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FINANCIAL PROTOCOL

BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND GREECE

HIS MAJESTY THE KING OF THE BELGIANS ,

HER MAJESTY THE QUEEN OF DENMARK ,

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY ,

THE PRESIDENT OF THE FRENCH REPUBLIC ,

THE PRESIDENT OF IRELAND ,

THE PRESIDENT OF THE ITALIAN REPUBLIC ,

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG ,

HER MAJESTY THE QUEEN OF THE NETHERLANDS ,

HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN , AND NORTHERN IRELAND ,

AND ,

THE COUNCIL OF THE EUROPEAN COMMUNITIES ,

OF THE ONE PART ,

THE PRESIDENT OF THE HELLENIC REPUBLIC ,

OF THE OTHER PART ,

CONSCIOUS OF THE NEED TO PROMOTE THE ACCELERATED DEVELOPMENT OF THE GREEK ECONOMY WITH A VIEW TO FACILITATING THE PURSUIT OF THE OBJECTIVES OF THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND GREECE ,

HAVE DESIGNATED AS THEIR PLENIPOTENTIARIES :

HIS MAJESTY THE KING OF THE BELGIANS :

HER MAJESTY THE QUEEN OF DENMARK :

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY :

THE PRESIDENT OF THE FRENCH REPUBLIC :

THE PRESIDENT OF IRELAND :

THE PRESIDENT OF THE ITALIAN REPUBLIC :

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG :

HER MAJESTY THE QUEEN OF THE NETHERLANDS :

HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND :

THE COUNCIL OF THE EUROPEAN COMMUNITES :

THE PRESIDENT OF THE HELLENIC REPUBLIC :

WHO , HAVING EXCHANGED THEIR FULL POWERS , FOUND IN GOOD AND DUE FORM ,

HAVE AGREED AS FOLLOWS :

ARTICLE 1

WITHIN THE FRAMEWORK OF THE ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND GREECE , THE COMMUNITY SHALL PARTICIPATE ON THE TERMS SET OUT IN THIS PROTOCOL IN MEASURES DESIGNED TO PROMOTE , BY EFFORTS ADDITIONAL TO THOSE MADE BY GREECE ITSELF , THE ACCELERATED DEVELOPMENT OF THE GREEK ECONOMY AND THE COMPLEMENTARITY OF GREEK AGRICULTURE WITH THAT OF THE COMMUNITY .

ARTICLE 2

1 . FOR THE PURPOSES SPECIFIED IN ARTICLE 1 , AND FOR A PERIOD EXPIRING ON 31 OCTOBER 1981 , AN AGGREGATE AMOUNT OF 280 MILLION EUROPEAN UNITS OF ACCOUNT ( EUA ) MAY BE COMMITTED AS FOLLOWS :

( A ) 225 MILLION EUA IN THE FORM OF LOANS FROM THE EUROPEAN INVESTMENT BANK , HEREINAFTER CALLED " THE BANK " , GRANTED FROM ITS OWN RESOURCES ON THE TERMS SET OUT IN ITS STATUTE ;

( B ) 45 MILLION EUA IN THE FORM OF GRANTS ;

( C ) 10 MILLION EUA IN THE FORM OF LOANS ON SPECIAL TERMS GRANTED BY THE BANK ACTING ON INSTRUCTIONS FROM THE COMMUNITY .

2 . OF THE LOANS REFERRED TO IN PARAGRAPH 1 ( A ) , THE INTEREST RATES FOR A MAXIMUM AMOUNT OF 150 MILLION EUA SHALL BE SUBSIDIZED AT 3 % PER ANNUM , FINANCED BY MEANS OF FUNDS INDICATED IN PARAGRAPH 1 ( B ) , ON THE UNDERSTANDING THAT THE COST TO THE COMMUNITY OF FINANCING SUCH SUBSIDIES MAY NOT EXCEED 30 MILLION EUA .

3 . PROJECTS SHALL BE ELIGIBLE FOR FINANCING BY MEANS OF THE LOANS REFERRED TO IN PARAGRAPH 1 ( A ) IF THEY HAVE BEEN SUBMITTED TO THE BANK BY THE GREEK STATE OR , WITH THE LATTER'S AGREEMENT , BY PUBLIC OR PRIVATE UNDERTAKINGS HAVING THEIR SEAT OR A PLACE OF BUSINESS IN GREECE , AND WHICH :

( A ) FURTHER THE REALIZATION OF THE OBJECTIVES OF THE ASSOCIATION AGREEMENT ; AND

( B ) HELP TO INCREASE PRODUCTIVITY AND TO DIVERSIFY THE GREEK ECONOMY , AND PROMOTE , IN PARTICULAR , THE IMPROVEMENT OF THE ECONOMIC INFRASTRUCTURE OF THE COUNTRY AND THE MODERNIZATION OF ITS AGRICULTURE , WHILE TAKING INTO ACCOUNT THE OBJECTIVE OF PROMOTING THE COMPLEMENTARITY OF GREEK AGRICULTURE WITH THAT OF THE COMMUNITY .

4 . EXAMINATION OF THE ELIGIBILITY OF PROJECTS AND THE GRANTING OF THE LOANS REFERRED TO IN PARAGRAPH 1 ( A ) SHALL BE UNDERTAKEN IN ACCORDANCE WITH THE DETAILED RULES , CONDITIONS AND PROCEDURES LAID DOWN BY THE BANK'S STATUTE .

THE CONDITIONS GOVERNING AMORTIZATION OF EACH LOAN SHALL BE ESTABLISHED ON THE BASIS OF THE ECONOMIC AND FINANCIAL CHARACTERISTICS OF THE PROJECT TO BE FINANCED .

5 . THE LOANS REFERRED TO IN PARAGRAPH 1 ( A ) SHALL CARRY THE SAME RATE OF INTEREST AS THAT APPLIED BY THE BANK ON THE DAY OF SIGNATURE OF THE LOAN AGREEMENT . HOWEVER , PRIORITY IN GRANTING LOANS RECEIVING THE INTEREST RATE SUBSIDY OF 3 % REFERRED TO IN PARAGRAPH 2 SHALL BE GIVEN TO ECONOMIC INFRASTRUCTURE OR AGRICULTURAL DEVELOPMENT PROJECTS , AND TO THE FINANCING OF INDUSTRIAL PROJECTS FOR SMALL AND MEDIUM-SIZED UNDERTAKINGS THROUGH THE INTERMEDIARY OF GREEK DEVELOPMENT INSTITUTIONS .

THE LIST OF SECTORS MAY BE REVISED BY AGREEMENT BETWEEN THE COMMUNITY AND GREECE .

6 . THE NON-RETURNABLE GRANTS PROVIDED FOR IN PARAGRAPH 1 ( B ) ARE INTENDED , IN ADDITION TO THE FINANCING OF THE INTEREST RATE SUBSIDY ON LOANS FROM THE BANK , FOR TECHNICAL COOPERATION PROJECTS , STUDY PROJECTS , AND PROJECTS FOR MODERNIZING GREEK AGRICULTURE .

REQUESTS FOR THE FINANCING OF SUCH PROJECTS SHALL BE ADDRESSED BY THE GREEK GOVERNMENT TO THE COMMUNITY .

7 . THE LOANS REFERRED TO IN PARAGRAPH 1 ( C ) SHALL BE GRANTED FOR A PERIOD OF 30 YEARS , HAVE A DEFERMENT OF AMORTIZATION OF EIGHT YEARS AND BE SUBJECT TO INTEREST AT AN ANNUAL RATE OF 2,5 % . INVESTMENT PROJECTS SUBMITTED TO THE BANK BY THE GREEK STATE AND AIMED AT MODERNIZING GREEK AGRICULTURE SHALL BE ELIGIBLE FOR FINANCING BY MEANS OF THESE LOANS . LOANS IN THIS CATEGORY MAY BE COMBINED WITH THE LOANS FROM THE BANK WHICH ARE REFERRED TO IN PARAGRAPH 1 ( A ) .

ARTICLE 3

1 . THE AMOUNTS TO BE COMMITTED EACH YEAR SHALL BE DISTRIBUTED AS EVENLY AS POSSIBLE THROUGHOUT THE PERIOD OF APPLICATION OF THIS PROTOCOL . DURING THE INITIAL PERIOD OF APPLICATION , HOWEVER , A PROPORTIONATELY HIGHER AMOUNT MAY , WITHIN REASONABLE LIMITS , BE COMMITTED .

2 . ANY FUNDS NOT COMMITTED MAY , BY THE END OF THE PERIOD REFERRED TO IN ARTICLE 2 ( 1 ) , BE USED UNTIL EXHAUSTED . IN THAT CASE , THE FUNDS SHALL BE USED IN ACCORDANCE WITH THE SAME ARRANGEMENTS AS PROVIDED FOR IN THIS PROTOCOL .

ARTICLE 4

AID FROM THE BANK FOR THE EXECUTION OF PROJECTS MAY , WITH THE AGREEMENT OF GREECE , TAKE THE FORM OF COFINANCING .

ARTICLE 5

THE EXECUTION , MANAGEMENT AND MAINTENANCE OF SCHEMES WHICH ARE THE SUBJECT OF FINANCING UNDER THIS PROTOCOL SHALL BE THE RESPONSIBILITY OF GREECE OR OF THE OTHER BENEFICIARIES REFERRED TO IN ARTICLE 2 .

THE COMMUNITY SHALL ENSURE THAT ITS FINANCIAL AID IS EXPENDED IN ACCORDANCE WITH THE AGREED ALLOCATIONS AND TO THE BEST ECONOMIC ADVANTAGE .

ARTICLE 6

GREECE SHALL APPLY TO CONTRACTS AWARDED FOR THE EXECUTION OF PROJECTS FINANCED UNDER THIS PROTOCOL FISCAL AND CUSTOMS ARRANGEMENTS AT LEAST AS FAVOURABLE AS THOSE APPLIED IN RESPECT OF OTHER INTERNATIONAL ORGANIZATIONS .

GREECE SHALL TAKE THE NECESSARY MEASURES TO ENSURE THAT INTEREST AND ALL OTHER PAYMENTS DUE TO THE BANK IN RESPECT OF LOANS ACCORDED UNDER THIS PROTOCOL ARE EXEMPTED FROM ANY NATIONAL OR LOCAL TAXES OR LEVIES .

FOR THE MEASURES REFERRED TO IN ARTICLE 2 ( 6 ) AND ( 7 ) , PARTICIPATION IN TENDERING PROCEDURES AND OTHER PROCEDURES FOR THE AWARD OF CONTRACTS SHALL BE OPEN , ON EQUAL TERMS , TO ALL NATURAL OR LEGAL PERSONS OF THE MEMBER STATES AND OF GREECE . HOWEVER , FOR PROJECTS OF A SCALE SUFFICIENTLY LIMITED SO THAT IN PRACTICE THEY ARE OF INTEREST SOLELY TO GREEK UNDERTAKINGS , AN ACCELERATED TENDERING PROCEDURE INVOLVING A SHORTER PERIOD FOR THE SUBMISSION OF TENDERS FOR THE PLACING OF BIDS MAY BE ORGANIZED AFTER APPROVAL BY THE APPROPRIATE COMMUNITY BODY .

ARTICLE 7

THE LOANS MAY BE USED TO COVER EXPENDITURE ON IMPORTS OR THE DOMESTIC EXPENDITURE REQUIRED FOR CARRYING OUT APPROVED CAPITAL PROJECTS , INCLUDING EXPENDITURE ON PLANNING , ON THE SERVICES OF CONSULTING ENGINEERS AND ON TECHNICAL ASSISTANCE .

ARTICLE 8

WHERE A LOAN IS ACCORDED TO A BENEFICIARY OTHER THAN THE GREEK STATE , THE PROVISION OF A GUARANTEE BY THE LATTER MAY BE REQUIRED BY THE BANK AS A CONDITION OF THE GRANT OF THE LOAN .

ARTICLE 9

THROUGHOUT THE DURATION OF THE LOANS ACCORDED PURSUANT TO THIS PROTOCOL , GREECE SHALL UNDERTAKE TO MAKE AVAILABLE TO DEBTORS ENJOYING SUCH LOANS OR TO THE GUARANTORS OF THE LOANS THE FOREIGN CURRENCY NECESSARY FOR THE PAYMENT OF INTEREST , COMMISSION AND OTHER CHARGES AND FOR THE REPAYMENT OF CAPITAL .

ARTICLE 10

THE RESULTS OF FINANCIAL COOPERATION MAY BE EXAMINED WITHIN THE ASSOCIATION COUNCIL .

ARTICLE 11

THE DECLARATION AND THE EXCHANGE OF LETTERS ANNEXED TO THIS PROTOCOL SHALL FORM AN INTEGRAL PART THEREOF .

ARTICLE 12

THIS PROTOCOL SHALL BE ANNEXED TO THE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND GREECE .

ARTICLE 13

1 . THIS PROTOCOL SHALL BE SUBJECT TO RATIFICATION , ACCEPTANCE OR APPROVAL IN ACCORDANCE WITH THE CONTRACTING PARTIES' OWN PROCEDURES ; THE CONTRACTING PARTIES SHALL NOTIFY EACH OTHER THAT THE PROCEDURES NECESSARY TO THIS END HAVE BEEN COMPLETED .

2 . THIS PROTOCOL SHALL ENTER INTO FORCE ON THE FIRST DAY OF THE MONTH FOLLOWING THE DATE ON WHICH THE NOTIFICATIONS PROVIDED FOR IN PARAGRAPH 1 HAVE BEEN GIVEN .

ARTICLE 14

THIS PROTOCOL IS DRAWN UP IN TWO COPIES IN THE DANISH , DUTCH , ENGLISH , FRENCH , GERMAN , ITALIAN AND GREEK LANGUAGES , EACH OF THESE TEXTS BEING EQUALLY AUTHENTIC .

ANNEX

DECLARATION OF THE EUROPEAN ECONOMIC COMMUNITY ON ARTICLE 2 OF THE FINANCIAL PROTOCOL

1 . THE EUROPEAN UNIT OF ACCOUNT USED TO EXPRESS THE AMOUNTS SPECIFIED IN ARTICLE 2 OF THE FINANCIAL PROTOCOL IS DEFINED AS THE SUM OF THE FOLLOWING AMOUNTS IN THE CURRENCIES OF THE MEMBER STATES OF THE COMMUNITY :

GERMAN MARK : 0,828

POUND STERLING : 0,0885

FRENCH FRANC : 1,15

ITALIAN LIRA : 109

DUTCH GUILDER : 0,286

BELGIAN FRANC : 3,66

LUXEMBOURG FRANC : 0,14

DANISH KRONER : 0,217

IRISH POUND : 0,00759

2 . THE VALUE OF THE EUROPEAN UNIT OF ACCOUNT IN ANY GIVEN CURRENCY IS EQUAL TO THE SUM OF THE EQUIVALENT IN THAT CURRENCY OF THE AMOUNTS OF CURRENCY LISTED IN PARAGRAPH 1 . IT IS CALCULATED BY THE COMMISSION USING DAILY MARKET EXCHANGE RATES .

THE DAILY RATES OF EXCHANGE IN THE VARIOUS NATIONAL CURRENCIES ARE PUBLISHED IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES .

EXCHANGE OF LETTERS

A . LETTER FROM THE CHAIRMAN OF THE COMMUNITY DELEGATION

SIR ,

I HAVE THE HONOUR TO INFORM YOU THAT THE COMMUNITY CONSIDERS THAT THE PROBLEM OF THE CONSEQUENCES OF THE POSSIBLE ACCESSION OF GREECE TO THE COMMUNITY FOR THE PROVISIONS OF THE SECOND EEC-GREECE FINANCIAL PROTOCOL SHOULD BE DEALT WITH IN THE FRAMEWORK OF THE ACCESSION NEGOTIATIONS . IN THIS RESPECT , I MUST REMIND YOU OF THE GENERAL PRINCIPLE WHEREBY NO FURTHER FINANCIAL COMMITMENTS UNDER THE PROTOCOL MAY BE UNDERTAKEN FROM THE DATE OF THE ENTRY INTO FORCE OF THE ACCESSION TREATY .

THE ACCESSION NEGOTIATIONS MUST THEREFORE INCLUDE DETAILED RULES TO ENSURE A HARMONIOUS TRANSITION , AS REGARDS FINANCIAL AID , FROM THE REGIME OF AN ASSOCIATED COUNTRY TO THAT OF A MEMBER STATE WITH ACCESS , UNDER THE USUAL CONDITIONS , TO THE VARIOUS COMMUNITY FUNDS AND FINANCIAL INSTRUMENTS .

I SHOULD BE GRATEFUL IF YOU WOULD ACKNOWLEDGE RECEIPT OF THIS LETTER .

PLEASE ACCEPT , SIR , THE ASSURANCE OF MY HIGHEST CONSIDERATION .

CHAIRMAN OF THE COMMUNITY DELEGATION

B . LETTER FROM THE CHAIRMAN OF THE GREEK DELEGATION

SIR ,

I HAVE THE HONOUR TO ACKNOWLEDGE RECEIPT OF YOUR LETTER OF TODAY'S DATE IN WHICH YOU INFORMED ME OF THE FOLLOWING :

" I HAVE THE HONOUR TO INFORM YOU THAT THE COMMUNITY CONSIDERS THAT THE PROBLEM OF THE CONSEQUENCES OF THE POSSIBLE ACCESSION OF GREECE TO THE COMMUNITY FOR THE PROVISIONS OF THE SECOND EEC-GREECE FINANCIAL PROTOCOL SHOULD BE DEALT WITH IN THE FRAMEWORK OF THE ACCESSION NEGOTIATIONS . IN THIS RESPECT , I MUST REMIND YOU OF THE GENERAL PRINCIPLE WHEREBY NO FURTHER FINANCIAL COMMITMENTS UNDER THE PROTOCOL MAY BE UNDERTAKEN FROM THE DATE OF THE ENTRY FORCE OF THE ACCESSION TREATY .

THE ACCESSION NEGOTIATIONS MUST THEREFORE INCLUDE DETAILED RULES TO ENSURE A HARMONIOUS TRANSITION , AS REGARDS FINANCIAL AID , FROM THE REGIME OF AN ASSOCIATED COUNTRY TO THAT OF A MEMBER STATE WITH ACCESS , UNDER THE USUAL CONDITIONS , TO THE VARIOUS COMMUNITY FUNDS AND FINANCIAL INSTRUMENTS .

I SHOULD BE GRATEFUL IF YOU WOULD ACKNOWLEDGE RECEIPT OF THIS LETTER . "

PLEASE ACCEPT , SIR , THE ASSURANCE OF MY HIGHEST CONSIDERATION .

CHAIRMAN OF THE GREEK DELEGATION

INFORMATION ON THE DATE OF ENTRY INTO FORCE OF THE FINANCIAL PROTOCOL BETWEEN THE EEC AND GREECE , SIGNED IN BRUSSELS ON 28 FEBRUARY 1977

THE CONTRACTING PARTIES HAVING NOTIFIED ONE ANOTHER ON 26 JULY 1978 THAT THE PROCEDURES NECESSARY FOR THE RATIFICATION , ACCEPTANCE OR APPROVAL OF THE FINANCIAL PROTOCOL HAD BEEN COMPLETED , THE PROTOCOL WILL ENTER INTO FORCE , IN ACCORDANCE WITH ARTICLE 13 ( 2 ) , ON 1 AUGUST 1978 .