Why did the European Union experience a stark variation in the level of conflict between the late 1970s, when budgetary disputes dominated European politics, and the 1990s, when actors were able to settle upon budgetary agreements without major conflict? I argued that the problematic institutional design of the 1970 budget treaty was the primary contributing factor to high levels of conflict in the 1970s and 1980s. The treaty provisions, which gave the Community its ‘own-resources’ and a largely supranational budgetary procedure, were particularly problematic with respect to the exclusion of distributive and institutional interests of new member states and the EP. In addition, the scope of interpretation allowed the actors to challenge the dominant interpretation of the treaty provisions. In addressing these problems, a far-reaching reform in 1988 induced a sudden reduction in the level of conflict. It supplemented the treaty with an institutional framework for multi-annual budget plans, as well as clear rules for the budgetary procedure. The two pillars of this reform, the financial perspective and the interinstitutional agreement, were successfully renewed twice; in 1992/93 and 1999.