In the previous two chapters, I concentrated on conflict between the EP and the Council within the annual budgetary procedure. I discussed tensions between member states, insofar as they had a significant impact on the Council’s ability to participate in annual decision-making. I will now focus on conflict among member states outside the annual budgetary procedure, because much of the conflict between governments in budgetary politics took place in the intergovernmental setting. It concerned questions of financial reform and went beyond issues of annual budgeting. Conflict outside the annual budgetary procedure (in the intergovernmental setting) and conflict within the annual budgetary procedure are two complementary types of budgetary conflict at the European level. The following two chapters will assess the extent to which the impact of institutional change on the level of conflict outside the annual procedure was similar to the conflict-reducing effect of the 1988 reform on the level of conflict within the annual budgetary procedure. Thereby, this chapter centres on budgetary decision-making in the intergovernmental setting in the 1970s and the early 1980s, while the next chapter concentrates on the late 1980s and the 1990s.