ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)26
Vol.1979/0010

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)26final
Brussels/12February1979*
Communication bytheCommission totheCouncilandtheParliament
FirstReporton
EURATOMBORROWING ANDLENDINGACTIVITIES
I
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Communication "bytheCommissiontotheCouncilandtheParliament
FirstReporton
EURATOMBORROWING ANDLENDINGACTIVITIES
I.Introduction
OnthebasisofaproposedbytheCommission,theCouncilempoweredthe
formeron29March1977.toissueloansonbehalfoftheEuropeanAtomic
EnergyCommunity.Thefundswillbemadeavailableintheformofloansfor
thefinancingofinvestmentprojectsrelatingtotheindustrialproduction
ofelectricityinnuclearpowerstationsandtoindustrialfuel–cycle
installations .
PursuanttothisDecisiontheCouncilfixedat500millionEuropean ^units
ofaccountthemaximumamountoftheloanswhichtheCommissionisempowered'toissueonbehalfofEuratomv^/.
ThisreportisthefirstwhichtheCommissionissubmittingpursuantto
Article4ofDecision77/270Euratomwhichstipulatesthats'TheCommission
shallinformtheCouncilandtheEuropeanParliamentatregularintervalsof
therevenueandexpendituretransactions arisingoutofthecontracting and
servicingofEuratomloansissuedandgranted'.
II.Implementationofthemandate
Actiontaken
Actingunderthemandate,Euratomhasmeanwhilepart-financed three
projectslocatedinPrance,ItalyandtheFederalRepublicofGermany.The
Commissionhasalsotakendecisionsonfourotherprojects(locatedinBelgium,
FranceandtheFederalRepublicofGermany)forloanstobeissuedinthefirst
quarterof1979»addition,fiveprojectsarecurrentlybeingstudied.In
eachcasetheprojectisanuclearpowerstation.
Upto31December1978Euratomhasdisbursedatotalof170millionEUA
inconnectionwithprojectsdecidedbytheCommission .
(1)O.J.L88of6April1Q7?JECBull.>-'577,Itsa2,1,101
Decisions77/270and77/271TiteratOR.

-2-
PursuanttoArticle 1,paragraph3,ofDecision77/270'Borrowing
transactions and.thelendingtransactions relatedtheretoshall "beexpressed
inthesamecurrencyandcarriedoutonthesameterrasasregardstherepayment
ofprincipalandthepaymentofinterest.ThecostsincurredbytheCommunity
inconcludingandcarryingouteachtransactionshall "bebornebythebeneficiary
undertakings concerned' .
Attherequestofthebeneficiaries theborrowing/lendingtransactions
havebeencarriedoutinGermanMarks,SwissFrancsandUSdollars.The
difference betweentheamountborrowedandtheamountoftheloanisdueto
thechargesincurredinissuingtheborrowings .Thisdifferencemustbe
recoupedbytheCommission whentheamountborrowedisrepaid.•
Thedifferencebetweentheinterestratefortheborrowings andthe
interestratefortheloanisdueto:
-theneedtoredeemprogressively theissuingchargesreferredtoearlierj
-theneedtccovertheloanservicingcharges $-the1/8'/^peryearcommissionontheloanoutstanding ,paidtotheEIBin
settlementoftheirqhargesforprocessingtheloanandactingasexecutive
agentforEuratom.
Loansrequestedanddecideddonotexceedthe20$limitoftheinvestments
concernedsetbytheCouncilasthemaximumforEuratomoperations .Euratom
hasthesameguaranteesastheEIB.
III.Cooperation betweenEuratomandthealB
Cooperation betweenEuratomandtheEIBisbasedontheagreementbetween
theCommission andtheEIBthetextofwhichisgivenintheminutesofthe
Councilmeetingof29March1977•Tothisoutlineagreementhavebeenadded
anumberofpracticalprovisionsagreedinternallybetweenthedepartments
ofthexwoinstitutions .
Inalltheapplications processedsofartheEuratomloanhasbeen
accompanied bypart-financing ,orbyaguarantee,bytheE.I.B."
AsfarasloansareconcernedtheCommissionhasinthepastagreed
v;iththeE.1,3,tomakeloansofequalsizeinanumberofcases1'#
IV.Assessment
BothEuratomandtheEIBhavenotedacertaintime-lagbetweenthe
dateofapplication ,thedecisionandthepayment.Themainreasonsforthis
situationareasfollows:
–manumberofMemberStatesthereisacertainamountofdelayin
theimplementation ofthenuclearprogramme ^thefinancialrequirements
ofthedevelopersaretemporarilyatamuchlowerlevelthantheywere
whentheloanapplication wasmadeandonwhichthepaymentsschedule
wasbased:

-3-
-thedevelopers 1ownfundshaveincreasedasaresultofhigherelectricity -
chargesinvariousMemberStates$
-somenationalauthorities wereatvarioustimesunwillingtoagreeto
theuseofforeigncurrencyforaparticulartransaction .
Furthermore ,itisafactthatincertaincasesthecreditobtainablein
themarketbytheinvestingcompaniesthemselvesissufficiently largethatthe
improvementthatcouldbebroughtaboutbyhelpfromEuratom,thoughimportant
indeedintotalamount,remainshoweverlimited,intermsofinterestpercentage,
toafigureclosetothatoftheexpensesincurred,(seesecondparagraph,
page2)
Itshouldbeaddedthatinterestinfinancialassistance byEuratomhas
increasedforprojectswhichareexcludedonthebasisoftheCouncil's
Decisionof29March1977sforexample,nuclearinstallations forheat
production,financingoffuelinventoriesaftertheinitialcharge,nuclearmaterials
transportation systems.Questionshavealsobeenraisedwithregardtothe
conditionsgoverningEuratomloansforthefinancingofuraniumoreproduction
facilitiesoutsidetheCommunity.
Ifthepaymentsearmarkedforcurrentprojectsareincluded,Euratomloans
willby1979total300millionEUA.ThisisthelevelstipulatedbytheCouncil,
inordertodecideonthefixingofanewmaximumamountforasecondseries
ofEuratomloans.
Itispossiblethat,apartfromthesectorsmentionedabove,substantial
loanapplications maybeforthcoming fromthefuelcyclesector.
V.Conclusion
1.InaperiodwhenthenuclearprogrammeinmostoftheMemberStateshas
progressedonlyslowly,Euratomhasnevertheless beenabletomakeafinancial
contribution tothesereducedprogrammes.
2.Thevolumeofloanapplications handledshowsthatin1979"thelimitof
300millionEUAfixedbytheCouncilwillbereached,sothatitwill'be
necessaryforthelattertoauthorizeanewamountofEuratomcredit.
3.Onthebasisofitsexperiencesofar,theCommissionconcludesthat
theCouncilDecisionasitnowstandsdoesnotputEuratominapositionto
contributetothefinancingofsomeaspectsofthefuelcycleandthatcon­
sequentlytheDecisiondoesnotcoverthefullrangeenvisagedbytheenergy
policy.
ThisreportisaddressedtotheCouncilandtheParliamentforinformation
purposes.