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COM (83) 511 
 
 
 
Vol. 1983/01 96 
  
 
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
General SecretariatC O M (83) 511 final
Brussels, 5  August 1983
FO R  O FFICIAL U S E  O N LY
PROPOSAL
COUNCIL DECISION
extending the Decision of 21 february 1983 on the  
application of certain Guidelines in the field of  
officially supported export credits
(submitted to the Council by the Commission)
C O M (83) 5 11 fin a l

EXPLANATORY MEMORANDUM
BACKGROUND
1. In Its communication to the Council C0MC83)448 Final of 6 July 1983,the  
Commission argued that the proposal put forward by Mr. Wallen,
the Chairman of Participants,to revise the Arrangement on Guidelines  
for Officially Supported Export Credits (the "Consensus") constituted  
a fair and balanced compromise between the interests of the Community  
and its trade partners and consequently should be accepted by the  
Council.
2. Following intensive discussions in the ECO-FIN Council on 11 July, it  
emerged that although eight member states shared the Commission's view­
point, France and Italy considered that the compromise was unsatisfactory  
in a number of respects. As a result the Commission was authorised'to  
inform Mr: Wallen that
- the Community was not in a position to accept the compromise ;
- new negotiations on revising the Arrangement should be  
resumed as soon as possible; and
- the validity of the existing Arrangement should be  
extended until 31 October 1983.
* ^
3. In response to the Community's position and following consultations with
other Participants, Mr. Wallen concluded on 14 July 1983, one day
before the expiry of the principal dispositions*of the Arrangement,
that the only possibility of ensuring the continued application
of the Consensus as an instrument of international cooperation would be/ •  • for all Participants to agree
- to prolong the Arrangement until 31 October 1983, as  
requested by the Community; and
- to implement immediately the guidelines for the evaluation
*  *of commercial interest reference rates , as set out in  *Annex III to Mr. Wallen's original proposal.
* As specified in TD/Consensus/82.23
** It should be noted in this context that the implementation of annex :■  
formed part of the fall-back solution originally put forward by Mr. walien  
In the event of disagreement on his proposals to revise the Arrangement.The Community reserved its position on this point at the negotiations in Pans , 
June.

-  2 -
Furthermore, Mr. Wallen stated that disagreement on either of these two  
elements by any Participant would signify the collapse of the Arrangement  
on 15 July 1983.
A. Extensive internal consultations within the Community failed to indicate  
a common position which could be communicated to Mr. Wallen. In effet :
“ Eight member states indicated that they could agree to the  
proposal;
“ France stated that it wasjjnable to accept the implementation  
of Annex III;
~ Italy did not officially communicate its viewpoint
5. In the absence of a definitive reply from the Community, Mr. Wallen  
informed all Participants on 29 July 1983 :
"As of today , I have received no notification of disagreement with the  
proposal in four points I made in paragraph 3 of my telex of 14 July 1983.  
I therefore have to conclude that this proposal is implemented".
i
This telex puts the Community under the obligation to react immediately.  
Indeed,silence would be interpreted as de facto acceptance of Mr. Wallen's  
conclusion. On the other hand, a negative reaction from the Community  
would signify the coltapse of the Consensus (see paragraph9 below).
In these circumstances, it is imperative that the Council formally  
pronounces on this issue.
,  /
ANALYSIS OF THE SITUATION
6. The Commission continues to maintain its view that the interests
of the Community would have been served best if its earlier proposal Lw»  
accept the Wallen compromise had been adopted by the Council.
Nevertheless, and in accordance with the Decision of the Council, the  
Commission will endeavour to improve this compromise even though, as  
it has stated on numerous occasions, the prospects for obtaining  
substantial concessions from other Participants, notably the U.S. ,  
are not favourable.

“  3  -
7. The Council has already agreed to extend the present Consensus  
arrangements up to 31 October 1983 . However, it has become evident  
that the only way to achieve this is to also apply Anriex III for the same  
period.The Commission therefore proposes to apply Annex III on a
basis, without prejudice to the Community's future negotiating
position.
8. In this context it should be stressed that the actual Annex III  
merely elaborates a general rule already enshrined
in the Consensus under paragraph 3(b), establishing a certain discipline  
for financing in low interest rate currencies. Of course, Annex III  
would permit Japan temporarily to lower its reference rate by 0.1 X 
However no long term commitment would be given by the Community for the  
period after 31 October 1983 and in the meantime the competitive situation  
of Japanese exports would not be significantly enhanced. It should  
be remembered that the yen rate along with other commercial  
interest reference rates will be subject to review in  
autumn in the light of experience with the aim of ensuring  
equality of treatment amongst all Consensus Participants.
CONSEQUENCES OF A NEGATIVE REACTION PROM THE COMMUNITY
9. In the. event that the Community informs Mr. Wallen that it is unable  
to agree to his latest compromise proposal, the Arrangement will to  
all intents and purposes cease to.be operational, since it follows  
from paragraph 15 of the Consensus--that in the absence of their renewal before  
16 July 1983, Consensus provisions will cease to apply  
with respect to :
interest rates;
- low interest rate currencies, including the Japanese yen;
- the classification of countries.
Furthermore the Community will have sacrificed the non-derogation clause  
which is the l  ejmea ns to keep in check export credit offers of the  
US and others, notably with respect to repayment terms.

-  4 -
:  ;h-1^. It 1  s clear also that in the event of a collapse of the Arrjjpgement ’ £-■.•
all export credit subsidies, other than those on primary products would  
be prohibited by virtue of Article XVI GATT, and Article 9 of the
GATT Subsidies Code .  Furthermore, given that the' Community has £ .
signed the Agreement as such, the. Commission would be obliged to ensure :  
that the Community respected its dispositions. This implies de facto '"•  
that a system of market interest rates should be in operation, a result  
which would be welcomed by all of the Community’s partners, notably the U.S.
11. As* to the negotiations which should be resumed in autumn,
I it is evident that if the Community cannot agree to the
/ temporary prolongation of the current Arrangement and the implementation de facto
rof Annex III, the climate for any new negotiations as requested  
by the Council will be extremely unfavourable. Indeed it is by no means  
certain in such circumstances thdt our Partners would agree to a nevi  
negotiation.
COMMISSION PROPOSALS ... -  *
’ ’  T ' - 1 - - I  - -inr».i»j i i . r u r m  j . - .iT~■  |
12* The Commission cannot by any conceivable objective standaids imagine that
the Council wi'tl judge that the benefits and advantages of the Consensus <
to the Community should be sacrificed on the’minor .issue of whether to  
V implement de facto commercial interest reference rates for low interest  
rate currencies .While the Commission would prefer the Council the  
formally adopt the latest Wallen compromise, it considers that in the  
light of the strong reserves expressed by France and Italy regarding
the adoption and implementation of Annex III and faced with the urgent
/
problem of arriving at a common Community position in order to safeguard  
the future of the Arrangement , it would be sufficient under current
circumstances if Annexe III would be implemented de facto,up to 31  
October 1983, without prejudice to the position that the Community  
will adopt at the next round of negotiations on revising the Consensus.

-  5 -
13. To this end/ the Commission proposes that :
" The Council formally adopts the prolongation of the existing  
Arrangement until 31 October 1983;
- The Council declares that the guidelines in Annex III are applied  
in the Community :  this will be entered into the minutes of the  
Council;
- The Council invites the Commission to inform other Participants
to the Arrangement of the preceding elements/ it being underlined  
nevertheless that the application of Annex III shall occur  
de facto without prejudice to the position that the Community  
will adopt at the next round of negotiations on revising the  
Consensus.
14. The Commission underlines that this proposal constitutes an  
indivisible whole.

COUNCIL DECISION
\
extending /  ■  /  ■  .the Decision of 21 February 1983
on the application of certain guidelines in the field of  
officially supported export credits
THE COUNCIL OF THE EUROPEAN COMMUNITIES>
Having regard to the Treaty establishing the European Economic  
Community, and in particular Article 113 thereof,
Having regard to the proposal from the Commission,

-  2 -
Whereas the Community 1s party to the Arrangement on guidelines  
for officially supported export credits;
Whereas this Arrangement was the subject of the Decision of 4 April 1978  
whereas that Decision has been extended and amended, most recently by  
the Decisions of 21 February 1983 and 16 Hay 1983;
Whereas the Decision of 16 Hay 1983 expired on 30 June 1983;
Whereas it is essential to extend application of the Arrangement to  
31 October 1983, pending new negotiations on revising the Arrangement  
due to take place in autumn 1983.
HAS ADOPTED THIS DECISION :

-  3 -
A rticle 1
Article 2(1) of the Decision of 21 February 1983, amended by Article 1  
of the Decision of 16 May 1983, shall be replaced by the following :
1."The Decision of A April 1978 is hereby extended until 31 October 1983. "
* .__
Ar
ticle .2
-/
V
This Decision is addressed to the Member States.
D o n e  at BrusselsF o r  the C ouncil
T h e  President

DECLARATION IN THE MINUTES O F THE COUNCIL
"The Council declares that during the period from 16 July 1983 to  
31 October 1983/ the guidelines reproduced in the anne,* shall be  
applied in the Community.
The Commission is invited to inform Participants to- the Arrangement  
that this application shall occur de facto and without prejudice  
to the position that the Community will adopt at the next round  
of negotiations on revising the Consensus".

ANNEX
Ar«*Jp.X I  I I
1 or the evalu atio n o f
Comrr.e r c i a I Interest Reference Pates
P a r  t  i  cI pant s agreed that th e a lm s w hich are hlphllzhted In
paragraph 9shouId b e errp 1 o y e d  ..nevaIua t  i  n gC u I d e  1 1 n e  s
o f 1D /C 0f.'SEM 5US/83.2a
proposals for establishing conrrr.e r c i a Iinterns treference rate s . T h ese are the following:
(i)T h e  C om m ercial Interest Reference Bates should b e  
representative o f final c  orrme  rclal len d  In ?  rates o f  
interest In  th e  dom estic m arket o f th e  currency  
concerned;
(il) T h e  C1W\ should closely correspond to  a rate for a 
first class acrr.es  tic b o rro w e r,*
(III) The CIPJJ.  should J :e  based, » v h e r c  appropriate, o n  th e  
funding cost offlxed Interest-rate finance over a  
period o f n o t less th a n  5 y e a rs ';
( iv) T h e  C IPR  should n o t lead to  a  distortion o f dom estic  
competitive conditions;
(v )
:y j.The CIRR  should closely correspond to  a  rate
available to  first-class foreign h o r r o v /r . r  i ,v •
Participant* h a v e  exam in ed  p ro p o s e .!* for com m ercial  
interest reference rates  set o u t in TC/CCY-'SEr'iU?,/  ?  3.2* 
w h ich  w ere established taking account of suggestions m a d e ,  
in  TC/CCT'S EhSUS  / 8 3,3 ,  T h e y  agreed o n  th e  Conrr.fcrcial  _ * x  
Interest Referencc•R dr*s  proposed, o n  th e  basis o f m arket  
conditions in  April J 923 ,  for th e  nine currencies exam in ed  
hitherto a s  v .e ll a s  th e  conditions fo r their "$r a n d  t h e .  
provisions for their Modification a s  stipulated In  th e  
following table a n n  noted tnat widely'used currencies
-£H „ e __I ea d  '  )  V  available t o other P ar t  i c  i  oann ,
Participants noted that th e  Participant! concerned vill  
notify th e  co rn r.ercla!  interest reference rates to  come  
into effect a s  o f f  ^  t  h  July l? 8 3. . .  '  '
In The reviews of CIP k's
Participants v,Il)»bear in  m ine the aforementioned aim * r.no 
observations ii'a o c  In  Part III o f Section !! o f  
Tr./CCtx'SI;N 5U5/83.28  .  It I s  furthermore understood that the- 
fir s t  r  e v  i  c v /  w i I  f  take p  I  a c e  i  n  c o n  j  u n ci io n  with th e  
Autunr/i  I9£  m eeting o f P a  r  t  i  c  i  p a n  t  s  .specific

COMMERCIAL INTEREST F.EFEREiiCE  RATES (CIKRs) A5 OF fiPrtIL 1963(3 )
Mote:  The premium of 0.3 percent of Paragraph 3(b) is to be added to there rates when official  
financing support is provided. Interest is payable semi-annually in arrears, in accordance  
with Paragraph 3(c) of the Arrangement.
Currency
Or L
DM
SFR"CIRR"
X per annum
i) 9-50
ii) 10.00
a) 8.20
b) 8.90
a) i) 6.25
ID
b) I) 6.50
IDConstruction
Government 5 year bond  
yield + fixed spread ♦  
fixed margin
Disbursement rate * 
variable margin
Government 5 year bond  
yield + variable mar gin
Government 10 year bond  
yield + variable margin
Bank Cash Certificates
♦ fixed margin
Disbursement rate +
IX per annum ont  the  
undrawn balance
Bank Cash Certificates
♦ fixed marglTT
Disbursement rate +
IX per annum on the  
undrawn balanceFixed from  
Disbursement
Contract
Contract
ContractRestrictions Rate notified
Weekly
Weekly
Cat I-IX (SDR Until further
A0 million or less) notice
Cat X (over SDR Until further
A0 million) notice
Disbursement 8 yrs. or less(2) Monthly  
Hay never be  
offered from\tender
Contract " Monthly
Disbursement over 8-10 years(2) Monthly
Contract Monthly
U)-  See Part II of Section II of TD/CONSENSUS/83.28 for a detailed description of each  
reference r a i e ^ I
(2) Calculated from disbursement.

Currency
$us
Scan
Pound
Sterling
FMK"CIRR"
% per annum 
i) 11.73
li) 11.53 
11.41(1)
12.75.
a) 11.35
*  h) 11.60
- t .  * .
Schilling a) 5.35
Y e nb) 8.55 
a) 8.3Construction
Gov't 5 yr bond yield 
♦ fixed spread ♦ fixed 
margin
Disbursement rate ♦ 
fixed margin
Gov't 5 yr bond rate 
+ fixed Spread + fixed 
margin
Gov't 5 yr bond “par 
yield" ♦ fixed spread 
+ fixed margin
Held above commercial 
bank lending rates and 
gov't bond rates
Hell above commercial 
bank lending rates and 
gov't bond rates
Long term prime rate 
less 10 basis pointsFixed from Restrictions
Disbursement
Contract
Contract
Contract
Contract
•
Contract
Contract
••
Contract
Contract5 years or less
years 
2 to 5 yrs
over 5 yrsRate notifies
Monthly
Monthly
Monthly
Monthly
/
Until further 
notice
over 5 to 8 1/2 Until furth er
notice 
Quarterly
<  Quarterly
Until further 
notice
( 1 ) Based on the average yield (10.41%) in March 1583 of a Canadian governmentP bond of 15 
March 1588, at 10 1/2 %; Bank of Canada Monthly Review.