article shall be inserted: "ARTICLE 146 The Council shall consist of a representative of each Member State at ministerial level, authorized to commit the government of that Member State. The office of President shall be held in turn by each Member State in the Council for a term of six months, in the following order of Member States: - for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom; - for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. 44) The following Article shall be inserted: "ARTICLE 147 The Council shall meet when convened by its President on his initiative or at the request of one of its members or of the Commission." 45) Article 149 shall be repealed. 46) The following Article shall be inserted: "ARTICLE 151 1. A committee consisting of the Permanent Representatives of the Member States shall be responsible for preparing the work of the Council and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under the direction of a Secretary-General. The Secretary-General shall be appointed by the Council acting unanimously. The Council shall decide on the organization of the General Secretariat. 3. The Council shall adopt its rules of procedure." 47) The following Article shall be inserted: "ARTICLE 154 The Council shall, acting by a qualified majority, determine the salaries, allowances and pensions of the President and members of the Commission, and of the president, Judges, Advocates-General and Registrar of the Court of Justice. It shall also, again by a qualified majority, determine any payment to be made instead of remuneration." 48) The following Articles shall be inserted: "ARTICLE 156 The Commission shall publish annually, not later than one month before the opening of the session of the European Parliament, a general report on the activities of the Community. ARTICLE 157 1. The Commission shall consist of seventeen members, who shall be chosen on the grounds of their general competence and whose independence is beyond doubt. The number of members of the Commission may be altered by the Council, acting unanimously. Only nationals of Member States may be members of the Commission. The Commission must include at least one national of each of the Member States, but may not include more than two members having the nationality of the same State. 2. The members of the Commission shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. Each Member State undertakes to respect this principle and not to seek to influence the members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. In the events of any breach of these obligations, the Court of Justice may, on application by the Council or the Commission, rule that the member concerned be, according to the circumstances, either compulsorily retired in accordance with Article 160 or deprived of his rights to a pension or benefits in its stead. ARTICLE 158 1. The members of the Commission shall be appointed, in accordance with the procedure referred to in paragraph 2, for a period of five years, subject, if need be, to Article 144. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by common accord, after consulting the European Parliament, the person they intend to appoint as President of the Commission. The governments of the Member States shall, in consultation with the nominee for President, nominate the other persons whom they intend to appoint as members of the Commission. The President and the other members of the Commission thus nominated shall be subject as a body to a vote of approval by the European Parliament. After approval by the European parliament, the President and the other members of the Commission shall be appointed by common accord of the governments of the Member States. 3. Paragraphs 1 and 2 shall be applied for the first time to the President and the other members of the Commission whose term of office begins on 7 January 1995. The president and the other members of the Commission whose term of office begins on 7 January 1993 shall be appointed by common accord of the governments of the Member States. Their term of office shall expire on 6 January 1995. ARTICLE 159 Apart from normal replacement, or death, the duties of a member of the Commission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of the member's term of office by a new member appointed by common accord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, the President shall be replaced for the remainder of his term of office. The procedure laid down in Article 158(2) shall be applicable for the replacement of the President. Save in the case of compulsory retirement under Article 160, members of the Commission shall remain in office until they have been replaced. ARTICLE 160 If any member of the Commission no longer fulfills the conditions required for the performance of his duties or if he has been guilty of serious misconduct, the Court of Justice may, on application by the Council or the Commission, compulsorily retire him. ARTICLE 161 The Commission may appoint a Vice-President or two Vice-Presidents from among its members. ARTICLE 162 1. The Council and the Commission shall consult each other and shall settle by common accord their methods of co-operation. 2. The Commission shall adopt its rules of procedure so as to ensure that both it and its departments operate in accordance with the provisions of this Treaty. It shall ensure that these rules are published. ARTICLE 163 The Commission shall act by a majority of the number of members provided for in Article 157. A meeting of the Commission shall be valid only if the number of members laid down in its rules of procedure is present." 49) Article 165 shall be replaced by the following: "ARTICLE 165 The Court of Justice shall consist of thirteen judges. The Court of Justice shall sit in plenary session. It may, however, form chambers each consisting of three of five judges, either to undertake certain preparatory inquiries or to adjudicate on particular categories of cases in accordance with rules laid down for these purposes. The Court of Justice shall sit in plenary session when a Member State or a Community institution that is a party to the proceedings so requests. Should the Court of Justice so request, the Council may, acting unanimously, increase the number of judges and make necessary adjustments to the second and third paragraphs of this Article and to the second of Article 167." 50) Article 168a shall be replaced by the following: "ARTICLE 168a 1. The Court of First Instance shall be attached to the Court of Justice with jurisdiction to hear and determine at first instance, subject to a right of appeal to the Court of Justice on points of law only and in accordance with the conditions laid down by Statute, certain classes of action or proceeding defined in accordance with the conditions laid down in paragraph 2. The Court of First Instance shall not be competent to hear and determine questions referred for a preliminary ruling under Article 177. 2. At the request of the Court of Justice and after consulting the European Parliament and the Commission, the Council, acting unanimously, shall determine the classes of action or proceeding referred to in paragraph 1 and the composition of the Court of First Instance and shall adopt the necessary adjustments and additional provisions to the Statute of the the Court of Justice. Unless the Council decides otherwise, the provisions of this Treaty relating to the Court of Justice, in particular the provisions of the Protocol on the Statute of the Court of Justice, shall apply to the Court of First Instance. 3. The members of the Court of First Instance shall be chosen from persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office; they shall be appointed by common accord of the governments of the Member States for a term of six years. The membership shall be partially renewed every three years. Retiring members shall be eligible for re- appointment. 4. The Court of First Instance shall establish its rules of procedure in agreement with the Court of Justice. Those rules shall require the unanimous approval of the Council." 51) Article 171 shall be replaced by the following: "ARTICLE 171 1. If the Court of Justice finds that a Member State has failed to fulfil an obligation under this Treaty, the State shall be required to take the necessary measures to comply with the judgment of the Court of Justice. 2. If the Commission considers that the Member State concerned has not taken such measures it shall, after giving that State the opportunity to submit its observations, issue a reasoned opinion specifying the points on which the Member State concerned has not complied with the judgment of the Court of Justice. If the Member State concerned fails to take the necessary measures to comply with the Court's judgment within the time-limit laid down by the Commission, the latter may bring the case before the Court of Justice. In so doing it shall specify the amount of lump sum or penalty payment to be paid by the Member State concerned which it considers appropriate in the circumstances. If the Court of Justice finds that the Member State concerned has not complied with its judgment it may impose a lump sum or penalty payment on it. This procedure shall be without prejudice to Article 170." 52) Article 172 shall be replaced by the following: "ARTICLE 172 Regulations adopted jointly by the European Parliament and the Council, and by the Council, pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction with regard to the penalties provided for in such regulations." 53) Article 173 shall be replaced by the following: "ARTICLE 173 The Court of Justice shall review the legality of acts adopted jointly by the European Parliament and the Council, of acts of the Council, of the Commission and of the ECB, other than recommendations and opinions, and of acts of the European Parliament intended to produce legal effects vis-a-vis third parties. It shall for this purpose have jurisdiction in actions brought by a Member State, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers. The Court shall have jurisdiction under the same conditions, in actions brought by the European Parliament and by the ECB for the purpose of protecting their prerogatives. Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. The proceedings provided for in this Article shall be instituted within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be." 54) Article 175 shall be replaced by the following: "ARTICLE 175 Should the European Parliament, the Council or the Commission, in infringement of this Treaty, fail to act, The Member States and the other institutions of the Community may bring an action before the Court of Justice to have the infringement established. The action shall be admissible only if the institution concerned has first been called upon to act. If, within two months of being so called upon, the institution concerned has not defined its position, the action may be brought within a further period of two months. Any natural or legal person may, under the conditions laid down in the preceding paragraphs, complain to the Court of Justice that an institution of the Community has failed to address to that person any act other than a recommendation or an opinion. The Court of Justice shall have jurisdiction, under the same conditions, in actions or proceedings brought by the ECB in the areas falling within the latter's field of competence and in actions or proceedings brought against the latter." 55) Article 176 shall be replaced by the following: "ARTICLE 176 The institution or institutions whose act has been declared void or whose failure to act has been declared contrary to this Treaty shall be required to take the necessary measures to comply with the judgment of the Court of Justice. This obligation shall not affect any obligation which may result from the application of the second paragraph of Article 215. This Article shall also apply to the ECB." 56) Article 177 shall be replaced by the following: "ARTICLE 177 The Court of Justice shall have jurisdiction to give preliminary rulings concerning: (a) the interpretation of the Treaty; (b) the validity and interpretation of acts of the institutions of the Community and of the ECB; (c) the interpretation of the statutes of bodies established by an act of the Council, where those statutes so provide. Where such a question is raised before any court or tribunal of a Member State, that Court of tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon. Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, the court or tribunal shall bring the matter before the Court of Justice." 57) Article 180 shall be replaced by the following: "ARTICLE 180 The Court of Justice shall, within the limits hereinafter laid down, have jurisdiction in disputes concerning: (a) the fulfillment by Member States of obligations under the Statute of the European Investment Bank. In this connection, the Board of Directors of the Bank shall enjoy the powers conferred upon the Commission by Article 169; (b) measures adopted by the Board of Governors of the European Investment Bank. In this connection, any Member State, the Commission of the Board of Directors of the Bank may institute proceedings under the conditions laid down in Article 173; (c) measures adopted by the Board of Directors of the European Investment Bank. Proceedings against such measures may be instituted only by Member States or by the Commission, under the conditions laid down in Article 173, and solely on the grounds of non- compliance with the procedure provided for in Article 21(2), (5), (6) and (7) of the Statute of the Bank; (d) the fulfillment by the national central banks of obligations under this Treaty and the Statute of the ESCB. In this connection the powers of the Council of the ECB in respect of national central banks shall be the same as those conferred upon the commission in respect of Member States by Article 169. If the Court of Justice finds that a national central bank has failed to fulfill an obligation under this Treaty, that bank shall be required to take the necessary measures to comply with the judgment of the Court of Justice." 58) Article 184 shall be replaced by the following: "ARTICLE 184 Notwithstanding the expiry of the period laid down in the fifth paragraph of Article 173, any party may, in proceedings in which a regulation adopted jointly by the European Parliament and the Council, or a regulation of the Council, of the Commission, or of the ECB is at issue, plead the grounds specified in the second paragraph of Article 173 in order to invoke before the Court of Justice the inapplicability of that regulation." 59) The following section shall be inserted: "SECTION 5 THE COURT OF AUDITORS ARTICLE 188a The Court of Auditors shall carry out the audit. ARTICLE 188b 1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from among persons who belong or have belonged in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a term of six years by the Council, acting unanimously after consulting the European Parliament. However, when the first appointments are made, four members of the Court of Auditors, chosen by lot, shall be appointed for a term of office of four years only. The members of the Court of Auditors shall be eligible for reappointment. They shall elect the President of the Court of Auditors from among their number for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member of the Court of Auditors shall end when he resigns, or is compulsorily retired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of the member's term of office. Save in the case of compulsory retirement, members of the Court of Auditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or of his right to a pension or other benefits in its stead only if the Court of Justice, at the request of the Court of Auditors, finds that he no longer fulfills the requisite conditions or meets the obligations arising from his office. 8. The Council, acting by a qualified majority, shall determine the conditions of employment of the President and the members of the Court of Auditors and in particular their salaries, allowances and pensions. It shall also, by the same majority, determine any payment to be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities of the European Communities applicable to the Judges of the Court of Justice shall also apply to the members of the Court of Auditors. ARTICLE 188c 1. The Court of Auditors shall examine the accounts of all revenue and expenditure of the Community. It shall also examine the accounts of all revenue and expenditure of all bodies set up by the Community in so far as the relevant constituent instrument does not preclude such examination. The Court of Auditors shall provide the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. 2.The Court of Auditors shall examine whether all revenue has been received and all expenditure incurred in a lawful and regular manner and whether the financial arrangement has been sound. The audit of revenue shall be carried out on the basis both of the amounts established as due and the amounts actually paid to the Community. The audit of expenditure shall be carried out on the basis both of commitments undertaken and payments made. These audits may be carried out before the closure of accounts for the financial year in question. 3. The audit shall be based on records and, if necessary, performed on the spot in other institutions of the Community and in the Member States. In the Member States the audit shall be carried out in liaison with the national audit bodies or, if these do not have the necessary powers, with the competent national departments. These bodies or departments shall inform the Court of Auditors whether they intend to take part in the audit. The other institutions of the Community and the national audit bodies or, if these do not have the necessary powers, the competent national departments, shall forward to the Court of Auditors, at its request, any document or information necessary to carry out its task. 4. The Court of Auditors shall draw up an annual report after the close of each financial year. It shall be forwarded to the other institutions of the Community and shall be published, together with the replies of these institutions to the observations of the Court of Auditors, in the Official Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions and deliver opinions at the request of one of the other institutions of the Community. It shall adopt its annual reports, special reports or opinions by a majority of its members. It shall assist the European Parliament and the Council in exercising their powers of control over the implementation of the budget." 60) Article 189 shall be replace by the following: "ARTICLE 189 In order to carry out their task and in accordance with the provisions of the Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decision, make recommendations or deliver opinions. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States. A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods. A decision shall be binding in its entirety upon those to whom it is addressed. Recommendations and opinions shall have no binding force." 61) The following Articles shall be inserted: "ARTICLE 189a 1. Where, in pursuance of the Treaty, the Council acts on a proposal from the Commission, unanimity shall be required for an act constituting an amendment to that proposal, subject to Article 189b(4) and (5). 2. As long as the Council has not acted, the Commission may alter its proposal at any time during the procedures leading to the adoption of a Community act. ARTICLE 189b 1. Where reference is made in the Treaty to this Article for the adoption of an act, the following procedures shall apply. 2. The Commission shall submit a proposal to the European Parliament and the Council. The Council, acting by a qualified majority after obtaining the opinion of the European Parliament, shall adopt a common position. The common position shall be communicated to the European Parliament. The Council shall inform the European Parliament fully of the reasons which led it to adopt its common position. The Commission shall inform the European Parliament fully of its position. If, within three months of such communication, the European Parliament: (a) approves the common position, the Council shall definitively adopt the act in question in accordance with that common position; (b) has not taken a decision, the Council shall adopt the act in question in accordance with its common position; (c) indicates, by an absolute majority of its component members, that it intends to reject the common position, it shall immediately inform the Council. The Council may convene a meeting of the Conciliation Committee referred to in paragraph 4 to explain further its position. The European parliament shall thereafter either confirm, by an absolute majority of its component members, its rejection of the common position, in which event the proposed act shall be deemed not to have been adopted, or propose amendments in accordance with subparagraph (d) of this paragraph; (d) proposes amendments to the common position by an absolute majority of its component members, the amended text shall be forwarded to the Council and to the Commission which shall deliver an opinion on those amendments. 3. If, within three months of the matter being referred to it, the Council action by a qualified majority, approves all the amendments of the European parliament, it shall amend its common position accordingly and adopt the act in question; however, the Council shall act unanimously on the amendments on which the Commission has delivered a negative opinion. If the Council does not approve the act in question, the President of the Council, in agreement with the President of the European Parliament, shall forthwith convene a meeting of the Conciliation Committee. 4. The Conciliation Committee, which shall be composed of the members of the Council or their representatives and an equal number of representative of the European Parliament, shall have the task of reaching agreement on a joint text, by a qualified majority of the members of the Council or their representatives and by a majority of the representatives of the European Parliament. The Commission shall take part in the Conciliation Committee's proceedings and shall take all the necessary initiatives with a view to reconciling the positions of the European Parliament and the Council. 5. If within six weeks of its being convened, the Conciliation Committee approves a joint text, the European Parliament, acting by an absolute majority of the votes cast, and the Council, acting by a qualified majority, shall have a period of six weeks from that approval in which to adopt the act in question in accordance with the joint text. If one of the two institutions fails to approve the proposed act, it shall be deemed not to have been adopted. 6. Where the Conciliation Committee does not approve a joint text, the proposed act shall be deemed not to have been adopted unless the Council, acting by a qualified majority within six weeks of expiry of the period granted to the Conciliation Committee, confirms the common position to which it agreed before the conciliation procedure was initiated, possibly with the amendments proposed by the European Parliament. In this case, the act in question shall be finally adopted unless the European parliament, within six weeks of the date of confirmation by the Council, rejects the text by an absolute majority of its component members, in which case the proposed act shall be deemed not to have been adopted. 7. The periods of three months and six weeks referred to in this Article may be extended by a maximum of one month and two weeks respectively by common accord of the European Parliament and the Council. The period of three months referred to in paragraph 2 shall be automatically extended by two months where paragraph 2(c) applies. 8. The scope of the procedure under this Article may be widened, in accordance with the procedure provided for in Article N(2) of the Treaty on European Union, on the basis of a report to be submitted to the Council by the Commission by 1996 at the latest. ARTICLE 189c Where reference is made in this Treaty to this Article for the adoption of an act, the following procedure shall apply: (a) The Council, acting by a qualified majority on a proposal from the Commission and after obtaining the opinion of the European Parliament, shall adopt a common position. (b) The Council's common position shall be communicated to the European Parliament. The Council and the Commission shall inform the European Parliament fully of the reasons which led the Council to adopt its common position and also of the Commission's position. If, within three months of such communication, the European Parliament approves this common position or has not taken a decision within that period, the Council shall definitively adopt the act in question in accordance with the common position. (c) The European Parliament may, within the period of three months referred to in point (b), by an absolute majority of its component members, propose amendments to the Council's common position. The European Parliament may also, by the same majority, reject the Council's common position. The result of the proceedings shall be transmitted to the Council and the Commission. If the European Parliament has rejected the Council's common position, unanimity shall be required for the Council to act on a second reading. (d) The Commission shall, within a period of one month, re-examine the proposal on the basis of which the Council adopted its common position, by taking into account the amendments proposed by the European Parliament. The Commission shall forward to the Council, at the same time as its re-examined proposal, the amendments of the European Parliament which it has not accepted, and shall express its opinion on them. The Council may adopt these amendments unanimously. (e) The Council, acting by a qualified majority, shall adopt the proposal as re-examined by the Commission. Unanimity shall be required for the Council to amend the proposal as re-examined by the Commission. (f) In the cases referred to in points (c),(d) and (e), the Council shall be required to act within a period of three months. If no decision is taken within this period, the commission proposal shall be deemed not to have been adopted. (g) The periods referred to in points (b) and (f) may be extended by a maximum of one month by common accord between the Council and the European Parliament." 62) Article 190 shall be replaced by the following: "ARTICLE 190 Regulations, directives and decisions adopted jointly by the European Parliament and the Council, and such acts adopted by the Council or the Commission, shall state the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained pursuant to this Treaty." 63) Article 191 shall be replaced by the following: "ARTICLE 191 1. Regulations, directives and decisions adopted in accordance with the procedures referred to in Article 189b shall be signed by the President of the European Parliament and by the President of the Council and published in the Official Journal of the Community. They shall enter into force on the date specified in them or, in the absence thereof, on the twentieth day following that of their publication. 2. Regulations of the Council and of the Commission, as well as directives of those institutions which are address to all Member States, shall be published in the Official Journal of the Community. They shall enter into force on the date specified in them or, in the absence thereof, on the twentieth day following that of their publication. 3. Other directives, and decisions, shall be notified to those whom they are address and shall take effect upon such notification." 64) Article 194 shall be replaced by the following: "ARTICLE 194 The number of members of the Economic and Social Committee shall be as follows: Belgium 12 Denmark 9 Germany 24 Greece 12 Spain 21 France 24 Ireland 9 Italy 24 Luxembourg 6 Netherlands 12 Portugal 12 United Kingdom 24 The members of the Committee shall be appointed by the Council, acting unanimously, for four years. Their appointments shall be renewable. The members of the Committee may not be bound by any mandatory instructions. They shall be completely independent in the performance of their duties, in the general interest of the Community. The Council, acting by a qualified majority, shall determine the allowances of members of the Committee." 65) Article 196 shall be replaced by the following: "ARTICLE 196 The Committee shall elect its chairman and officers from among its members for a term of two years. It shall adopt its rules of procedure. The Committee shall be convened by its chairman at the request of the Council or of the Commission. It may also meet on its own initiative." 66) Article 198 shall be replaced by the following: "ARTICLE 198 The Committee must be consulted by the Council of the Commission where this Treaty so provides. The Committee may be consulted by these institutions in all cases in which they consider it appropriate. It may issue an opinion on its own initiative in cases in which it considers such action appropriate. The Council or the Commission shall, if it considers it necessary, set the Committee, for the submission of its opinion, a time limit which may not be less than one month from the date on which the chairman receives notification to this effect. Upon expiry of the time limit, the absence of an opinion shall not prevent further action. The opinion of the Committee and that of the specialized section, together with a record of the proceedings, shall be forwarded to the Council and to the Commission. 67) The following Chapter shall be inserted:

"CHAPTER 4 THE COMMITTEE OF THE REGIONS ARTICLE 198a A Committee consisting of representatives of regional and local bodies, hereinafter referred to as "the Committee of the Regions", is hereby established with advisory status. The number of members of the Committee of the Regions shall be as follows: Belgium 12 Denmark 9 Germany 24 Greece 12 Spain 21 France 24 Ireland 9 Italy 24 Luxembourg 6 Netherlands 12 Portugal 12 United Kingdom 24 The members of the Committee and an equal number of alternate members shall be appointed for four years by the Council acting unanimously on proposals from the respective Member States. Their term of office shall be renewable. The members of the Committee may not be bound by any mandatory instructions. They shall be completely independent in the performance of their duties, in the general interest of the Community. ARTICLE 198b The Committee of the Regions shall elect its chairman and officers from among its members for a term of two years. It shall adopt its rules of procedure and shall submit them for approval to the Council, acting unanimously. The Committee shall be convened by its chairman at the request of the Council or of the Commission. It may also meet on its own initiative. ARTICLE 198c The Committee of the Regions shall be consulted by the Council or by the Commission where this Treaty so provides and in all other cases in which one of these two institutions considers it appropriate. The Council of the Commission shall, if it considers it necessary, set the Committee, for the submission of its opinion, a time-limit which may not be less than one month from the date on which the chairman receives notification to this effect. Upon expiry of the time-limit the absence of an opinion shall not prevent further action. Where the Economic and Social Committee is consulted pursuant to Article 198, the Committee of the Regions shall be informed by the Council of the Commission of the request for an opinion. Where it considers that specific regional interests are involved, the Committee of the Regions may issue an opinion on the matter. It may issue an opinion on its own initiative in cases in which it considers such action appropriate. The opinion of the Committee, together with a record of the proceedings, shall be forwarded to the Council and to the Commission." 68) The following chapter shall be inserted:

"CHAPTER 5 EUROPEAN INVESTMENT BANK ARTICLE 198d The European Investment Bank shall have legal personality. The members of the European Investment Bank shall be the Member States. The Statute of the European Investment Bank is laid down in a Protocol annexed to this Treaty. ARTICLE 198e The task of the European Investment Bank shall be to contribute, by having recourse to the capital market and utilizing its own resources, to the balanced and steady development of the common market in the interest of the Community. For this purpose the Bank shall, operating on a non-profit-making basis, grant loans and give guarantees which facilitate the financing of the following projects in all sectors of the economy: (a) projects for developing less-developed regions; (b) projects for modernizing or converting undertakings or for developing fresh activities called for by the progressive establishment of the common market, where these projects are of such a size or nature that they cannot be entirely financed by the various means available in the individual Member States; (c) projects of common interest to several Member States which are of such a size or nature that they cannot be entirely financed by the various means available in the individual Member States. In carrying out its task, the Bank shall facilitate the financing of investment programmes in conjunction with assistance from the structural Funds and other Community Financial instruments." 69) Article 199 shall be replaced by the following: "ARTICLE 199 All items of revenue and expenditure of the Community, including those relating to the European Social Fund, shall be included in estimates to be drawn up for each financial year and shall be shown in the budget. Administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to common foreign and security policy and to co-operation in the fields of justice and home affairs shall be charged to the budget. The operational expenditure occasioned by the implementation of the said provisions may, under the conditions referred to therein, be charged to the budget. The revenue and expenditure shown in the budget shall be in balance." 70) Article 200 shall be repealed. 71) Article 201 shall be replaced by the following: "ARTICLE 201 Without prejudice to other revenue, the budget shall be financed wholly from own resources. The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, shall lay down provisions relating to the system of own resources of the Community, which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements." 72) The following Article shall be inserted: "ARTICLE 201a With a view to maintaining budgetary discipline, the Commission shall not make any proposal for a Community act, or alter its proposals, or adopt any implementing measure which is likely to have appreciable implications for the budget without providing the assurance that the proposal or that measure is capable of being financed within the limit of the Community's own resources arising under provisions laid down by the Council pursuant to Article 201." 73) Article 205 shall be replaced by the following; "ARTICLE 205 The Commission shall implement the budget, in accordance with the provisions of the regulations made pursuant to Article 209, on its own responsibility and within the limits of the appropriations, having regard tot he principles of sound financial management. The regulations shall lay down detailed rules for each institution concerning its part in effecting its own expenditure. Within the budget, the Commission may, subject to the limits and conditions laid down in the regulations made pursuant to Article 209, transfer appropriations from one chapter to another or from one subdivision to another." 74) Article 206 shall be replaced by the following: "ARTICLE 206 1. The European Parliament, acting on a recommendation from the Council which shall act by qualified majority, shall give a discharge to the Commission in respect of the implementation of the budget. To this end, the Council and the European Parliament in turn shall examine the accounts and the financial statement referred to in Article 205a, the annual report by the Court of Auditors together with the replies of the institutions under audit to the observations of the Court of Auditors and any relevant special reports by the Court of Auditors. 2 Before giving a discharge to the Commission, or for any other purpose in connection with the exercise of its power over the implementation of the budget, the European Parliament may ask to hear the Commission give evidence with regard to the execution of expenditure or the operation of financial control systems. The Commissions shall submit any necessary information to the European Parliament at the latter's request. 3. The Commission shall take all appropriate steps to act on the observations in the decisions giving discharge and on other observations by the European Parliament relating to the execution of expenditure, as well as on comments accompanying the recommendations on discharge adopted by the Council. At the request of the European Parliament or the Council, the Commission shall report on the measures taken in the light of these observations and comments and in particular on the instructions given to the departments which are responsible for the implementation of the budget. These reports shall also be forwarded to the Court of Auditors." 75) Articles 206a and 206b shall be repealed. 76) Article 209 shall be replaced by the following: "ARTICLE 209 The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall: (a) make Financial Regulations specifying in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts; (b) determine the methods and procedure whereby the budget revenue provided under the arrangements relating to the Community's own resources shall be made available to the Commission, and determine the measures to be applied, if need be, to meet cash requirements; (c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerning appropriate arrangements for inspection." 77) The following article shall be inserted: "ARTICLE 209a Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests. Without prejudice to the other provisions of the Treaty, Member States shall co-ordinate their action aimed at protecting the financial interests of the Community against fraud. To this end they shall organize, with the help of the Commission, close and regular co-operation between the competent departments of their administrations." 78) Article 215 shall be replaced by the following: "ARTICLE 215 The contractual liability of the Community shall be governed by the law applicable to the contract in question. In the case of non-contractual liability, the Community shall, in accordance with the general principles common to the law of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties. The preceding paragraph shall apply under the same conditions to damage caused by the ECB or by its servants in the performance of their duties. The personal liability of its servants towards the Community shall be governed by the provisions laid down in their Staff Regulations or in the Conditions of Employment applicable to them." 79) Article 227 shall be amended as follows: (a) paragraph 2 shall be replaced by the following: "2. With regard to the French overseas departments, the general and particular provisions of this Treaty relating to: - the free movement of goods; - agriculture, save for Article 40 (4); - the liberalization of services - the rules on competition; - the protective measures provided for in Articles 109h, 109i and 226; - the institutions, shall apply as soon as this Treaty enters into force. The conditions under which the other provisions of this Treaty are to apply shall be determined, within two years of entry into force of this Treaty, by decisions of the Council, acting unanimously on a proposal from the Commission. The institutions of the Community will, within the framework of the procedures provided for in this Treaty, in particular Article 226, take care that the economic and social developments of these areas is made possible." (b) in paragraph 5, subparagraph (a) shall be replaced by the following: "(a) this Treaty shall not apply to the Faroe Islands." 80) Article 228 shall be replaced by the following: "ARTICLE 228 1. Where this Treaty provides for the conclusion of agreements between the Community and one or more States or international organizations, the Commission shall make recommendations to the Council, which shall authorize the Commission to open the necessary negotiations. The Commission shall conduct these negotiations in consultation with special committees appointed by the Council to assist it in this task and within the framework of such directives as the Council may issue to it. In exercising the powers conferred upon it by this paragraph, the Council shall act by a qualified majority, except in the cases provided for in the second sentence of paragraph 2, for which it shall act unanimously. 2. Subject to the powers vested in the Commission in this field, the agreements shall be concluded by the Council, acting by a qualified majority on a proposal from the Commission. The Council shall act unanimously when the agreement covers a field for which unanimity is required for the adoption of internal rules, and for the agreements referred to in Article 238. 3. The Council shall conclude agreements after consulting the European Parliament, except for the agreements referred to in Article 113(3), including cases where the agreement covers a field for which the procedure referred to in Article 189b or that referred to in Article 189c is required for the adoption of internal rules. The European Parliament shall deliver its opinion within a time limit which the Council may lay down according to the urgency of the matter. In the absence of an opinion within that time limit, the Council may act. By way of derogation from the previous subparagraph, agreements referred to in Article 238, other agreements establishing a specific institutional framework by organizing co-operation procedures, agreements having important budgetary implications for the Community and agreements entailing amendment of an act adopted under the procedure referred to in Article 189b shall be concluded after the assent of the European Parliament has been obtained. The Council and the European Parliament may, in an urgent situation, agree upon a time limit for the assent. 4. When concluding an agreement , the Council may, by way of derogation from paragraph 2, authorize the Commission to approve modifications on behalf of the Community where the agreement provides for them to be adopted by a simplified procedure or by a body set up by the agreement; it may attach specific conditions to such authorization. 5. When the Council envisages concluding an agreement which calls for amendments to this Treaty, the amendments must first be adopted in accordance with the procedure laid down in Article N of the Treaty on European Union. 6. The Council, the Commission or a Member State may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the provisions of this Treaty. Where the opinion of the Court of Justice is adverse, the agreement may enter into force only in accordance with Article N of the Treaty on European Union. 7. Agreements concluded under the conditions set out in this Article shall be binding on the institutions of the Community and on Member States." 81) The following Article shall be inserted: "ARTICLE 228a Where it is provided, in a common position or in a joint action adopted according to the provisions of the Treaty on European Union relating to the common foreign and security policy, for an action by the Community to interrupt or to reduce, in part or completely, economic relations with one or more third countries, the Council shall take the necessary urgent measures. The Council shall act by a qualified majority on a proposal from the Commission." 82) Article 231 shall be replaced by the following: "ARTICLE 231 The Community shall establish close co-operation with the Organization for Economic Cooperation and Development, the details of which shall be determined by common accord." 83) Article 236 and 237 shall be repealed. 84) Article 328 shall be replaced by the following: "ARTICLE 238 The Community may conclude with one or more states or international organizations agreements establishing an association involving reciprocal rights and obligations, common action and special procedures." F. In Annex III: 85) The title shall be replaced by the following: "List of invisible transactions referred to in Article 73h of this Treaty". G. In the Protocol on the Statue of the European Investment Bank: 86) The reference to Articles 129 and 130 shall be replaced by a reference to Articles 198b and 198e.

TITLE3 PROVISIONS AMENDING THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY

ARTICLE H The Treaty establishing the European Coal and Steel Community shall be amended in accordance with the provisions of this Article. 1) Article 7 shall be replaced by the following: "ARTICLE 7 The institutions of the Community shall be: - a HIGH AUTHORITY (hereinafter referred to as "the Commission"); - a COMMON ASSEMBLY (hereinafter referred to as "the European Parliament"); - a SPECIAL COUNCIL OF MINISTERS (hereinafter referred to as "the Council"); - a COURT OF JUSTICE; - a COURT OF AUDITORS. The Commission shall be assisted by a Consultative Committee." 2) The following Articles shall be inserted: "ARTICLE 9 1. The Commission shall consist of seventeen members, who shall be chosen on the grounds of their general competence and whose independence is beyond doubt. The number of members of the Commission may be altered by the Council, acting unanimously. Only nationals of the Member States may be members of the Commission. The commission must include at least one national of each of the Member States, but may not include more than two members having the nationality of the same State. 2. The members of the Commission shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. Each Member State undertakes to respect this principle and not to seek to influence the members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. In the event of any breach of these obligations, the Court of Justice may, on application by the Council or the Commission, rule that the member concerned be, according to the circumstances, either compulsorily retired in accordance with Article 12a or deprived of his right to a pension or other benefits in its stead. ARTICLE 10 1. The members of the Commission shall be appointed in accordance with the procedure referred to in paragraph 2, for a period of five years, subject, if need be, to Article 24. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by common accord, after consulting the European Parliament, the person they intend to appoint as President of the Commission. The governments of the Members States shall, in consultation with the nominee for the President, nominate the other persons whom they intend to appoint as members of the Commission. The President and the other members of the Commission thus nominated shall be subject as a body to a vote of approval by the European Parliament. After approval by the European Parliament, the President and the other members of the Commission shall be appointed by common accord of the Member States. 3. Paragraphs 1 and 2 shall be applied for the first time to the President and the other members of the Commission whose term of office begins on 7 January 1995. The President and the other members of the Commission whose term of office beings on 7 January 1993 shall be appointed by common accord of the governments of the Member States. Their term of office shall expire on 6 January 1995. ARTICLE 11 The Commission may appoint a Vice-President or two Vice-Presidents from among its members. ARTICLE 12 Apart from normal replacement, or death, the duties of a member of the Commission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of the members term of office by a new member appointed by common accord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, the President shall be replaced for the remainder of his term of office. The procedure laid down in Article 10(2) shall be applicable for the replacement of the President. Save in the case of compulsory retirement under Article 12a, members of the Commission shall remain in office until they have been replaced. ARTICLE 12a If any member of the Commission no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct, the Court of Justice may, on application by the Council or the Commission, compulsorily retire him. ARTICLE 13 The Commission shall act by a majority of the number of members provided for in Article 9. A meeting of the Commission shall be valid only if the number of members laid down in its rules of procedure is present." 3) Article 16 shall be replaced by the following: "ARTICLE 16 The Commission shall make all appropriate administrative arrangements for the operation of its departments. It may set up study committees, including an economic study committee. The Council and the Commission shall consult each other and shall settle by common accord their methods of co-operation. The Commission shall adopt its rules of procedure so as to ensure that both it and its departments operate in accordance with the provisions of this Treaty. It shall ensure that these rules are published." 4) The following article shall be inserted: "ARTICLE 17 The commission shall publish annually, not later than one month before the opening of the session of the European Parliament, a general report on the activities of the Community." 5) The following subparagraph shall be added to Article 18: "The Council shall, acting by a qualified majority, determine any payment to be made instead of remuneration." 6) The following Articles shall be inserted: "ARTICLE 20a The European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal on matters which it considers that a Community act is required for the purpose of implementing this Treaty. ARTICLE 20b In the course of its duties, the European Parliament may, at the request of a quarter of its members, set up a temporary Committee of Inquiry to investigate, without prejudice to the powers conferred by this Treaty on other institutions or bodies, alleged contraventions or maladministration in the implementation of Community law, except where the alleged facts are being examined before a Court and while the case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on the submission of its report. The detailed provisions governing the exercise of the right of inquiry shall be determined by common accord of the European Parliament, the Council, and the Commission. ARTICLE 20c Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, shall have the right to address, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes within the Community's field's of activity and which affects him, her or it directly. ARTICLE 20d 1. The European Parliament shall appoint an Ombudsman empowered to receive complaints from any citizen of the Union or any natural or legal person residing or having its registered office in a Member State concerning instances of maladministration in the activities of the Community institutions or bodies, with the exception of the Court of Justice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct enquiries for which he finds grounds, either on his own initiative or on the basis of complaints submitted to him direct or through a member of the European Parliament, except where the alleged facts are or have been the subject of legal proceedings. Where the Ombudsman establishes an instance of maladministration, he shall refer the matter to the institution concerned, which shall have a period of three months in which to inform him of its views. The Ombudsman shall then forward a report to the European Parliament, and the institution concerned. The person lodging the complaint shall be informed of the outcome of such inquiries. The Ombudsman shall submit an annual report to the European Parliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of the European parliament for the duration of its term of office. The Ombudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at the request of the European Parliament if he no longer fulfils the conditions required for the performance of his duties or if he is guilty of serious misconduct. 3. The Ombudsman shall be completely independent in the performance of his duties. In the performance of those duties he shall neither seek nor take instructions from any body. The Ombudsman may not, during his term of office, engage in any other occupation, whether gainful or not. 4. The European Parliament shall, after seeking an opinion from the Commission and with the approval of the Council acting by a qualified majority, lay down the regulations and general conditions governing the performance of the Ombudsman's duties." 7) Paragraph 3 of Article 21 shall be replaced by the following: "3. The European Parliament shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all Member States. The Council shall, acting unanimously after obtaining the assent of the European Parliament, which shall act by a majority of its component members, lay down the appropriate provisions, which it shall recommend to Member States for adoption in accordance with their respective constitutional requirements." 8) Article 24 shall be replaced by the following: "ARTICLE 24 The European Parliament shall discuss in open session the general report submitted to it by the Commission. If a motion of censure on the activities of the Commission is tabled before it, the European Parliament shall not vote thereon until at least three days after the motion has been tabled and only by open vote. If a motion of censure is carried by a two-thirds majority of the votes cast, representing a majority of the members of the European Parliament, the members of the Commission shall resign as a body. They shall continue to deal with current business until they are replaced in accordance with Article 10. In this case, the term of office the members of the Commission appointed to replace them shall expire on the date on which the term of office of the members of the Commission obliged to resign as a body would have expired." 9) The following Articles shall be inserted: "ARTICLE 27 The Council shall consist of a representative of each Member State at a ministerial level, authorized to commit the government of that Member State. The office of President shall be held in turn by each Member State in the Council for a term of six months, in the following order of Member States: - for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom; - for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. ARTICLE 27a The Council shall meet when convened by its President on his own initiative or at the request of one of its members or of the Commission." 10) The following Article shall be inserted: "ARTICLE 29 The Council shall, acting by a qualified majority, determine the salaries, allowances and pensions of the President and members of the Commission, and of the President, Judges, Advocates-General and Registrar of the Court of Justice. It shall also, again by a qualified majority, determine any payment to be made instead of remuneration, ARTICLE 30 1. A committee consisting of the Permanent Representatives of the Member States shall be responsible for preparing the work of the Council and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under the direction of a Secretary General. The Secretary-General shall be appointed by the Council acting unanimously. The Council shall decide on the organization of the General Secretariat. 3. The Council shall adopt its rules of procedure." 11) Article 32 shall be replaced by the following; "ARTICLE 32 The Court of Justice shall consist of thirteen Judges. The Court of Justice shall sit in plenary session. It may, however, form Chambers, each consisting of three or five Judges, either to undertake certain preparatory inquiries, or to adjudicate on particular categories of cases in accordance with the rules laid down for these purposes. The Court of Justice shall sit in plenary session when a Member State or a Community institution that is a party to the proceedings so requests. Should the Court of Justice so request, the Council may, acting unanimously, increase the number of Judges and make the necessary adjustments to the second and third paragraphs of this Article and to the second paragraph of Article 32b." 12) Article 32d shall be replaced by the following: "ARTICLE 32d 1. A Court of First Instance shall be attached to the Court of Justice with jurisdiction to hear and determine at first instance, subject to a right of appeal to the Court of Justice on points of law only and in accordance with the conditions laid down by the Statute, certain classes of action or proceeding defined in accordance with the conditions laid down by the Statute, certain classes of action or proceeding defined in accordance with the conditions laid down in paragraph 2. The Court of First Instance shall not be competent to hear and determine questions referred for a preliminary ruling under Article 41. 2. At the request of the Court of Justice and after consulting the European Parliament and the Commission, the Council, acting unanimously, shall determine the classes of action or proceeding referred to in paragraph 1, and the composition of the Court of First instance and shall adopt the necessary adjustments and additional provisions to the Statute of the Court of Justice. Unless the Council decides otherwise, the provisions of this Treaty relating to the Court of Justice, in particular the provisions of the Protocol on the Statute of the Court of Justice, shall apply to the Court of the First Instance. 3. The members of the Court of First instance shall be chosen from persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office; they shall be appointed by common accord of the governments of the Member States for a term of six years. The membership shall be partially renewed every three years. Retiring members shall be eligible for re- appointment. 4. The Court of First Instance shall establish its rules of procedure in agreement with the Court of Justice. Those rules shall require the unanimous approval of the Council." 13) Article 33 shall be replaced by the following: "ARTICLE 33 The Court of Justice shall have jurisdiction in actions brought by a Member State or by the Council to have decisions or recommendations of the Commission declared void on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers. The Court of Justice may not, however, examine the evaluation of the situation, resulting from economic facts or circumstances, in the light of which the Commission took its decisions or made its recommendations, save where the Commission is alleged to have misused its powers or to have manifestly failed to observe the provisions of the Treaty or any rule of law relating to its application. Undertakings or associations referred to in Article 48 may, under the same conditions, institute proceedings against decisions or recommendations concerning them which are individual in character or against general decisions or recommendations which they consider to involve a misuse of powers affecting them. The proceedings provided for in the first two paragraphs of this Article shall be instituted within one month of the notification or publication, as the case may be, of the decision or recommendation. The Court of Justice shall have jurisdiction under the same conditions in actions brought by the European Parliament for the purpose of protecting its prerogatives." 14) The following chapter shall be inserted: "CHAPTER V THE COURT OF AUDITORS ARTICLE 45a The Court of Auditors shall carry out the audit. ARTICLE 45b 1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from among persons who belong or have belonged in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a term of six years by the Council, acting unanimously after consulting the European Parliament. However, when the first appointments are made, four members of the Court of Auditors, chosen by lot, shall be appointed for a term of office of four years only. The members of the Court of Auditors shall be eligible for reappointment. They shall elect the President of the Court of Auditors from among their number for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member of the Court of Auditors shall end when he resigns, or is compulsorily retired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of the member's term of office. Save in the case of compulsory retirement, members of the Court of Auditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or of his right to a pension or other benefits in its stead only if the Court of Justice, at the request of the Court of Auditors, finds that he no longer fulfills the requisite conditions or meets the obligations arising from his office. 8. The Council, acting by a qualified majority, shall determine the conditions of employment of the President and the members of the Court of Auditors and in particular their salaries, allowances and pensions. It shall also, by the same majority, determine any payment to be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities of the European Communities applicable to the Judges of the Court of Justice shall also apply to the members of the Court of Auditors. ARTICLE 45c 1. The Court of Auditors shall examine the accounts of all revenue and expenditure of the Community. It shall also examine the accounts of all revenue and expenditure of all bodies set up by the Community in so far as the relevant constituent instrument does not preclude such examination. The Court of Auditors shall provide the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. 2. The Court of Auditors shall examine whether all revenue referred to in paragraph 1 has been received and all expenditure referred to in that paragraph has been incurred in a lawful and regular manner and whether the financial management has been sound. The audit of revenue shall be carried out on the basis of the amounts established as due and the amounts actually paid to the community. The audit of expenditure shall be carried out on the basis both of commitments undertaken and payments made. These audits may be carried out before the closure of accounts for the financial year in question. 3. The audit shall be based on records and, if necessary, performed on the spot in the other institutions of the Community and in the Member States. In the Member States the audit shall be carried out in liaison with the national audit bodies or, if these do not have the necessary powers, with the competent national departments. Theses bodies or departments shall inform the Court of Auditors whether they intend to take part in the audit. The other institutions of the Community and the national audit bodies or, if these do not have the necessary powers, the competent national departments, shall forward to the Court of Auditors, at its request, any document or information necessary to carry out its task. 4. The Court of Auditors shall draw up an annual report after the close of each financial year. It shall be forwarded to the other institutions of the Community and shall be published, together with the replies of these institutions to the observations of the Court of Auditors, in the Official Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions and deliver opinions at the request of one of the other institutions of the Community. It shall adopt its annual reports, special reports or opinions by a majority of its members. It shall assist the Europe and Parliament and the Council in exercising their powers of control over the implementation of the budget. 5. The Court of Auditors shall also draw up a separate annual report stating whether the accounting other than that for the expenditure and revenue referred to in paragraph 1 and the financial management by the Commission relating thereto have been effected in a regular manner. It shall draw up this report within six months of the end of the financial year to which the accounts refer and shall submit it to the Commission and the Council. The Commission shall forward it to the European Parliament." 15) Article 78c shall be replaced by the following: "ARTICLE 78c The Commission shall implement the administrative budget, in accordance with the provisions of the regulations made pursuant to Article 78h, on its own responsibility and within the limits of the appropriations, having regard to the principles of sound financial management. The regulations shall lay down detailed rules for each institution concerning its part in effecting its own expenditure. Within the administrative budget, the Commission may, subject to the limits and conditions laid down in the regulations made pursuant to Article 78h, transfer appropriations from one chapter to another or from one subdivision to another." 16) Articles 78e and 78f shall be repealed. 17) Article 78g shall be replaced by the following: "ARTICLE 78g 1. The European Parliament, acting on a recommendation from the Council, which shall act by a qualified majority, shall give a discharge to the Commission in respect of the implementation of the administrative budget. To this end, the Council and the European Parliament in turn shall examine the account and the financial statement referred to in Article 78d, the annual report by the Court of Auditors together with the replies of the institutions under audit to the observations of the Court of Auditors, and any relevant special reports by the Court of Auditors. 2. Before giving a discharge to the Commission, or for any other purpose in connection with the exercise of its powers over the implementation of the administrative budget, the European Parliament may ask to hear the Commission give evidence with regard to the execution of expenditure or the operation of financial control systems. The Commission shall submit any necessary information to the European Parliament at the latter's request. 3. The Commission shall take all appropriate steps to act on the observations in the decisions giving discharge on other observations by the European Parliament relating to the execution of expenditure, as well as on comments accompanying the recommendations on discharge adopted by the Council. At the request of the European Parliament or Council, the Commission shall report on the measures taken in the light of these observations and comments and in particular on the instructions given to the departments which are responsible for the implementation of the administrative budget. These reports shall also be forwarded to the Court of Auditors." 18) Article 78h shall be replaced by the following: "ARTICLE 78h The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall: a) make Financial Regulations specifying in particular the procedure to be adopted for establishing the implementing the administrative budget and for presenting and auditing accounts; b) determine the methods and procedure whereby the budget revenue provided under the arrangements relating to the Communities' own resources shall be made available to the Commission, and determine the measures to be applied, if need be, to meet cash requirements; c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerning appropriate arrangements for inspection." 19) The following Article shall be inserted: "ARTICLE 78i Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests. Without prejudice to other provisions of this Treaty, Member States shall co-ordinate their action aimed at protecting the financial interests of the Community against fraud. To this end they shall organize, with the help of the Commission, close and regular co-operation between the competent departments of their administrations." 20) Article 79(a) shall be replaced by the following: "(a) This Treaty shall not apply to the Faroe Islands." 21) Articles 96 and 98 shall be repealed.

TITLE4 PROVISIONS AMENDING THE TREATY ESTABLISHING THE EUROPEAN ATOMIC ENERGY COMMUNITY

ARTICLE 1 The Treaty establishing European Atomic Energy Community shall be amended in accordance with the provisions of this Article. 1) Article 3 shall be replaced by the following: "ARTICLE 3 1) The tasks entrusted to the Community shall be carried out by the following institutions: - a EUROPEAN PARLIAMENT, - a COUNCIL, - a COMMISSION, - a COURT OF JUSTICE, - a COURT OF AUDITORS. Each institution shall act within the limits of the powers conferred upon it by this Treaty. 2. The Council and the Commission shall be assisted by an Economic and Social Committee acting in an advisory capacity." 2) The following Articles shall be inserted: "ARTICLE 107a The European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal on matters on which it considers that a Community act is required for the purpose of implementing this Treaty. ARTICLE 107b In the course of its duties, the European Parliament may, at the request of a quarter of its members, set up a temporary Committee of Inquiry to investigate, without prejudice to the powers conferred by this Treaty on other institutions or bodies, alleged contraventions or maladministration in the implementation of Community law, except where the alleged facts are being examined before a court and while the case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on the submission of its report. The detailed provisions governing the exercise of the right of inquiry shall be determined by common accord of the European Parliament, the Council and the Commission. ARTICLE 107c Any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, shall have the right to address, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes within the Community's fields of activity and which affects him, her or it directly. ARTICLE 107d 1. The European Parliament shall appoint an Ombudsman empowered to receive complaints from any citizen of the Union or any natural or legal person residing or having its registered office in a Member State concerning instances of maladministration in the activities of the Community institutions or bodies, with the exception of the Court of Justice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct inquiries for which he finds grounds, either on his own initiative or on the basis of complaints submitted to him direct or through a member of the European Parliament, except where the alleged facts are or have been the subject of legal proceedings. Where the Ombudsman establishes an instance of maladministration, he shall refer the matter to the institution concerned. The person lodging the complaint shall be informed of the outcome of such inquiries. The Ombudsman shall submit an annual report to the European Parliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of the European Parliament for the duration of its term of office. The Ombudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at the request of the European Parliament if he no longer fulfils the conditions required for the performance of his duties or if he is guilty of serious misconduct. 3. The Ombudsman shall be completely independent in the performance of his duties. In the performance of those duties he shall neither seek nor take instructions form any body. The Ombudsman may not, during his term of office, engage in any other occupation, whether gainful or not. 4. The European Parliament shall, after seeking an opinion from the Commission and with the approval of the Council acting by a qualified majority, lay down the regulations and general conditions governing the performance of the Ombudsman's duties." 3) Paragraph 3 of Article 108 shall be replaced by the following: "3. The European Parliament shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all Member States. The Council shall, acting unanimously after obtaining the assent of the European Parliament, which shall act by a majority of its component members, lay down the appropriate provisions, which it shall recommend to Member States for adoption in accordance with their respective constitutional requirements." 4) The second subparagraph of Article 114 shall be supplemented by the following sentence: "In this case, the term of office of the members of the Commission appointed to replace them shall expire on the date on which the term of office of the members of the Commission obliged to resign as a body would have expired." 5) The following Articles shall be inserted: "ARTICLE 116 The Council shall consist of a representative of each Member State at ministerial level, authorized to commit the government of that Member State. The office of President shall be held in turn by each Member State in the Council for a term of six months, in the following order of Member States. - for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom. - for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. ARTICLE 117 The Council shall meet when convened by its President on his own initiative or at the request of one of its members or of the Commission." 6) The following Article shall be inserted: "ARTICLE 121 1. A committee consisting of the Permanent Representatives of the Member States shall be responsible for preparing the work of the Council and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under the direction of a Secretary-General. The Secretary-General shall be appointed by the Council acting unanimously. The Council shall decide on the organization of the General Secretariat. 3. The Council shall adopt its rules of procedure." 7) The following Article shall be inserted: "ARTICLE 123 The Council shall, acting by a qualified majority, determine the salaries, allowances and pensions of the President and members of the Commission, and of the President, Judges, Advocates-General and Registrar of the Court of Justice. It shall also, again by a qualified majority, determine any payment to be made instead of remuneration." 8) The following Articles shall be inserted; "ARTICLE 125 The Commission shall publish annually, not later than one month before the opening of the session of the European Parliament, a general report on the activities of the Community. ARTICLE 126 1. The Commission shall consist of seventeen members, who shall be chosen on the grounds of their general competence and whose independence is beyond doubt. The number of members of the Commission may be altered by the Council, acting unanimously. Only nationals of the Member States may be members of the Commission. The Commission must include at least one national of each of the Member States, but may not include more than two members having the nationality of the same State. 2. The members of the Commission shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. Each Member State undertakes to respect this principle and not to seek to influence the members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term or office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance after they have ceased to hold office, of certain appointments or benefits. In the event of any breach of these obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. In the event of any breach of these obligations, the Court of Justice may, on application by the Council or the Commission, rule that the member concerned be, according to the circumstances, either compulsorily retired in accordance with Article 129 or deprived of his right to a pension or other benefits in its stead. ARTICLE 127 1. The members of the Commission shall be appointed, in accordance with the procedure referred to in paragraph 2, for a period of five years, subject, if need be, to Article 114. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by common accord, after consulting the European Parliament, the person they intend to appoint as President of the Commission. The governments of the Member States shall, in consultation with the nominee for President, nominate the other persons whom they intend to appoint as members of the Commission. The President and other members of the Commission thus nominated shall be subject as a body to a vote of approval by the European Parliament. After approval by the European Parliament, the President and the other members of the Commission shall be appointed by common accord of the governments of the Member States. 3. Paragraphs 1 and 2 shall be applied for the first time to the President and other members of the Commission whose term of office begins on 7 January 1995. The President and the other members of the Commission whose term of office begins on 7 January 1993 shall be appointed by common accord of the governments of the Member States. Their term of office shall expire on 6 January 1995. ARTICLE 128 Apart from normal replacement, or death, the duties of a member of the Commission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of the member's term of office by a new member appointed by common accord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, the President shall be replaced for the remainder of his term of office. The procedure laid down in Article 127(2) shall be applicable for the replacement of the President. Save in the case of compulsory retirement under Article 129, members of the Commission shall remain in office until they have been replaced. ARTICLE 129 If any member of the Commission no longer fulfills the conditions required for the performance of his duties or if he has been guilty of serious misconduct, the Court of Justice may, on application by the Council or Commission, compulsorily retire him. ARTICLE 130 The Commission may appoint a Vice-President or two Vice-Presidents from among its members. ARTICLE 131 The Council and the Commission shall consult each other and shall settle by common accord their methods of co-operation. The Commission shall adopt its rules of procedure so as to ensure that both it and its departments operate in accordance with the provisions of the Treaty. It shall ensure that these rules are published. ARTICLE 132 The Commission shall act by a majority of the number of members provided for in Article 126. A meeting of the Commission shall be valid only if the number of members laid down in its rules of procedure is present." 9) Article 133 shall be repealed. 10) Article 137 shall be replaced by the following: "ARTICLE 137 The Court of Justice shall consist of thirteen Judges. The Court of Justice shall sit in plenary session. It may, however, form Chambers, each consisting of three or five Judges, either to undertake certain preparatory inquiries or to adjudicate on particular categories of cases in accordance with the rules laid down for these purposes. The Court of Justice shall Sit in plenary session when a Member State or a Community institution that is a party to the proceedings so requests. Should the Court of Justice so request, the Council may, acting unanimously, increase the number of Judges and make the necessary adjustments to the second and third paragraphs of this Article 139." 11) Article 140a shall be replaced by the following: "ARTICLE 140a 1. A Court of First Instance shall be attached to the Court of Justice with jurisdiction to hear and determine at first instance, subject to a right of appeal to the Court of Justice on points of law only and in accordance with the conditions laid down by the Statute, certain classes of action or proceeding defined in accordance with the conditions laid down in paragraph 2. The Court of First Instance shall not be competent to hear and determine questions referred for a preliminary ruling under Article 150. 2. At the request of the Court of Justice and after consulting the European Parliament and the Commission, the Council, acting unanimously, shall determine the classes of action or proceeding referred to in paragraph 1 and the composition of the Court of First Instance and shall adopt the necessary adjustments and additional provisions to the Statute of the Court of Justice. Unless the Council decides otherwise, the provisions of this Treaty relating to the Court of Justice, in particular the provisions of the Protocol on the Statute of the Court of Justice, shall apply to the Court of the First Instance. 3. The members of the Court of First Instance shall be chosen from persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office; they shall be appointed by common accord of the governments of the Member States for a term of six years. The membership shall be partially renewed every three years. Retiring members shall be eligible for re- appointment. 4. The Court of First Instance shall establish its rules of procedure in agreement with the Court of Justice. Those rules shall require the unanimous approval of the Council." 12) Article 143 shall be replaced by the following: "ARTICLE 143 1. If the Court of Justice finds that a Member State has failed to fulfil an obligation under this Treaty, the State shall be required to take the necessary measures to comply with the judgment of the Court of Justice. 2. If the Commission considers that the Member State concerned has not taken such measures it shall, after giving that State the opportunity to submit its observations, issue a reasoned opinion specifying the points which the Member State concerned has not complied with the judgment of the Court of Justice. If the Member State concerned fails to take the necessary measures to comply with the Court's judgment within the time-limit laid down by the Commission, the latter may bring the case before the Court of Justice. In so doing it shall specify the amount of the lump sum or penalty payment to be paid by the Member State concerned which it considers appropriate in the circumstances. If the Court of Justice finds that the Member State concerned has not complied with its judgment it may impose a lump sum or penalty payment on it. This procedure shall be without prejudice to Article 142." 13) Article 146 shall be replaced by the following: "ARTICLE 146 The Court of Justice shall review the legality of acts of the Council and of the Commission, other than recommendations and opinions, and of acts of the European Parliament intended to produce legal effects vis- a-vis third parties. It shall for this purpose have jurisdiction in actions brought by a Member State, the Council or the Commission on grounds of lack of competence, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers. The Court shall have jurisdiction under the same conditions in actions brought by the European Parliament for the purpose of protecting its prerogatives. Any natural or legal person may, under the same conditions, institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. The proceedings provided for in this Article shall be instituted within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be." 14) The following Section shall be inserted; "SECTION V THE COURT OF AUDITORS ARTICLE 160a The Audit shall be carried out by the Court of ~Auditors. ARTICLE 160b 1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from among persons who belong or have belonged in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a term of six years by the Council, acting unanimously after consulting the European Parliament. However, when the first appointments are made, four members of the Court of Auditors, chosen by lot, shall be appointed for a term of office of four years only. The members of the Court of Auditors shall be eligible for reappointment. They shall elect the President of the Court of Auditors from among their number for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest of the Community, be completely independent in the performance of their duties. In the performance of these duties, they shall neither seek nor take instructions from any government or from any other body. They shall refrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member of the Court of Auditors shall end when he resigns, or is compulsorily retired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of the member's term of office. Save in the case of compulsory retirement, members of the Court of Auditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or of his right to a pension or other benefits in its stead only if the Court of Justice, at the request of the Court of Auditors, finds that he no longer fulfills the requisite conditions or meets the obligations arising from his office. 8. The Council, acting by a qualified majority, shall determine the conditions of employment of the President and the members of the Court of Auditors and in particular their salaries, allowances and pensions. It shall also, by the same majority, determine any payment to be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities of the European Communities applicable to the judges of the Court of Justice shall also apply to the members of the Court of Auditors. ARTICLE 160c 1. The Court of Auditors shall examine the accounts of all revenue and expenditure of the Community. It shall also examine the accounts of all revenue and expenditure of all bodies set up by the Community insofar as the relevant constituent instrument does not preclude such examination. The Court of Auditors shall provide the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. 2. The Court of Auditors shall examine whether all revenue has been received and all expenditure incurred in a lawful and regular manner and whether the financial management has been sound. The audit of revenue shall be carried out on the basis of the amounts established as due and the amounts actually paid to the Community. The audit of expenditure shall be carried out on the basis both of commitments undertaken and payments made. These audits may be carried out before the closure of accounts for the financial year in question. 3. The audit shall be based on records and, if necessary, performed on the spot in the other institutions of the Community and in the Member States. In the Member States the audit shall be carried out in liaison with the national audit bodies or, if these do not have the necessary powers, with the competent national departments. These bodies or departments shall inform the Court of Auditors whether they intend to take part in the audit. The other institutions of the Community and the national audit bodies or, if these do not have the necessary powers, the competent national department, shall forward to the Court of Auditors, at its request, any document or information necessary to carry on its task. 4. The Court of Auditors shall draw up an annual report after the close of each financial year. It shall be forwarded to the other institutions of the Community and shall be published, together with the replies of these institutions to the observations of the Court of Auditors, in the Official Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions and deliver opinions at the request of one of the other institutions of the Community. It shall adopt its annual reports, special reports or opinions by a majority of its members. It shall assist the European Parliament and the Council in exercising their powers of control over the implementation of the budget." 15) Article 166 shall be replaced by the following: "ARTICLE 166 The number of members of the Economic and Social Committee shall be as follows: Belgium 12 Denmark 9 Germany 24 Greece 12 Spain 21 France 24 Ireland 9 Italy 24 Luxembourg 6 Netherlands 12 Portugal 12 United Kingdom 24 The members of the Committee shall be appointed by the Council, acting unanimously, for four years. Their appointment shall be renewable. The members of the Committee may not be bound by any mandatory instructions. They shall be completely independent in the performance of their duties, in the general interest of the Community. The Council, acting by qualified majority, shall determine the allowances of the members of the Committee." 168 shall be replaced by the following; "ARTICLE 168 The Committee shall elect its chairman and officers from among its members for a term of two years. It shall adopt its rules of procedure. The Committee shall be convened by its chairman at the request of the Council or of the Commission. It may also meet on its own initiative." 17) Article 170 shall be replaced by the following: "ARTICLE 170 The Committee must be consulted by the Council or by the Commission where this Treaty so provides. The Committee may be consulted by these institutions in all cases in which they consider it appropriate. It may issue an opinion on its own initiative in cases in which it considers such action appropriate. The Council or the Commission shall, if it considers it necessary, set the Committee, for the submission of its opinion, a time limit which may not be less than one month from the date on which the chairman receives notification to this effect. Upon expiry of the time limit, the absence of an opinion shall not prevent further action. The opinion of the Committee and that of the specialized section, together with a record of the proceedings, shall be forwarded to the Council and to the Commission." 18) Paragraphs 1 to 3 of Article 172 shall be repealed. 19) Article 173 shall be replaced by the following: "ARTICLE 173 Without prejudice to other revenue, the budget shall be financed wholly from own resources. The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, shall lay down provisions relating to the system of own resources of the Community, which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements." 20) The following Article shall be inserted: "ARTICLE 173a With a view to maintaining budgetary discipline, the Commission shall not make any proposal for a Community act, or alter its proposals, or adopt any implementing measure which is likely to have appreciable implications for the budget without providing the assurance that that proposal or that measure is capable of being financed within the limit to the Community's own resources arising under provisions laid down by the Council pursuant to Article 173." 21) Article 179 shall be replaced by the following: "ARTICLE 179 The Commission shall implement the budgets, in accordance with the provisions of the regulations made pursuant to Article 183, on its own responsibility and within the limits of the appropriations, having regard to the principles of sound financial management. The regulations shall lay down detailed rules for each institution concerning its part in effecting its own expenditure. Within the budgets, the Commission may, subject to the limits and conditions laid down in the regulations made pursuant to Article 183, transfer appropriations from one chapter to another or from on subdivision to another." 22) Articles 180 and 180a shall be repealed. 23) Article 180b shall be replaced by the following: "ARTICLE 180b 1. The European Parliament, acting on a recommendation from the Council which shall act by a qualified majority, shall give a discharge to the Commission in respect of the implementation of the budget. To this end, the Council and the European Parliament in turn shall examine the accounts and the financial statement referred to in Article 179a, the annual report by the Court of Auditors together with the replies of the institutions under audit to the observations of the Court of Auditors, and any relevant special reports by the Court of Auditors. 2. Before giving a discharge to the Commission, or for any other purpose in connection with the exercise of its powers over the implementation of the budget, the European Parliament may ask to hear the Commission give evidence with regard to the execution of expenditure or the operation of financial control systems. The Commission shall submit any necessary information to the European Parliament at the latter's request. 3. The Commission shall take all appropriate steps to act on the observations in the decisions giving discharge and on the other observations by the European Parliament relating to the execution of expenditure, as well as on comments accompanying the recommendations on discharge adopted by the Council. At the request of the European Parliament or the Council, the Commission shall report on the measures taken in the light of these observations and comments and in particular of the instructions given to the departments which are responsible for the implementation of the budgets. These reports shall also be forwarded to the Court of Auditors." 24) Article 183 shall be replaced by the following: "ARTICLE 183 The Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament and obtaining the opinion of the Court of Auditors, shall: (a) make Financial Regulations specifying in particular the procedure to be adopted for establishing and implementing the budget and for presenting and auditing accounts; (b) determine the methods and procedure whereby the budget revenue provided under the arrangements relating to the Community's own resources shall be made available to the Commission, and determine the measures to be applied, if need be, to meet cash requirements; (c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerning appropriate arrangements for inspection." 25) The following Article shall be inserted: "ARTICLE 183a Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests. Without prejudice to other provisions of this Treaty, Member States shall co-ordinate their actions aimed at protecting the financial interests of the Community against fraud. To this end they shall organize, with the help of the Commission, close and regular co- operation between the competent departments of their administrations." 26) Article 198)a) shall be replaced by the following: "(a) This Treaty shall not apply to the Faroe Islands." 27) Article 201 shall be replaced by the following: "ARTICLE 201 The Community shall establish close co-operation with the Organization for Economic Co-operation and Development, the details of which shall be determined by common accord." 28) Articles 204 and 205 shall be repealed. 29) Article 206 shall be replaced by the following: "ARTICLE 206 The Community may conclude with one or more States or international organizations agreements establishing an association involving reciprocal rights and obligations, common action and special procedures. These agreements shall be concluded by the Council, acting unanimously after consulting the European Parliament. Where such agreements call for amendments to this Treaty, these amendments shall first be adopted in accordance with the procedure laid down in Article N of the Treaty on European Union."

TITLE5 PROVISIONS ON A COMMON FOREIGN AND SECURITY POLICY

ARTICLE J A common foreign and security policy is hereby established which shall be governed by the following provisions.

ARTICLE J.1 1. The union and its Member States shall define and implement a common foreign and security policy, governed by the provisions of the Title and covering all areas of foreign and security policy. 2. The objectives of the common foreign and security policy shall be: - to safeguard the common values, fundamental interests and independence of the Union; - to strengthen the security of the Union and its Member States in all ways; - to preserve peace and strengthen international security, in accordance with the principles of the United Nations Charter as well as the principles of the Helsinki Final Act and the objectives of the Paris Charter; - to promote international co-operation; - to develop and consolidate democracy and the rule of law, and respect for human rights and fundamental freedoms. 3. The Union shall pursue these objectives; - by establishing systematic co-operation between Member States in the conduct of policy, in accordance with Article J.2; - by gradually implementing, in accordance with Article J.3, joint action in the areas in which the Member States have important interests in common. 4. The Member States shall support the Union's external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity. They shall refrain from any action which is contrary to the interests of the Union or likely to impair its effectiveness as a cohesive force in international relations. The Council shall ensure that these principles are complied with.

ARTICLE J.2 1. Member States shall inform and consult one another within the Council on any matter of foreign and security policy of general interest in order to ensure that their combined influence is exerted as effectively as possible by means of concerted and convergent action. 2. Whenever it deems it necessary, the Council shall define a common position. Member States shall ensure that their national policies conform on the common positions. 3. Member States shall co-ordinate their action in international organizations and at international conferences. They shall uphold the common positions in such fora. In international organizations and at international conferences where not all the Member States participate, those which do take part shall uphold the common positions.

ARTICLE J.3 The procedure for adopting joint action in matters covered by foreign and security policy shall be the following: 1. The Council shall decide, on the basis of general guidelines from the European Council, that a matter should be the subject of joint action. Whenever the Council decides on the principle of joint action, it shall lay down the specific scope, the Union's general and specific objectives in carrying out such action, if necessary its duration, and the means, procedures and conditions for its implementation. 2. The Council shall, when adopting the joint action and at any stage during its development, define those matters on which decisions are to be taken by a qualified majority. Where the Council is required to act by a qualified majority pursuant to the preceding subparagraph, the votes of its members shall be weighted in accordance with Article 148(2) of the Treaty establishing the European Community, and for their adoption, acts of the Council shall require at least fifty-four votes in favour, cast by at least eight members. 3. If there is a change in circumstances having a substantial effect on a question subject to joint action, the Council shall review the principles and objectives of that action and take the necessary decisions. As long as the Council has not acted, the joint action shall stand. 4. Joint actions shall commit the Member States in the positions they adopt and in the conduct of their activity. 5. Whenever there is any plan to adopt a national position or take national action pursuant to a joint action, information shall be provided in time to allow, if necessary, for prior consultations within the Council. The obligation to provide prior information shall not apply to measures which are merely a national transposition of Council decisions. 6. In cases of imperative need arising from changes in the situation and failing a Council decision, Member States may take the necessary measures as a matter of urgency having regard to the general objectives of the joint action. The Member State concerned shall inform the Council immediately of any such measures. 7. Should there be any major difficulties in implementing a joint action, a Member State shall refer them to the Council which shall discuss them and seek appropriate solutions. Such solutions shall not run counter to the objectives of the joint action or impair its effectiveness.

ARTICLE J.4 1. The common foreign and security policy shall include all questions related to the security of the Union, including the eventual framing of a common defence policy, which might in time lead to a common defence. 2. The union requests the Western European Union (WEU), which is an integral part of the development of the Union, to elaborate and implement decisions and actions of the Union which have defence implications. The Council shall, in agreement with the institutions of the WEU, adopt the necessary practical arrangements. 3. Issues having defence implications dealt with under this Article shall not be subject to the procedures set out in Article J.3. 4. The policy of the Union in accordance with this Article shall not prejudice the specific character of the security and defence policy of certain Member States and shall respect the obligations of certain Member States under the North Atlantic Treaty and be compatible with the common security and defence policy established within that framework. 5. The provisions of this Article shall not prevent the development of closer co-operation between two or more Member States on a bilateral level, in the framework of the WEU and the Atlantic Alliance, provided such co-operation does not run counter to or impede that provided for in this Title. 6. With a view to furthering the objective of this Treaty, and having in view the date of 1998 in the context of Article XII of the Brussels Treaty, the provisions of this Article may be revised as provided for in Article N(2) on the basis of a report to be presented in 1996 by the Council to the European Council, which shall include an evaluation of the progress made and the experience gained until then.

ARTICLE J.5 1. The Presidency shall represent the Union in matters coming within the common foreign and security policy. 2. The Presidency shall be responsible for the implementation of common measures; in that capacity it shall in principle express the position of the Union in international organizations and international conferences. 3. In the tasks referred to in paragraphs 1 and 2, the presidency shall be assisted if needs be by the previous and next Member States to hold the Presidency. The Commission shall be fully associated in these tasks. 4. Without prejudice to Article J.2(3) and Article J.3(4), Member States represented in international organizations or international conferences where not all the Member States participate shall keep the latter informed of any matter of common interest. Member States which are also members of the United Nations Security Council will concert and keep the other Member States fully informed. Member States which are permanent members of the Security Council will, in the execution of their functions, ensure the defence of the positions and the interests of the union, without prejudice to their responsibilities under the provisions of the United Nations Charter.

ARTICLE J.6 The diplomatic and consular missions of the Member States and the Commission Delegations in third countries and international conferences, and their representations to international organizations, shall co-operate in ensuring that the common positions and common measures adopted by the Council are complied with and implemented. They shall step up co-operation by exchanging information, carrying out joint assessments and contributing to the implementation of the provisions referred to in Article 8c of the Treaty establishing the European Community.

ARTICLE J.7 The Presidency shall consult the European Parliament on the main aspects and the basic choices of the common foreign and security policy and shall ensure that the views of the European Parliament are duly taken into consideration. The European Parliament shall be kept regularly informed by the Presidency and the Commission of the development of the Union's foreign and security policy. The European Parliament may ask questions of the Councils or make recommendations to it. It shall hold an annual debate on progress in implementing the common foreign and security policy.

ARTICLE J.8 1. The European Council shall define the principles of and general guidelines for the common foreign and security policy. 2. The Council shall take the decisions necessary for defining and implementing the common foreign and security policy on the basis of the general guidelines adopted by the European Council. It shall ensure the unity, consistency and effectiveness of action by the Union. The Council shall act unanimously, except for procedural questions and in the case referred to in Article J.3(2). 3. Any Member State or the Commission may refer to the Council any question relating to the common foreign policy and may submit proposals to the Council. 4. In cases requiring a rapid decision, the Presidency, of its own motion, or at the request of the Commission or a Member State, shall convene an extraordinary Council meeting within forty-eight hours or, in an emergency, within a shorter period. 5. Without prejudice to Article 151 of the Treaty establishing the European Community, a Political Committee consisting of Political Directors shall monitor the international situation in the areas covered by common foreign and security policy and contribute to the definition of policies by delivering opinions to the Council at the request of the Council or on its own initiative. It shall also monitor the implementation of agreed policies, without prejudice to the responsibility of the Presidency and the Commission.

ARTICLE J.9 The Commission shall be fully associated with the work carried out in the common foreign and security policy field.

ARTICLE J.10 On the occasion of any review of the security provisions under Article J.4, the Conference which is convened to that effect shall also examine whether any other amendments need to be made to provisions relating to the common foreign and security policy.

ARTICLE J.11 1. The provisions referred to in Articles 137, 138, 139 to 142, 146, 147, 150 to 153, 157 to 163 and 217 of the Treaty establishing the European Community shall apply to the provisions relating to the areas referred to in this Title. 2. Administrative expenditure which the provisions relating to the areas referred to in this Title entail for the institutions shall be charged to the budget of the European Communities. The Council may also: - either decide unanimously that operational expenditure to which the implementation of those provisions gives rise is to be charged to the budget of the European Communities; in that event, the budgetary procedure laid down in the Treaty establishing the European Community shall be applicable; - or determine that such expenditure shall be charged to the Member States, where appropriate in accordance with a scale to be decided.

TITLE6 PROVISIONS ON COOPERATION IN THE FIELDS OF JUSTICE AND HOME AFFAIRS

ARTICLE K Co-operation in the fields of justice and home affairs shall be governed by the following provisions.

ARTICLE K.1 For the purposes of achieving the objectives of the Union, in particular the free movement of persons, and without prejudice to the powers of the European Community, Member States shall regard the following areas as matters of common interest: 1. asylum policy; 2. rules governing the crossing by persons of the external borders of the Member States and the exercise of controls thereon; 3. immigration policy and policy regarding nationals of third countries; (a) conditions of entry and movement by nationals of third countries on the territory of Member States; (b) conditions of residence by nationals of third countries on the territory of Member States, including family reunion and access to employment; (c) combatting unauthorized immigration, residence and work by nationals of third countries on the territory of Member States; 4. combating drug addiction in so far as this is not covered by 7 to 9; 5. combating fraud on an international scale in so far as this is not covered by 7 to 9; 6. judicial co-operation in civil matters; 7. judicial co-operation in criminal matters; 8. customs co-operation; 9. police co-operation for the purposes of preventing and combating terrorism, unlawful drug trafficking and other serious forms of international crime, including if necessary certain aspects of customs co-operation, in connection with the organization of a Union-wide system for exchanging information within a European Police Office (Europol).

ARTICLE K.2 1. The matters referred to in Article K.1 shall be dealt with in compliance with the European Convention for the Protection of Human Rights and Fundamental Freedoms of 4 November 1950 and the Convention relating to the Status of Refugees of 28 July 1951 and having regard to the protection afforded by Member States to persons persecuted on political grounds. 2. This Title shall not affect the exercise of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security.

ARTICLE K.3 1. In the areas referred to in Article K.1, Member States shall inform and consult one another within the Council with a view to co-ordinating their action. To that end, they shall establish collaboration between the relevant departments of their administrations. 2. The Council may: - on the initiative of any Member State or of the Commission, in the areas referred to in Article K.1(1) to (6); - on the initiative of any Member State, in the areas referred to Article K1(7) to (9): (a) adopt joint positions and promote, using the appropriate form and procedures, any co-operation contributing to the pursuit of the objectives of the Union; (b) adopt joint action in so far as the objectives of the Union can be attained better by joint action than by the Member States acting individually on account of the scale or effects of the action envisaged; it may decide that measures implementing joint action are to be adopted by a qualified majority; (c) without prejudice to Article 220 of the Treaty establishing the European Community, draw up conventions which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements. Unless otherwise provided by such conventions, measures implementing them shall be adopted within the Council by a majority of two-thirds of the High Contracting Parties. Such conventions may stipulate that the Court of Justice shall have jurisdiction to interpret their provisions and to rule on any disputes regarding their application, in accordance with such arrangements as they may lay down.

ARTICLE K.4 1. A Co-ordinating Committee shall be set up consisting of senior officials. In additions to its co-ordinating role, it shall be the task of the Committee to; - give opinions for the attention of the Council, either at the Councils request or on its own initiative; - contribute, without prejudice to Article 151 of the Treaty establishing the European Community, to the preparation of the Council's discussions in the areas referred to in Article K.1 and, in accordance with the conditions laid down in Article 100d of the Treaty establishing the European Community, in the areas referred to in Article 100c of that Treaty. 2. The Commission shall be fully associated with the work in the areas referred to in this Title. 3. The Council shall act unanimously, except on matters of procedure and in cases where Article K.3 expressly provides for other voting rules. Where the Council is required to act by a qualified majority, the votes of its members shall be weighted as laid down in Article 148(2) of the Treaty establishing the European Community, and for their adoption, acts of the Council shall require at least fifty-four votes in favour, cast by at least eight members.

ARTICLE K.5 Within international organizations and at international conferences in which they take part, Member States shall defend the common positions adopted under the provisions of this Title.

ARTICLE K.6 The Presidency and the Commission shall regularly inform the European Parliament of discussions in the areas covered by this Title. The Presidency shall consult the European Parliament on the principal aspects of activities in the areas referred to in this Title and shall ensure that the views of the European Parliament are duly taken into consideration. The European Parliament may ask questions of the Council or make recommendations to it. Each year, it shall hold a debate on the progress made in implementation of the areas referred to in this Title.

ARTICLE K.7 The provisions of this Title shall not prevent the establishment or development of closer co-operation between two or more Member States in so far as such co-operation does not conflict with, or impede, that provided for in this Title.

ARTICLE K.8 1. The provisions referred to in Article 137,138,139 top 142, 146, 147, 150 to 153, 157 to 163 and 217 of the Treaty establishing the European Community shall apply to the provisions relating to the areas referred to in this Title. 2. Administrative expenditure which the provisions relating to the areas referred to in this Title entail for the institutions shall be charged to the budget of European Communities. The Council may also: - either decide unanimously that operational expenditure to which the implementation of those provisions gives rise is to be charged to the budget of the European Communities; in that event, the budgetary procedure laid down in the treaty establishing the European Community shall be applicable; - or determine that such expenditure shall be charged to the Member States, where appropriate in accordance with a scale to be decided.

ARTICLE K.9 The Council, acting unanimously on the initiative of the Commission or a Member State, may decide to apply Article 100c of the Treaty establishing the European Community to action in areas referred to in Article K.1(1) to (6), and at the same time determine the relevant voting conditions relating to it. It shall recommend the Member States to adopt that decision in accordance with their respective constitutional requirements.

TITLE7 FINAL PROVISIONS

ARTICLE L The provisions of the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community concerning the powers of the Court of Justice of the European Communities and the exercise of those powers shall apply only to the following provisions of this Treaty: (a) provisions amending the Treaty establishing the European Economic Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community; (b) the third subparagraph of Article K.3(2)(c); (c) articles L to S.

ARTICLE M Subject to the provisions amending the Treaty establishing the European Economic Community with a view to establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community, and to these final provisions, nothing in this Treaty shall effect the Treaties establishing the European Communities or the subsequent Treaties and Acts modifying or supplementing them.

ARTICLE N 1. The government of any Member State or the Commission may submit to the Council proposals for the amendment of the Treaties on which the Union is founded. If the Council, after consulting the European Parliament and, where appropriate, the Commission, delivers an opinion in favour of calling a conference of representatives of the governments of the Member States, the conference shall be convened by the President of the Council for the purpose of determining by common accord the amendments to be made to those Treaties. The European Central Bank shall also be consulted in the case of institutional changes in the monetary area. The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutional requirements. 2. A conference of representatives of the governments of the Member States shall be convened in 1996 to examine those provisions of this Treaty for which revision is provided, in accordance with the objectives set out in Articles A and B.

ARTICLE O Any European State may apply to become a Member of the Union. It shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the assent of the European Parliament, which shall act by an absolute majority of its component members. The conditions of admission and the adjustments to the Treaties on which the Union is founded which such admission entails shall be the subject of an agreement between the Member States and the applicant State. This agreement shall be submitted for ratification by all the contracting States in accordance with their respective constitutional requirements.

ARTICLE P 1. Articles 2 to 7 and 10 to 19 of the Treaty establishing a single Council and a single Commission of the European Communities, signed in Brussels on 8 April 1965, are hereby repealed. 2. Article 2, Article 3(2) and Title III of the Single European Act signed in Luxembourg on 17 February 1986 and in the Hague on February 1986 are hereby repealed.

ARTICLE Q This Treaty is concluded for an unlimited period.

ARTICLE R 1. This Treaty shall be ratified by the High Contracting Parties in accordance with their respective constitutional requirements. The instruments of ratification shall be deposited with the government of the Italian Republic. 2. This Treaty shall enter into force on 1 January 1993, provided that all the instruments of ratification have been deposited, or, failing that, on the first day of the month following the deposit of the instrument of ratification by the last signatory State to take this step.

ARTICLE S This Treaty, drawn up in a single original in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Portuguese and Spanish languages, the texts in each of these languages being equally authentic, shall be deposited in the archives of the government of the Italian Republic, which will transmit a certified copy to each of the governments of the other signatory States.

IN WITNESS WHEREOF, the undersigned Plenipotentiaries have signed this Treaty. Done at Maastricht on the seventh day of February one thousand nine hundred and ninety two [ here follow the signatures ]

PROTOCOL ON THE ACQUISITION OF PROPERTY IN DENMARK THE HIGH CONTRACTING PARTIES, DESIRING to settle certain particular problems relating to Denmark, HAVING AGREED UPON the following provision, which shall be annexed to the Treaty establishing the European Community: Notwithstanding the provisions of this Treaty, Denmark may maintain the existing legislation on the acquisition of second homes.

PROTOCOL CONCERNING ARTICLE 119 OF THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY THE HIGH CONTRACTING PARTIES, HAVE AGREED UPON the following provision, which shall be annexed to the treaty establishing the European Community: For the purposes of Article 119 of this Treaty, benefits under occupational social security schemes shall not be considered as remuneration if an in so far as they are attributable to periods of employment prior to 17 May 1990, except in the case of workers or those claiming under them who have before that date initiated legal proceedings or introduced an equivalent claim under the applicable national law.

PROTOCOL ON THE STATUTE OF THE EUROPEAN SYSTEM OF CENTRAL BANKS AND OF THE EUROPEAN CENTRAL BANK THE HIGH CONTRACTING PARTIES, DESIRING to lay down the Statute of the European System of Central Banks and of the European Central Bank provided for in Article 4a of the Treaty establishing the European Community. HAVE AGREED upon the following provisions, which shall be annexed to the treaty establishing the European Community: