Mr President, Commissioner, ladies and gentlemen, the report I am presenting to you arises from Council Regulation 1969/88, which established a facility providing medium-term financial assistance for Member States’ balances of payments. Article 119 of the Treaty provides that where a Member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments, the Council shall grant ‘mutual assistance’ so that the functioning of the common market is not jeopardised. That mechanism can be activated by the Council following an initiative from the Member State which is in difficulty or following an initiative from the Commission. At least in its intended form, the mechanism should be distinguished above all by rapidity of intervention and, in response to the loan received, by the adoption of all appropriate economic measures for re-establishing a sustainable balance of payments position. Since it came into force – on 25 June 1988 – the facility has not been activated much. It has only been used twice, in 1991 for the grant of a EUR 2.2 billion loan, of which only one billion was released, and in 1993 for the sum of EUR 8 billion, of which only the first tranches were released. It immediately seems clear that many European facilities offered to the Member States are not fully taken up; the failure on the part of some Member States to make use of the Structural Funds also comes to mind. Perhaps there ought to be superior delivery of information to encourage the members to make better use of the opportunities available. Coming back to the report, I should mention that, as a result of the conclusions adopted by the Economic and Financial Committee on 13 October 1997 and pursuant to Article 12 of the regulation in force, the Commission submitted a report to the Council and Parliament advocating retention of the facility. That position can be ascribed to the fact that, while only countries with derogations can use the facility, with enlargement the eventuality could arise repeatedly. To be on the safe side, it was decided to reduce the ceiling from EUR 16 billion to EUR 12 billion – Amendment No 2, Recital 8; the Council shall adopt the decisions after consulting the European Parliament – Amendment No 3, Article 9; and shall examine whether the facility is adequate every two years, not three – Amendment No 4, Article 11. Subsequent amendment, including altering the ceiling, is therefore still possible. We also support the Committee on Budget’s amendment – Amendment 1, Recital 6a (new) – on the establishment of a mechanism to protect the Community budget from any potential risks of default and corresponding call on the guarantee. We actually think that possibility is rather remote. With enlargement the new countries joining have made significant efforts to put their accounts and balances of payments in order. The Community budget is protected as regards loans granted to third countries by the Guarantee Fund Mechanism. An analogous system could be considered, though with a smaller financial commitment, in the case of finance for countries with derogations. In conclusion: first, the loans are directly guaranteed 100 percent from the Community budget; second, the risk of default, which can never be ruled out, is covered by an adequate protection mechanism; third, the instrument is likely to be better and more widely used at the stage of European enlargement; fourth and last, the management of the loans is entrusted to the ECB, replacing the Commission which was previously responsible for this.

Political group: PPE-DE