ARCHIVES HISTORIQUES 
DE LA COMMISSION 
 
 
 
COLLECTION RELIEE DES 
DOCUMENTS "COM" 
 
 
 
 
COM (84) 701 
 
 
 
Vol. 1984/0 255 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), t his file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 v om 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
COM(84) 701 final  
Brussels, 30 November 1984
EUROPEAN UNION - ANNUAL REPORT BY THE COMMISSION, 1984
(Communication from the Commission to the
European Council , 3 and 4 December 1984)
COM(84) 701 final

Ö0w\
EUROPEAN UNION - ANNUAL REPORT BY THE COMMISSION, 1984
I. INTRODUCTION
1. This annual report is prepared in response to a request made by the  
European Council in 1976. It is also the Commission's contribution  
to the report which the European Council is required to present to  
Parliament "on progress towards European Union" in accordance with  
the solemn declaration on European Union adopted in Stuttgart in  
June 1983.
2. The nature of this report should be clearly understood. The move to
European Union would require changes of a constitutional nature  
since they touch on the way the institutions work and the extension  
of the possible areas of competence. This was manifest in the  
Commission's 1975 report on European Union. It is also a basic
premise of the draft Treaty of Union adopted by Parliament in  
February of this year.However, to aspire to such a qualitative  
charge and to work for it does not diminish in any way the  
importance of the consolidation and development of the existing  
Community. Such effort may indeed prepare the ground for the  
creation of a European Union.
3. The work of consolidation and development of the last twelve months  
has been greater than in previous years. A number of important  
decisions have been reached and initiatives taken. In particular,  
the decisions on reform of the agricultural policy and the budget  
package of Fontainebleau can allow the Community to make a break  
with a querulous past.
4. The Commission wishes to make its views on what has been achieved  
quite plain. Reforms have been started but these will have to be  
consolidated, as is the case with agriculture, or reviewed in the  
near future, as is the case with the budget package. This year's

2.-
decisions can provide us with a breathing space which can be usød  
to carry out more fundamøntaL røforms Løading to thø crøation of a  
European Union. These decisions can also allow another few years of  
prevarication.
5. This report will comment on new initiatives for a European Union,  
the budget decisions and the consolidation and development of the  
existing Community in 1984.
II. FOR A EUROPEAN UNION
6. A major event in 1984 was the adoption by Parliament in February of  
the draft text of a Treaty establishing a European Union. This text  
was the legal "translation" of the political language of the  
resolution approved the previous September. It was approved by a  
massive majority of 237 votes for , with 31 against and 43  
abstentions. Not the least remarkable fact was that a majority of  
MEPs from each country except Denmark approved the text.
7. The draft Treaty has been submitted to national authorities with a
view to their instituting a procedure for approval in accordance  
with their respective constitutional rules. The President in office  
of the European Council, Mr François Mitterrand, suggested in his  
speech to the European Parliament on 24 May 1984, that "preparatory  
talks be started which would lead to a conference of interested  
Member States; the draft for a European Union and the solemn
declaration of Stuttgart would provide the base for such work".
8. A few weeks, later, at Fontainebleau, the European Council decided  
the creation of an ad-hoc committee composed of the personal  
representatives of the heads of state and government. The  
Committee, chaired by Mr Dooge, is asked to make suggestions on the  
improvement of the functioning of European cooperation, in the 
Community area, that of Political Cooperation or others. A report  
of the Committee has been presented to this session of the European

3.-
Council meeting in Dublin. The Commission hopes that the European  
Council will show its intention to make the qualitative move  
towards European Union by instructing the Committee to persue its  
work with a view to suggesting concrete steps in that direction.
9. A second committee "Europe of the citizen" was set up in  
Fontainebleau. As the communique stated "the European Council  
considers that it is indispensable that the Community meets the  
expectations of the peoples of Europe in adopting measures designed  
to strengthen and promote its identity and image amongst its  
citizens and in the world".
10. It is not always easy for the individual citizen to see effects of
the action of the Community. In part, this is because so much that  
has been achieved over the last thirty years is taken for granted. 
What obviously remains to be done is attributed to the failings of  
the Community. Moreover, the fact that most information on the  
Community has a distinct national bias, means that it is
particularly difficult to find objective information on the  
reasons for these failings. The citizen's view of the Community  
may be starting to suffer. This should be a reason for serious  
alarm.
11. A warning was given in the second direct election of the European
Parliament which took place in June where the average
/
participation rate stood two points lower than in 1979.The message  
of the elector was that he won't be keen to vote a third time
unless it is possible to show him that the Community and
Parliament are relevant to his daily life. Nonetheless, given the  
paucity of means available to Parliament to publicise its work and  
its limited range of powers, it is still a considerable
achievement to have brought three out of every five European
citizens to the polling booth. Now more than ever, concrete moves  
towards European Union which have a direct impact on the lives of  
our citizens are needed.

4.-
111.  THE SCOPE OF THE BUDGET-DECISIONS
12. The most important measures agreed in 1984 concern the budget.  
The budget package can usefully be examined in the light of the  
implications of European Union. Its scope is then apparent.
13. The Community needs an expanding policy base if the momentum of  
integration is to be maintained and the critical mass of activity  
reached which would make European Union possible. The existing  
set of policies is insufficient and because of the heavy  
expenditure needed to finance one of them - agriculture - is  
imbalanced as for as its budgetary impact is concerned. However,  
financing a common agricultural policy at European level makes  
sense. Today's Community policy is cheaper for consumer and  
tax-payer than would be separate national policies financed at  
national level. The imbalance is therefore not to be overcome by  
simply limiting agricultural expenditure at European level but  
by transferring those expenditures from national to European  
level which are relevant to European Union. Of course it must be  
pointed out that not all new policies have implications for the  
budget.
14. In the course of the debate on own resources, the Commission had
originally proposed that the right to decid·· the maximum VAT  
call-up rate be transferred from natio to Community
institutions. This would have provided the mmunity. with an
autonomous revenue-raising capacity. The ceiling would be changed  
each time by Council acting unanimously and Parliament with a  
special majority. This change was refused by Member States as was  
the Commission's later proposal of 2 % for a new ceiling. In the  
end the European Council conceded 1,4 %.
15. Today it is already apparent that the expenditure needed to meet  
existing legislative requirements together with the impact of  
enlargement and the workings of the compensation mechanism mean

5.-
that the Community will find itself near to the new upper limit  
soon after its entry into force. There is thus no margin left for  
the development of Community policies. It is difficult to  
reconcile this state of affairs with the commitment of Member  
Stater to European Union.
16. In making these observations the Commission is not suggesting  
that European Union means increasing the burden on the taxpayer.  
The point is that transfer of competences to Community and later  
Union level must lead to transfer of some expenditure. Such  
expenditure in a number of areas may well be lower than it would  
be if individual Member States persued separate nationaL  
policies. European Union should mean reducing the tax burden.
17. At Fontainebleau agreement was finally reached on a mechanism  
designed to deal with the conflict which had lasted several years  
concerning the UK budget contribution. Whilst accepting the need  
for a correction in this specific case, the Commission believes  
that in the context of European Union and an increased budget a  
more generalised approach to the distribution of budget burdens  
would be necessary. Nonetheless, it must be recognised that the  
agreement has put a temporary end to divisions which paralysed  
the Community.
18. The agreement on financial, discipline may also be analysed for
its relevance to European Union. The Commission like any  
responsible public authority is concerned that the tax- payers'  
money be spent effectively and efficiently. The Council has  
committed itself to tightening procedures on budget discipline.  
The Commission regrets that its proposals in this matter have  
not been followed. Both arms of the budgetary authority, Council  
and Parliament, should be involved in fixing spending limits.  
Council in choosing to decide such limits on its own is risking  
opening up an unnecessary institutional battle. The climate of

6.-
conflict will not be conducive to budget discipline. In
forgetting that co-decision means co- responsibility, Council
will weaken the discipline it seeks to promote.
19. Delays in reaching a decision on new own resources mean that in  
1984 and 1985 supplementary budgets will have to be financed  
outside the standard Community budgetary procedure. A part of the  
budget will be financed de facto by decision of the Member States  
alone. Such decisions should constitute exceptions and not pave  
the way for further intergovernmentalisation of Community  
operations.
20. Thus, whereas each element of the budget package may be justified  
on its own merits as an ad hoc measure, the whole is  
unsatisfactory and, at best, provides time for reflection. These  
were not the budgetary decisions of a potential European Union.  
Evidence of a desire to make progress towards European Union was  
found elsewhere - in the work of Parliament and the creation of  
the Dooge Committee.
IV. CONSOLIDATION AND DEVELOPMENT OF EXISTING POLICIES
21. It is fortunate that a number of agreements have indeed been  
reached this year which do have a direct impact on the citizen  
and his rights. More generally, a number of proposals which had  
been in the pipeline and had been blocked for one .reason or  
another, became ripe for decision. Reforms were initiated and  
new programmes launched. As with the budget decisions, they  
attest to a breakthrough but are not sufficient to allow for the  
qualitative jump towards European Union.

Reform of the Common Agricultural Policy
22. The objectives of the Common Agricultural Policy had been reached  
satisfactorily but this had led to a growth in output which  
exceeded demand for a number of products. Reform had started with  
the imposition of guarantee thresholds which represent the  
production level at which the guarantee is or would be limited.  
This year a particularly strict system for the dairy sector has  
been agreed with the introduction of a quota system. The price -  
round decisions for the 1984-5 campaign were more consistent with  
market realities than they had been in previous years. The  
Commission is convinced that such realism is essentiel for the  
maintenance of the CAP and development of European agriculture.
The Structural Funds
23. The Regional Fund is of particular relevance to European,Union as  
both an expression of solidarity and as an instrument to promote  
economic convergence. In June, the Council adopted a new  
regulation reforming the Fund. After its implementation in 1985  
the effectiveness of the regional policy should be considerably  
reinforced, particularly as regards its "communautaire" aspects.
24. The Social Fund had already been reformed in 1983. The third  
structural fund - Agricultural Guidance - is currently being  
reviewed. The Commission is concerned that the action of the  
three funds be more coordinated than in the past. This can be  
done by combining action in the framework of the specific  
vocation of each fund in an integrated programme. Different  
integrated programmes are being developed. In Fontainebleau the  
political decision was taken to lauch the integrated  
mediterranean programmes. They concern the rural areas of the  
mediterranean region and in particular those likely to be  
affected by the third enlargement.

8.-
Economic Convergence
25. The European Monetary System entered its sixth year and has  
continued to play its rôle as the framework for the convergence  
of monetary and economic policies. The EMS operated in a very  
stable environment and no changes in parity were necessary. The  
composition of the ECU was modified in September with the  
inclusion of the Drachma and a general revision of the weights of  
all participating currencies. The Commission has transmitted  
communications to the Council concerning the lessons to be drawn  
from the operation of the EMS proposing a series of improvements  
in its mechanisms, the balance of payments support instruments  
and the role of the ECU in the relaunch of the process of  
financial integration in the Community.
26. During this time the Commission has developed its own  
participation in the private ECU market so as to support and  
encourage the spontaneous development which today is the most 
promising sign of the trend to the affirmation of a European  
monetary identity.
27. The EMS was a powerful motor of convergence of economic policies.
In the Commission's latest report on the economic situation it
was noted that the take-off in economic growth was quite
satisfactory. Nonetheless, the Commission was obliged to remind/
governments that without a change of policy, no reversal of  
trends in the labour market - there are now almost 13 million  
unenployed - could be expected in the next few years.
Internal Market
28. Progress has been made in developing procedures for the  
elimination of technical barriers to the free movement of goods.  
In particular this has been shown in the commitment for a common  
customs document and the development of a capacity for deciding

9.-
norms at European level. Another important step forward was made  
in October with the adoption of the Commission's proposals on  
public markets for telecommunications equipment.
Research and Development of new technolgies
29. In February, after many hesitations, mostly budgetary in origin.  
Council approved the Esprit programme. This showed the readiness  
of the Community to commit itself to the development of the new  
technologies. The approach adopted for Esprit should now be  
applied for other programmes. A first decision on a  
telecommunications programme was taken in October.  The Commission  
hopes that a decision on the four-year research and development  
programme will be fully implemented before the end of the year.  
The content of the programme has already been approved by Council.
Europe without frontiers
30. The Commission had made a series of proposals on the easing of
frontier contracts which were only partially approved by Council  
in June. The Fontainebleau European Council approved the  
Commission's original approach and called for a rapid follow-up of  
the work and "the suppression of all police and customs  
formalities at intracommunity frontiers for the movement of  
persons". ,
31. Council's inability to launch a transport policy despite the  
Treaty requirement had led Parliament to take Council to Court.  
The Court will rule in January. In the meantime a first political  
decision has been reached on a transport policy which should be  
confirmed by the end of the year. For the first time  
appropriations have been entered into the budget to finance  
certain road investments relevant to the free operation of the  
common market.

10.-
V. ENLARGEMENT
32. The negotiations on the enlargement of the Community continued in  
1984. The Fontainebleau agreement on own resources reopened the  
way to a successful conclusion of the negotiations. At the end of  
October the Community, Spain and Portugal officially noted the  
irreversible nature of the enlargement planned for 1st January  
1986. The difficulties still to be overcome, however, are  
considerable.
Vi. EUROPE IN THE WORLD
33. Whereas the internal development of the Community and its  
enlargement have hit notable obstacles, its reputation and  
prestige round the world continued to grow. The traditional  
guidelines have been upheld and in particular the Community acted  
in defence of an open world trade system and stood up to  
protectionist pressures better than most.
34. Despite divergences of interest with our major industrial  
partners, in particular the United States and Japan, we have been  
able to develop and enrichen our relations without any major  
conflicts.
35. Relations with Efta have been strengthened. The objective is the/
creation of a European "industrial zone" and an important step in  
that direction was taken at a ministerial meeting in April.
36. The negotiations for a third Lomé Convention have been brought to  
a successful conclusion. The new Convention reaffirms the  
Community's commitment towards the states of sub-Sahara Africa -  
Angola and Mozambique will join the signatories of the present  
Convention - the Caribbean and the Pacific.

11.-
The Community, b,a.s, paid particular attention to our relations with  
Latin America, Efforts were crowned with the recent ministerial  
meeting in San José, Costa Rica, with the commitment of Member  
States to increase aid in favour of Central America.

7.-
Reform of the Common Agricultural Policy
22. The objectives of the Common Agricultural Policy had been reached  
satisfactorily but this had led to a growth in output which 
exceeded demand for a number of products. Reform had started with  
the imposition of guarantee thresholds which represent the  
production level at which the guarantee is or would be limited.  
This year a particularly strict system for the dairy sector has  
been agreed with the introduction of a quota system. The price -  
round decisions for the 1984-5 campaign were more consistent with  
market realities than they had been in previous years. The  
Commission is convinced that such realism is essentiel for the  
maintenance of the CAP and development of European agriculture.
The Structural Funds
23. The Regional Fund is of particular relevance to European .Union as  
both an expression of solidarity and as an instrument to promote  
economic convergence. In June, the Council adopted a new  
regulation reforming the Fund. After its implementation in 1985  
the effectiveness of the regional policy should be considerably  
reinforced, particularly as regards its "communautaire" aspects.
24. The Social Fund had already been reformed in 1983. The third  
structural fund - Agricultural Guidance - is currently being  
reviewed. The Commission is concerned that the action of the  
three funds be more coordinated than in the past. This can be  
done by combining action in the framework of the specific  
vocation of each fund in an integrated programme. Different  
integrated programmes are being developed. In Fontainebleau the  
political decision was taken to lauch the integrated  
mediterranean programmes. They concern the rural areas of the  
mediterranean region and in particular those likely to be  
affected by the third enlargement.

8.-
Economic Convergence
V .. *· ·»
25. The European Monetary System entered its sixth year and has  
continued to play its rôle as the framework for the convergence  
of monetary and economic policies. The EMS operated in a very  
stable environment and no changes in parity were necessary. The  
composition of the ECU was modified in September with the  
inclusion of the Drachma and a general revision of the weights of  
all participating currencies. The Commission has transmitted  
communications to the Council concerning the Lessons to be drawn  
from the operation of the EMS proposing a series of improvements  
in its mechanisms, the balance of payments support instruments  
and the role of the ECU in the relaunch of the process of  
financial integration in the Community.
26. During this time the Commission has developed its own
participation in the private ECU market so as to support and  
encourage the spontaneous development which today is the most
promising sign of the trend to the affirmation of a European  
monetary identity.
27. The EMS was a powerful motor of convergence of economic policies.
In the Commission's latest report on the economic situation it
was noted that the take-off in economic growth was quite
satisfactory. Nonetheless, the Commission was obliged to remind/
governments that without a change of policy, no reversal of  
trends in the labour market - there are now almost 13 million  
unenployed - could be expected in the next few years.
Internal Market
28. Progress has been made in developing procedures for the
elimination of technical barriers to the free movement of goods.
In particular this has been shown in the commitment for a common  
customs document and the development of a capacity for deciding

9.-
norms at European level. Another important step forward was made  
in October with the adoption of the Commission's proposals on  
public markets for telecommunications equipment.
Research and Development of new technolgies
29. In February, after many hesitations, mostly budgetary in origin,  
Council approved the Esprit programme. This showed the readiness  
of the Community to commit itself to the development of the new  
technologies. The approach adopted for Esprit should now be  
applied for other programmes. A first decision on a  
telecommunications programme was taken in October. The Commission  
hopes that a decision on the four-year research and development  
programme wilt be fully implemented before the end of the year.  
The content of the programme has already been approved by Council.
Europe without frontiers
30.The Commission had made a series of proposals on the easing of  
frontier contracts which were only partially approved by Council  
in June. The Fontainebleau European Council approved the  
Commission's original approach and called for a rapid follow-up of  
the work and "the suppression of all police and customs  
formalities at intracommunity frontiers for the movement of
persons".
31. Council's inability to launch a transport policy despite the  
Treaty requirement had led Parliament to take Council to Court.  
The Court will rule in January. In the meantime a first political  
decision has been reached on a transport policy which should be  
confirmed by the end of the year. For the first time  
appropriations have been entered into the budget to finance  
certain road investments relevant to the free operation of the
common market.

10.-
V. EMARGEMENT
32. The negotiations on the enlargement of the Community continued in  
1984. The Fontainebleau agreement on own resources reopened the  
way to a successful conclusion of the negotiations. At the end of  
October the Community, Spain and Portugal officially noted the  
irreversible nature of the enlargement planned for 1st January  
1986. The difficulties still to be overcome, however, are  
considerable.
VI. EUROPE IN THE WORLD
33. Whereas the internal development of the Community and its  
enlargement have hit notable obstacles, its reputation and  
prestige round the world continued to grow. The traditional  
guidelines have been upheld and in particular the Community acted  
in defence of an open world trade system and stood up to  
protectionist pressures better than most.
34. Despite divergences of interest with our major industrial  
partners, in particular the United States and Japan, we have been  
able to develop and enrichen our relations without any major  
conflicts.
35. Relations with Efta have been strengthened. The objective is thet
creation of a European "industrial zone" and an important step in  
that direction was taken at a ministerial meeting in April.
36. The negotiations for a third Lomé Convention have been brought to  
a successful conclusion. The new Convention reaffirms the  
Community's commitment towards the states of sub-Sahara Africa -  
Angola and Mozambique will join the signatories of the present  
Convention - the Caribbean and the Pacific.

11.-
37. The Community, b,a.s. paid particular attention to our relations with  
Latin America. Efforts were crowned with the recent ministerial  
meeting in San Jose, Costa Rica, with the commitment of Member  
States to increase aid in favour of Central America.