20.12.74 OfficialJournaloftheEuropeanCommunities NoL341/51
II
(Actswhosepublicationisnotobligatory)
COUNCIL
COUNCIL DIRECTIVE
of17December 1974
grantingmedium-term financialassistancetotheItalianRepublic
(74/637/EEC)
Whereas,pursuanttoArticle3ofDecisionNo
71/143/EEC,itisnecessarytodeterminethe
economicpolicyundertakings tobegivenbythe
recipientMemberState,tocomprisebothimmediate
stabilizationmeasuresrelatingespeciallytocredit
policyandpublicexpenditure ,andalsomedium-term
measures;whereasthenatureofsuchmeasureshas
beendiscussedindetailintheMonetaryCommittee ;
Whereasthemainobjectiveofthesemeasuresmust
betoenabletheItalianRepublictoachieve,in1975,
asurplusofatleastUS$1000milliononitstrade
balance,leavingasidenetimportsofpetroleum
products;
WhereastheUnitedKingdomhasdeclaredthatits
presentandforeseeablebalanceofpaymentsdiffi­
cultiespreventitfromcontributingtowardsfinancing
theassistancetotheItalianRepublic;whereasthe
UnitedKingdomhasdeclaredthatitisnevertheless
readytocontinuerenewablecreditsinfavourofthe
Bancad'ltaliaofthesameamountasthosewhichit
grantedwithinthesystemofshort-termmonetary
support,THECOUNCILOFTHEEUROPEAN
COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
EconomicCommunity ,andinparticularArticle
108(2)thereof;
Havingregardtotherecommendation submittedby
theCommission ,followingconsultationoftheMone­
taryCommittee ;
WhereasCouncilDecisionNo71/143/EECof22
March1971settingupmachineryformedium-term
financialassistance,laysdownthatuptotheceilings
specifiedinthatDecision,MemberStatesshould
makeavailablemedium-term creditsintheformof
mutualassistancetoaMemberStateindifficultiesor
seriouslythreatenedwithdifficultiesasregardsits
balanceofpayments,withtheCouncildetermining
theeconomicpolicyundertakings therecipient
MemberStateisrequiredtogive;
Whereasintensiveconsultations havebeenheldinthe
MonetaryCommitteetodiscusstheeconomicsitua­
tionoftheItalianRepublic;whereastheseconsulta­
tionshaveshownthatthisMemberStateisfacingreal
balanceofpaymentsdifficultieswhich,ifthey
continue,couldjeopardizetheproperfunctioningof
thecommonmarket;whereas,inviewofthepresent
economicsituationoftheItalianRepublicandthe
stateofitsforeignexchangereserves,medium-term
financialassistanceisaparticularlysuitablemethod
forcounteringthesedifficulties ;HASADOPTEDTHISDIRECTIVE :
Article1
InaccordancewithDecisionNo71/143/EEC,the
ItalianRepublicshallbegivenmedium-term financial
assistanceonthetermssetoutbelow. (')OJNoL73,27.3.1971,p.15.

NoL341/52 OfficialJournaloftheEuropeanCommunities 20.12.74
Article2
Theamountofthefinancialassistanceshallbe
1159-20millionunitsofaccount.
MemberStates'contributions tothisassistanceshall
beasfollows:
millionunitsofaccount2.Therateofincreaseincentralgovernment
expendituremustnotexceed16%inthe1975
calendaryear.Inaddition,thecentralgovernment
shalltakestepstoensurethatotherpublicauthorities
andthe'socialsecurityinstitutionslimitthegrowthof
theirexpenditurein1975toasimilarextent.
3.Thedeficitontreasurytransactionsmustnot
exceedLit8000000millionin1975.Bytreasurytran­
sactionsaremeantthoselistedinAnnex. Germany 403-3
France 403-3
Belgium/Luxembourg 134-4
Netherlands 134-4
Denmark 60-4
Ireland 23-4
Article3
Thefullamountoftheassistanceshallbemadeavail­
abletotheItalianRepublicon18December1974.
Theloanshallberepaidin1978infourquarterly
payments,thefirstfallingdueon18March1978.
TheItalianRepublicmayrepayallorpartoftheloan
inadvance,givingthreemonths'notice.
Article4
TheamountshallbemadeavailabletotheItalian
RepublicinUnitedStatesdollarsattherateof
$1-20635perunitofaccount,applicableforthe
entiredurationoftheassistance .
Theloanshallbegrantedataninterestrateof
7-5625%.Theinterestshallbepayableeverysix
monthsinarrears.Article7
1.Thediscrepancybetweencentralgovernment
currentexpenditureandrevenuemustbegradually
eliminatedoverthenextfiveyearsbymeasurestobe
takenimmediatelybytheItalianauthorities .
Tothisend:
—theexpenditureandnumberofsemi-publicbodies
shallberestricted;
—directtaxationshallbeincreasedandthe
campaignagainsttaxevasionsteppedup;
—specialeffortsshallbemadetoimproveadminis­
trativeorganizationandtopreventthetransferof
powersfromcentralgovernmenttoregional
authoritiesfromleadingtoduplicationoftasks.
2.Overthenextfiveyears,monetaryfinancingof
treasuryrequirementsmustbegraduallyandsubstan­
tiallyreduced.
3.Inpubliccapitalspending,priorityshallbe
giventothedevelopment ofpublictransportand
increaseduseofnationalenergyresources.
4.Savingshallbemadeintheconsumption of
petroleumproductsfordomesticuse.
5.Thecompetentauthoritiesshalltaketheneces­
sarysteps,whereappropriateusingavailableCommu­
nityinstruments ,inparticulartheSocialFund,to
improvetheoperationofrelocationservicesandthe
vocationaltrainingofworkers.
6.Specialeffortsshallbemadetopromoteforeign
investmentinItaly,particularlyintheMezzogiorno .
7.Detailedplansforimplementing themeasures
providedforinthisAricleshallbecommunicated to
theCommissionby30June1975.Article5
Theassistanceshallbegrantedsubjecttothecondi­
tionssetoutinArticles6and7relatingtothe
economicandmonetarypolicymeasurestobetaken
bytheItalianRepublic.
Article6
1.Theincreaseintotallendingmustbekeptbelow
Lit22400000millioninthe12monthsto31March
1975.Fortheperiodfrom1April1975to31March
1976,thisincreasemustnotexceedLit24700000
million.
Bytotallendingismeantthefinancingoftreasury
deficits(excludingfinancialassistancetofinancial
intermediaries ),loansgrantedbyaziendedicredito
(banks)andspecializedfinancialinstitutionsand
bondsissuedbyundertakingsandpublicauthorities
otherthanthetreasury.Article8
Actingonarecommendation fromtheCommission ,
theCouncilshall,by1December1975,adaptforthe
followingyeartheconditionslaiddowninArticle6.

20.12.74 OfficialJournaloftheEuropeanCommunities NoL341/53
Article9
TheCommission ,incollaborationwiththeMonetary
Committee ,shallregularlycheckthattheeconomic
policyconditionslaiddowninArticles6and7are
beingrespected.Forthispurpose,theItalianauthori­
tiesshallcommunicate totheCommission allthe
necessaryinformation .
AsregardsthemeasuresprovidedforinArticle6,
intermediateobjectivesshallbejointlyagreedduring
theyearbytheItalianauthoritiesandtheCommis­
sion.Article10
ThisDirectiveisaddressedtotheMemberStates.
DoneatBrussels,17December1974.
FortheCouncil
ThePresident
M.DURAFOUR
ANNEX
TreasurytransactionsreferredtoinArticle6
1.Budgetaryreceipts
2.Budgetaryexpenditure
Budgetarydeficit(1—2)
4.Extra-budgetary operations :
—asappearinthebalancesheetofthetreasury
—others
5.Overalltreasurycashdeficit(34-4)
6.OperationsoftheCassaDepositiePrestiti(CDP)andautonomouspublicundertakings :
—mainoutgoingsoftheCDP
—netfinancingrequirementofautonomouspublicundertakings
7.Borrowingrequirement (5+6)