COUNCIL RESOLUTION of 17 December 1973 on measures to be taken against rising prices and the maintenance of a high level of employment in the Community

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

Having regard to the draft resolution presented by the Commission;

Whereas at its meeting on 9 November 1973, the Council decided to adopt further measures to be taken against inflation in the coming months;

Whereas the rise in prices of raw materials and in particular of petroleum products, together with problems of supply, is liable to aggravate the inflationary trends in the Community in 1974;

Whereas persistent inflation impairs the competitiveness of the economies of the Member States and threatens the level of employment,

ADOPTS THIS RESOLUTION:

I

In order to combat inflation, and to ensure that the conditions essential for a high level of employment are maintained, the Council agrees that the Member States and the Community should adopt immediately and in parallel the appropriate measures to implement, in the early months of 1974, a vigorous campaign to reduce the rise in costs and prices.

II

As regards budgetary expenditure, the Member States will:

- in the first quarter, curb as strictly as possible increases in current expenditure, in particular by holding back purchases of goods and services and postponing eventual increases in the number of civil servants and employees in the public sector;

- review subsidies to business and trade;

- adjust, where appropriate, the commitments of public investment expenditure in relation to available capacities - particularly in the building and construction industry.

As regards tax receipts, the Member States will refrain from further adjustments to the tax system which are likely to increase the growth of total demand in the first quarter ; if possible, they will accelerate the collection of taxes.

In the Member States in which the central government budget shows a deficit, the governments will endeavour to finance the deficit by increased use of medium and long-term borrowing.

The Member States will ensure that the finances of local authorities, and, where appropriate, of public undertakings and social security agencies, are managed in such a way as to contribute to the fight against inflation.

III

The Member States will maintain a monetary policy which will contribute towards curbing rising prices in the Community. To this end, they will work out concerted action particularly in the field of interest rates.

According to the possibilities open to them, they will have recourse to one or more of the following methods of action:

- quantitative control of monetary aggregates, particularly the volume of credit;

- seeking greater selectivity in the granting of bank credit to productive investment, particularly in the energy sector, and at the expense of credit likely to stimulate consumption;

- non-compensation for the contraction of internal liquidity caused by foreign currency sales by the monetary authorities;

- encouraging savings through adjustments of the structure of interest rates;

IV

As regards prices, the Member States will have recourse to one or more of the following methods of action:

- strict surveillance of the conditions in which prices are fixed for goods and services, and possibly limiting profit margins;

- prior notification of price increases;

- strict and even strengthened application of regulations on the posting and disclosure of prices, both for goods and for services;

- freezing of rates and dues charged by the public services during the first quarter of 1974 at the level of 1 December 1973;

- strict or strengthened application of national provisions for the control of abuses resulting from a dominant position on the market;

- launching of an information campaign on prices of consumer products where appropriate with the aid of consumers associations. They will use ail appropriate means of information.

The Council invites the Member States and the Commission to organize as soon as possible regular exchanges of necessary and specific information on price movements and comparisons in the member countries.

Member States will aid the Commission in the economic and commercial research required for the systematic application of Article 86 of the EEC Treaty.

V

The success of the measures against inflation depends considerably upon the attitudes of the different economic and social groups. The Council invites them to contribute to its success by considerably moderating their attitude to incomes (industrial and commercial profits, wages, incomes of suppliers of services and farmers, dividends and rents). Member States will, according to the means available to them, take all the necessary measures to achieve this result without delay.

VI

The Council is of the opinion that the mechanisms of the common agricultural policy, and in particular of the export measures, helps to shield the consumer from appreciable price rises on the world market in respect of a large number of products, particularly for cereals, (including rice) and sugar.

The Council supports the Commission's intention to submit proposals fixing prices for the 1974/75 marketing year which will be compatible with the general policy of the Community in measures against inflation. The Council will ensure that this requirement of compatibility is met.

VII

The Member States will review the quantitative restrictions now applied to imports of certain products from third countries with a view to their relaxation, thereby increasing supplies of those products. The Council hopes that any consultations opened pursuant to the Council Decision of 19 December 1972 (1) laying down certain transitional measures for the progressive standardization of import terms of Member States as regards third countries will be conducted as quickly as possible. The Member States will facilitate the widest possible utilization of quotas during the first half of 1974.

Before 31 December 1973, the Council will rule on the proposals which have been made by the Commission with regard to the implementation, for 1974, of generalized tariff preferences in favour of the developing countries.

VIII

The Council will examine the results of this programme of action at the latest at its meeting for the review of the economic situation in the Community which is scheduled for March 1974. (1)OJ No L 299, 31.12.1972, p. 46.

Composition of the Scientific and Technical Committee

By a decision of 15 October 1973 the Council of the European Communities appointed the following as members of the Scientific and Technical Committee of the European Atomic Energy Community for the period from 1 April 1973 to 31 March 1978:

Prof. Arnaldo Maria Angelini

Mr Jean-Jacques Baron

Mr Richard Baumgartner

Prof. D. Phil. Adolf Birkhofer

Ing. Giulio Cesoni

Prof. Ezio Clementel

Mr Alexis Dejou

Prof. P. De Meester

Mr F.W. Fenning

Mr J. Goens

Prof. W.B. Hall, MSc MIMechE

Dr. rer. nat. Rudolf Harde

Dr. L.C.W. Hobbis

Mr Jules Horowitz

Prof. Dr. phil. H. Højgaard Jensen

Dr. ing. Klaus Knizia

Prof. Raymond Latarjet

Prof. Ir.D.G.H. Latzko

Prof. D.C. Leslie, MA D. Phil

Ir.A. Meijer

Prof. Dr. rer. nat. Dr. med. Erik Oberhausen

Prof. Cormac O'Ceallaigh

Mr R.A. Peddie, BSc (Eng) CEng FIMechE FIEE MInstF

Prof. Gian Piero Puppi

Ing. Ambrogio Puri

Prof. Dr. rer. nat. Arnulf Schlüter

Mr Henri Wagener

This decision has been made known to those concerned, who have accepted their appointments.