ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(77)195
Vol.1977/0077

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)195 final
Brussels .^June 1977
GUIDELINES FOR COMMUNITY REGIONAL POLICY
(Communication andProposals from theCommission totheCouncil )
C0K (77)195finalr*/£ 'L~p/7- 'Y.

GUIDELINESPORCOMMUNITY HEGì(MALPOLICY
Communication fromtheCommissiontotheCouncil
Articles2and18ofCouncilRegulation(EEC)Ro*,724/75of18Maroh1975
establishing aEuropeanRegionalDevelopment Fundrequiresthatin1977the
CommissionshouldlaybeforetheCouncilproposalsfortheCommunity's
regionalpolicyandfortheFund.Thepurposeofthepresentcommunication
fromtheCommissiontotheCouncilistocomplywiththisrequirement.

CONTENTSPage
Introduction (1-5) 1
I.Theeconomicandsocial "background(6–10) 3
II.Aims(11-14) 5
III.MeansofAction(15–56) 7
A.Establishing acomprehensive systemof
analysisandpolicyformulation (15–20) 7
B.Regionalimpactassessmentof
Communitypolicies(21-24) 9
C.Co-ordination ofnationalregionalpolicies(25–31)10
D.TheRegionalPolicyCommittee(32-35) 12
E.Strengthening anddiversifying financial
instruments (36–52) 13
a)theEuropeanRegionalDevelopmentFund(36-50)13
i.Theproblems(38) 14ii.Locationoftheproblems(39-42) 14iii.Itypesoffinancialassistance (43-46) 16
iv.Useoftheappropriatefinancial
instruments (47-48) 17
b)Loans(51-52) 19
F.Information (53-55) 20
IV.Futureoutlook(56-6O) 21
ANNEXES
I.ProposedamendmenttotheCouncildeoisionNo.74/120ofthe
18thFebruary1974ontheattainmentofahighdegreeofconvergence
oftheeconomicpoliciesofthememberstatesoftheEEC,aswellastothedecisionoftheCouncilNo.75/l85of18thMarch1975settingup
aRegionalPolicyCommittee.
II.ProposalforaRegulationoftheCouncilamendingtheregulation(EEC)
No.724/75oftheCouncilof18thMarch1975creatingtheEuropean
RegionalDevelopment Fund.
IIIProposalforaregulationoftheCouncilestablishing aninterest
rebatesystemwithintheEuropeanRegionalDevelopment Fund.

-1-
INTRODUCTION
1.ThetimehascomefortheCommunitytodefineclearlyanoverall
approachtoCommunityregionalpolicyforthecomingyearsandtospecify
indetailthemeasuresto"beadoptedwithintheframeworkofthepolicy.
Thisentailscertainchangestoexistingregionalpolicyinstruments :
theRegionalPolicyCommitteeandtheEuropeanRegionalDevelopment Fund.
TheneedtodefineregionalpolicyislaiddowninCouncilRegulation
No.724/75andhasbeenstressedbytheEuropeanParliamentinits
ResolutiononaspectsofCommunityregionalpolicytobedevelopedinthe
future,bytheEconomicandSocialCommitteeandbythesocialpartners.
Inthiscontext,theCommissionproposesthedevelopmentofspecificComm­
unityactions.Aswellasgeneralsupportfortheregionalpoliciesofthe
MemberStates–designedmainlytoremedyexistingregionalproblems–
Communityactionswillaimtohelpsolvethenewproblemsresultingfrom
theeconomicandsocialsituationtheCommunityfacesatthepresenttime.
2.TheeconomicandsocialcontextwithinwhichCommunityregionalpolicy
fallshaschangedfundamentally sincetheearlyseventies,whenthefirst
measuresofCommunityregionalpolicywereconceived.Newproblemsof
adaptationandredevelopment havebeenaddedtocontinuingregional
inequalities .
Thefirstpartofthispaperisconcernedwiththeanalysisofthisnew
economicandsocialcontext,sinceitisthedecisivefactorindetermi­
ningthesubstanceofCommunityregionalpolicy.
••/•••

-2-
3.TheaimsofCommunityregionalpolicyaredealtwithinthesecondpart
ofthepaper.Theseaimsreflectthemajorproblemsmentionedabove:
thereductionofcontinuingregionalproblemsandthepreventionof
newregionalproblemsarisingfromtheohangeinthestructureofthe
worldeconomyorfrompoliciesinitiatedbytheCommunity.
4.ThemeanstheCommunityrequirestomeettheseaimsarethesubjectof
thethirdpartofthepaper.Theseincludethedevelopmentofnew
methodsofanalysingproblemsandpreparingdecisions,changesin
existinginstruments andthecreationofnewones.
5.Finally,theCommissiontakestheviewthatCommunityregionalpolicy
shouldbecomprehensive .Thismeansthatitmustbeconceivedand
workedoutwiththewholeterritoryoftheCommunityinmind.
Particularattentionshouldbepaidtoapolicyforregionaladdsasa
wayofensuringtherightconditionsfortheproperworkingofthe
CommonMarket.Communityregionalpolicyshouldaimatgivinga
geographical dimensiontoallotherCommunitypoliciesfromtheir
inception.Throughtheco-ordination ofCommunityfinancialinstruments ,
itshouldhelpachievecoherencebetweenallstructuralmeasures.
••/•••

-5-
I.THEECONOMICANDSOCIALBACKGROUND TOCOMMUNITY REGIONALPOLICY
6.Communitydecisionsonregionalpolicyadoptedin1975^wereessent­
iallythereflectionoftwofacts.First,theprogressiveestablishment
ofthecommonmarkethadnotachievedthepositiveresultsexpectedin
termsofa"betterdistribution ofeconomicactivitythroughout Community
territory.Onthecontrary,theprosperityofthericherregionsin­
creasedwhileregionswithlessadvancedeconomiesencounteredincreas­
ingdifficultyinintegratingthemselvesintothegrowingmarket.This
waslargelyaconsequenceofthewayinwhichtheTreatywasconceived
andimplemented,withtheemphasismainlyontheabolitionofharriers
totrade.ThesustainedgrowthoftheCommunityeconomyoverthis
periodclearlyhadpositiveresults,eveninthelessfavouredregions,
hutitcontributedequallytohidingthepersistentimbalanceswhichhad
existedbeforetheestablishment ofthecommonmarket.
Inviewofthis,itseemedindispensable togivetheCommunitythetools
foritsownregionalpolicy,sincetheCommunityalonewasableto
assesstherealextentoftheproblemsand,byaddingitsefforttothat
oftheMemberStates,tocontributetosolvingthemostseriousones.
7.Thesepreoccupations remainvalid.Onecannowstatesomeyearslater
that,despiteincreasedeffortsbytheMemberStatesandtheCommunity
tospeedupthedevelopmentoftheleastfavouredregions,thesituation
hasnotchangedfundamentally andimbalancesbetweenregionsremain
excessive.
8.Economicandsocialtrendsinrecentyearshavemakethesituationeven
morecomplicated andworrying.Since1973theeffectsoftheeconomic
crisisandtheincreasedcostofrawmaterialshaveledtoaslower
growthrateandlessinclinationtoinvest.
••/•••
(l)Councilregulationsanddecisionsof18March1975»OJNo.L73
of21March1975

-4-
Inaneconomy whose growth rate has sodeclined ,thedevelopment ofthe
weaker regions isseriously affected ,andthepersistence ofregional
imbalances even threatens theproper functioning ofthecommon market
itself .Indeed ,notonly dotheless developed regions fail tointegrate
fully within theCommunity ,"buttheproblems towhich they give rise
become anincreasingly heavy burden onnational economies andthus
increase thepressure onthepublic authorities concerned torefuse the
constraints inherent inthemechanism ofCommunity integration .Itis
moreover anillusion tohope fortheconvergence ofMember States *
economies solong asregional problems continue toweight soheavily
oncertain economies .
Furthermore ,thenewinternational division oflabour nowgradually
emerging isimposing major structural changes ontheCommunity economy ,
socreating new sources ofregional imbalance .
9.Inthe light ofthis situation ,Community regional policy must become
more ambitious than inthepast .Even inaperiod ofsustained growth ,
theassistance given tothe least favoured regions didnotmake a
sufficient contribution tothereduction ofregional differences .As
well asanincreased effort toimprove theworking oftheCommon Market ,
acomprehensive policy ofstructural change isnecessary .This should
help both theregions that were insufficiently developed even before the
creation oftheCommon Market andregions either experiencing or
vulnerable tothedifficulties ofrestructuring andredevelopment .
10.Itfollows from this situation that Community regional policy must be
strengthened anditsfield ofapplication expanded .This isnotonly
desirable :itisnow one ofthe conditions ofcontinuing European
economic integration .
••/••♦

-s-
II.AIMS
11.Community regional polioy hastwomain aims ;firstly toreduce existing
regional problems which appear "both inregions traditionally less
developed andinthose involved inaprocess ofindustrial oragri­
cultural reconversion ;secondly toprevent newregional imbalances
arising from thechange inworld economio structures orfrom measures
adopted bytheCommunity within theframework ofitsownpolicies .
Theachievement ofthese aims implies aclose co-operation between the
Community andeach Member State andtherealisation ofavariety of
tasks .
12.Thetasks involve firstly thepermanent analysis andassessment of
trends inregional economies throughout thewhole Community territory ,
principally ,though notonly ,inthefield ofemployment ,toassess the
range andnature oftheregional imbalances affecting theintegration
process atCommunity level .Secondly they require that Community
policies andfinancial instruments ,structural andother ,areused ina
coherent andconvergent way ,iftheir consequences may ,atonetime or
another ,have aregional impact .Thirdly there must beco-ordination
oftheregional policies ofMember States ,both mutually andinrelation
toCommunity aims .Fourthly .andfinally ,there isthequestion ofapolioy
onfinancial assistance (Regional Fund );ontheonehand ,this takes
theform ofsupport fornational regional policies ,andontheother it
must beacatalyst inworking outandapplying specific development and
reconversion measures atCommunity level .
13.These aims andtheir achievement fall within theframework ofanactive
employment policy .Inthepresent economio situation oftheCommunity ,
thecreation ofnewjobs inregious where structural unemployment is
greatest must beapriority task .Onthebasis ofstudies ofregional
employment balances andtheregional development programme ,theCommunity
should make foreaoh region quantified forecasts ofemployment foraset
period ,taking particular account oftheemployment situation inagri­
culture .

Sincetheadjustmentsrequiredforthebalanceddevelopment ofeconomic
activitiesintheCommunitycannot "beachieved "bylargescalemigratory
movements,"betterdistribution ofthefactorsofproductionwithinthe
Communitymustbeachievedbycreatingnewjobsinregionsofstructural
under-employment andalternative jobsinregionsaffectedbytheneed
torenewandconverttheireconomicstructures.
Itscomprehensive approaohnowplacesCommunityregional
policyintheperspectiveofCommunitylanduseplanning.Inimplement­
ingthepolicy,theCommissionwill,particularly bymeansofthe
regionaldevelopment programmes,makeanefforttopromotearational
useofspace,abalanceddistribution ofactivitiesoverthewhole
Communityterritoryandeffectiveprotectionoftheenvironment and
livingconditions :asearlyasNovember1973»theCommunityacknow­
ledgedthatbalancedeconomiodevelopmentthroughoutthewhole
Communitywasinconceivable withoutaneffectivecampaignagainst
pollutionandnuisances(l).
••••
(l)ProgrammeofEnvironmental AotionoftheEuropeanCommunities,
22ndNovember1973(OJC112of20.12.73).

III.MEANSOPACTION
A.Establishingacomprehensive ^systemofanalysisand_polic.yformulation
15.Acomprehensive approachtoregionalpolicyinvolvesstrengthening the
systemofanalysisandassessmentoftheregionaleconomiesofthe
Communityasawholeandoftheirrespectivedevelopment.
Thisanalysisshouldincludeallregionsandbeasexhaustiveasposs­
ible.Indeed,adetailedknowledgeofthedevelopmentofallregions,
includingtherelativelyprosperousregionswhiohsupplyalargepartof
theresourcesrequired,willassistindiagnosingandremedyingregional
problems.
16.Withthisintention,thetaskstobeundertakenare:
–toanalyseregionaltrendsand,inparticular,toconsiderhow
regionaldisparities havedeveloped;
–topinpointregionsfacingorlikelytofaceproblemsofCommunity
size;
–toworkoutajointmethodforassessingtheresultsofnationaland
Communityregionalpolicies;
–toprovidethestatistical andmethodological basisneededtoassess
theregionaleffectsofCommunitypolicies.
17.Aspecialefforttoimprovestatisticsbeyondwhatiscurrentlyavailable
isneededinthisrespect,bothbyMemberStatesandbytheCommunity.
Thisstatisticaltoolincludesanumberofkeyregionalindicatorstobe
workedoutonaCommunitybasis,suchasactivityrates,employmentby
sector,-unemployment ,employmentshortfallsforecasts,netmigration,
GUPandincomeperheadofpopulationandperemployedperson,
fiscalcapacityandeffort,anddataonthelevelofprovisionand
needsforinfrastructure .Theforecastingofregionalemployment
balancesisofspecialimportanceheretoindicatethoseregionsneeding
Communityhelp.Theexaminationandassessmentofthesituationineach
regionshouldbeundertakenwithintheframeworkofacomprehensive
analysisoftheCommunity'seconomicsituationandofthegeneral
economicpolicymeasureswhichitrequires.

-o-
18.Onthebasisofthisworkasawhole,theCommissionwillpresenttothe
Counciladraftreportonthesocialandeconomicdevelopment ofthe
regionsoftheCommunityeverytwoyears,startingin1979«Thisreport
isintendedtoindicatetheprincipalregionalproblemsattheCommunity
level,toassesstheresultsachieved "bythejointactionsoftheMember
StatesandtheCommunityagainsttheseproblemsandshowthe
conditionsforaneffectiveco-ordination oftheregionalpoliciesof
theMemberStates.TheseregionalproblemsbeingaCommunityresponsib­
ility,itisdesirablethatitshouldbediscussedbytheCouncilat
regularintervals.
TheCouncil,afterconsultingtheEuropeanParliamentandtheEconomic
andSocialCommittee,wouldapprovethereportandfixthepriority
objectivesofregionaldevelopmenttopursueatCommunityleveland,
followingfromthat,guidelinesfornationalandCommunityregional
policies.
19*Theprocedureforexaminingthereportshouldfollowthatprovidedfor
inArticle4oftheCouncildecisionof18February1974ontheattain­
mentofahighdegreeofconvergenceoftheeconomicpoliciesofMember
StatesoftheEEC.Tothisend,thedraftreportwillbeaccompanied
byopinionsoftheEconomicPolicyandtheRegionalPolicyCommitteesso
astoguaranteeconsistency betweeneconomicandregionalpolicy
20.Thisanalyticalandconceptual workshouldbeextendedtocoveralso
theeffectiveness ofthemeansandinstruments usedsoastobuildupa
coherentsystemforassessingresults.Thisisacomplicated problem
whichcanonlybesolvedbystages,andbytakingaccountofthefindings
ofstudiesundertakenandexperiencegainedwithintheCommunity.
Tothisend,theRegionalPolicyCommitteewillcontinuetostudythese
problemsconcentrating ontheeffectiveness ofdisincentive measures,the
evaluationofdirectregionalaidsandonpreparingamethodforassessing
results.Thisworkshouldbecompletedandavailablebeforetheendof
1979sothattheCommissionandtheCouncil,whenconsideringthetwo-
yearlyreportonregionaltrendsintheCommunity,canestablishguide­
linesforregionalpolicy.
•#/•••
(l)DraftmodifieddecisionsattachedinAnnexI.

y-
B.RegionalimpactassessmentofCommunitypolicies(R.I.A.)
spatial
21*TheCommissionbelievesitindispensablethatfromnowonth^/dimension
"beassessedandtakenintoaccountintheformulation andimplementation
ofthemajorCommunitypolicies.Thiswillpermittheframingofthe
policieswithproperregardtotheirregionalimpaotand,ifneedhe,the
adoptionofanymeasuresrequiredtoensurethatthesepoliciestakefull
effectandthatanyadverseregionaleffectsarecorrected.
22.Tothisend,theestablishment ofacomprehensive systemofanalysisand
assessmentofregionaleconomiesshouldbesupplemented bythesystematic
assessmentoftheregionalconsequences ofCommunitypolicies,whenever
significant newmeasuresarecontemplated.Itshouldbenotedthatthis
overallapproachentailsthecommunication totheCommissionofaccurate
sectoralandregionalstatisticaldata.
23.Inpreparingitsproposalsfortheimplementation ofmajorCommunity
policies,theCommissionwillconsidertheirregionalimplications.
Amongtheregionalimplications ,theCommissionwillgivespecial
consideration totheimpactonemployment,thoughnotneglectingother
factorscharacteristic ofregionaldifferenc®suchasproductivity ,
earnedincomeandmigration.
24*ThiswillestablishasystematiclinkbetweenCommunitypoliciesand
regionalproblems.Theharmoniousdevelopmentofeconomicactivity
overthewholeCommunityterritoryalsorequirestheco-ordination of
thevariousCommunitypoliciesandfinancialinstruments,andcorrespond­
ingco-ordination ofthepoliciesofMemberStates.
••/•••

-10-
C.Co-ordination ofnationalregionalpolicies
25.Thetwo-yearlyreportonCommunityregionaldevelopment ,andtheaims
andguidelinesfixed "bytheCouncil,willformthe"basisforperiodical
comparisonofregionalproblemsinthedifferentMemberStatesandof
nationalregionalpolicies.
26.Thiscomparison,whichisalsothefirststageofacoordination process,
mustcovernationalregionalpoliciesandtakeaccountofthevarious
structuralmeasureswitharegionalimpact,infrastructure projectswith
direotorindirectregionalconsequences andfinancialtransfers "between
regionswithinaState.Itmusttakeaccountofsuchsystemsofregional
aidthattheCommissionconsiderscalledforunderArticle92oftheEEC
Treaty.Thiscoordination ,to"beachievedgradually "butwithincreasing
convergence ,mustinduecourseallowanimprovedregionalallocation
ofresources.
27.Inthisconnection,regionaldevelopment programmesareaparticularly
importantinstrument^^:theyshouldspecifytherequirements,aimsand
prioritiesofeachregionandthemeansnecessaryandavailableto
achievethem.TheirexaminationatCommunitylevelwillmakeitpossible
totakeintoaccounttheguidelinesandpriorityaimssetbytheCouncil,
afterconsideringthetwo–yearlyreport,andtheotherCommunitypolicies.
Itisclearthatcoordination canbeoompletelyfruitfulonlytothe
extentthattheguidelinesandaimshavethemselvesbeenlaiddownwith
someprecision.Insofarastheseprogrammesconcernfrontierregions,
co-ordinating infrastructure projectswillbeaprioritytask.
MemberStateswillspecifytheuseofresourcesreceivedfromthe
RegionalFund,butitisattheleveloftheseprogrammesthatthe
complementary natureofCommunityactionandthatoftheMemberStates
willbeensured,thusguaranteeing aspeedingupoftheoverallregional
developmenteffort.
••/*••
(l)UnderArticle6ofthepresentEREFRegulation,developmentpro­
grammesforregionstheFundassistsmustbenotifiedtothe
Commissionbytheendof1977*

11
28.Studiesareatpresentinprogressonthescopeforcoordinating dis­
incentivemeasures.TheRegionalPolicyCommitteehasbeenaskedto
reportonthissubjecttotheCommissionandtheCouncilbytheendof
1979.
29.SuchmeasuresarealreadyinforceinsomeMemberStates.However,to
beeffectivebothatnationalandCommunitylevel,thelimitation
soughtoneconomicconcentration mustbeaccompanied byexpansioninthe
development andreconversion regions.Thiscannothappensolongasa
firmpreventedfrominvestinginoneCommunityregionhasnodifficulty
ininvestinginanothersimilarlycongestedregionoftheCommunity
wheredisincentive measuresarenotapplied.
30.Disincentive measuresco-ordinatedatCommunitylevelwill,especially
inalaterperiodofrisinginvestment,beabletomakeaneffective
contribution toanewdistribution ofhumanactivitythroughoutthe
Communityintheperspective ofEuropeanlanduseplanning.
31.Moreover,theCommission,underthepowersitholdspursuanttoArticles
92andthosefollowingoftheEECTreatyisatpresentreviewingthe
systemforcoordinating regionalaidswhichithadestablishedin1975*
Inassessingtheseaids,theCommissionwillseethatabalanceis
ensuredbetweenregionaldevelopmentconsiderations andtheneedto
maintaincompetition.Insodoing,itwillcontributetotheharmonious
developmentofeconomicactivitiesthroughouttheCommunity.
••••

-12-
D.TheRégionalPolicyCommittee
32.Thevariousmeasurespresentedinthiscommunication should,when
applied,confirmandstrengthentheroleoftheRegionalPolicyCommittee.
Consultation oftheCommitteeonthedrafttwo–yearlyreportprepared "by
theCommission,"beforeitspresentation totheCouncil,underthepro­
ceduresmentionedabove,willhighlightoneofthetasks
conferredtoitbyitsmandate,tostudythedevelopmentoftheeconomic
andsocialsituationinthedifferentregionsoftheCommunity.
33.TheRegionalPolicyCommitteewill"beinformedoftheconclusions ofthe
mainreportsanalysingtheregionalimpactofCommunitypolicies:this
willenableittomakeamoredetailedstudyoftheimplications ofthe
geographical dimensionofthesepolicies.
34.TheconclusionstobedrawnbytheCommitteefromitsexaminationof
disincentive measures,oftheevolutionofdirectregionalaidsand
thedevelopment ofamethodforassessingresultswillcontribute
directlytotheelaborationofmeasurestobeadoptedinthese
variousfields.
35«Lastly,theCommissionsharesthewishrecordedbytheEuropeanParlia­
mentinitsresolutionof21April1977"toseetheregionsconcernedand
theirrepresentatives associatedwiththepreparation ofCommunity
regionalpolicy.Theyarealreadyinvolvedinitsimplementation atthe
leveloftherealisation ofinvestments.TheCouncilDecisionsetting
uptheRegionalPolicyCommittee^^anditsrulesofprocedurealso
providesexpresslyforthispossibility^^.
(1)OJNo.73of21March1975
(2;OJNo.L320of11December1975
(3)Article5oftheDecisionprovidesthattheCommitteemay,inacc­
ordancewithitsrulesofprocedure,takecognisanceoftheviewsof
interestedpartiesfromtheregionsandfromtradeunionandbusiness
organisations .Article5(2)oftheRulesofProcedurestates"When
itemsontheagendaareofconcerntoparticularregions,theCommittee,
ifmembersappointedbytheMemberStateconcernedthinkitusefultodo
so,maytakeevidence,eitherorallyorinwriting,frominstitutional
representatives orfromotherinterestedpartiesfromtheregions
concerned".

-13-
E.Strengthening anddiversifying thefinancialinstruments ofCommunity
regionalpolicy
a)TheEuropeanRegionalDevelopmentFund(ERDF)
36.Bydeployingtheresourcesmentionedabove,theCommissionwillheable
toexertasubstantialinfluenceonthedevelopmentoftheregionsin
theCommunity.AmongtheseinstrumentstheEREFhasaspecialplace.
TheproposalsoftheCommissioninthisrespect,asenclosedinAnnexII,
showtheCommission'sdesiretomaketheseinstrumentsofregionalpolicy
moreefficientandmorerelevant.IntheviewoftheCommission,Fund
assistanceshould "beavailable "bothtosupporttheregionaldevelopment
measuresoftheMemberStatesandforspecificactionsinordertotake
accountoftheregionaleffectsofexistingandfutureCommunity
policies.ThisdualrolewouldinvolvedividingEREFresourcesinto
twosectionstaquotasection–thelargerone–towhichnational
quotaswouldapply,wouldbeintendedtofinancegeneralsupportmeasures
andanon-quotasectiontofinancespecificaotions.
37*Throughitssupportoftheregionaldevelopment measuresofMemberStates
theEREFisintendedtoensurethatresourcesaretransferred tothe
Community'spriorityregions,inordertospeeduptheirdevelopment and
reconversion byhelpingtofinancepriorityprojectsorgroupsof
projectswithinregionaldevelopment programmes.
Inthespecificactions,theCommunitywillbeexpressingitsownres~
ponsibilityforcorrectingregionalimbalances.Theseactionsare
primarilyregionalpolicymeasuresintendedtosupplementortostrength­
entheapplicationofotherCommunitypolicies,ortocorrectanyadverse
regionaleffectstheymayhave.Thegeographical scopeoftheseactions
dependsonthelocationoftheindustriesatwhichCommunitypolicies
aredirectedandtherelativeintensityofregionalproblems.
Consequently therearenogroundsforanaprioridistribution between
MemberStatesofEREFresourcesavailableforthispurpose.

-14-
(i)Theproblems
38.ThesetwotypesofactionbytheERDF–generalsupportandspecific–
areintendedtocopewithfourtypesofregionalproblemsatpresent
facingtheCommunity :
–theunder-development ofanumberofregions,which,despitesus­
tainedefforts,stilllagwellbehindandwhichwillrequiremassive
Communityaidforalongtimetocome;
–theindustrialoragricultural changes,whichhaveappearedinthe
lastquarterofacenturyinnumerousregionsoftheCommunity,
requiremeasuresofdevelopment andreconversion towhichtheComm­
unitymustcontribute,butcertainlyforashortertimeandina
lessintensiveway;
–thecurrentorexpectedproblemscausedinsomeregionsbythe
changeinworldeconomicstructuresorbyexistingorfuture
CommunitypoliciesandcallingforaCommunitycontribution each
timetheeffectsrfeachacertainscale;
–thespecialproblemsoffrontierregions.
(ii)Locationoftheproblems
39*ThefirsttypeofproblemconcernstheMezzogiorno ,Ireland,Northern
Ireland,GreenlandandtheFrenchoverseasdepartments.Takentogether,
theseregionshave26millioninhabitantsandtodatehavereceived55$
ofERDFassistance.ThesearetheregionsoftheCommunitylagging
furthestbehind;geographically theyarelocatedontheCommunity's
periphery,whichisanadditionalobstacletotheirintegration.
Communityassistanceisthemorejustifiedsince,insomecases,the
MemberStatesconcerneddonothavethefinancialcapacitytosolvethis
problemfromtheirownresources.
ThetaskoftheCommunityislorgterminthisfirstcategoryofregion
andconsistsmainlyinacceleratingtheirdevelopment ,togivetheregion
aneconomicbase,bothintheformofinfrastructure andofaproduct­
ivesystemwhichwillenablethemtobecomemorecompetitive andto
integrateintotheCommunity.Moreover,astheEuropeanParliament

-15-
hasstressed,theCommunityoughttobeinapositiontoassistthose
regionsintheprovisionofsocialinfrastructure ,educationandvocat­
ionaltraining,insofarasthesecontributedirectlytoregionaldev­
elopment,sincethehighcostandlackofimmediatereturnisaheavy
chargeontheMemberStatesconcerned.
40.Thesecondtypeofproblemconcernsregions,whichhaveexperienced
development andconversionproblemsformanyyearsduetostructural
changesinboththeindustrialandagricultural sectors,andwherethe
problems,becauseofseriousunderemployment ,aresosubstantialthat
theyaffecttheproperfunctioningoftheCommunity.Inthiscasethe
Communitycontributionistosupportandintensifydevelopmentefforts
inagriculturalregionsandtheadaptationsneededinindustrialregions,
particularly byinfluencingtheflowofinvestment.
Theseregions,andthosedescribedintheprecedingparagraph,correspond
largelytothepriorityregionsandareaseligibleforFundassistance
underthepresentregulation.
41.Thethirdtypeofproblemisfoundinregionswhoseproblemsareintensi­
fiedbythechangesinworldeconomicstructuresorbytheimplementat­
ionofcertainCommunitypolicies.Theactualorestimatedregional
impactofthesechangesorpoliciescanbeassessedparticularly by
meansoftheRIAs.TheCommunitymustactinthoseregions–provided
theMemberStateconcerneddoeslikewise–throughCommunityregional
policy,eitherbysupplementary measurestofacilitatetheapplication
ofthesepolicies,orbymeasurestocorrectanyadverseeffectswhen­
evertheconsequences aresuchastoaffecttheproperfunctioningof
theCommunity.
42.ThefourthtypeofproblemislocatedinCommunityfrontierregions}
theygenerallyfeeltheeffectsofintegration mostacutelyandso
problemsofdevelopmentorconversionoftenarise.

-16-
(iii)lypesoffinancialassistance
43.Theseriousness ofunderdevelopment inregionsfacingthefirsttypeof
problemrequiresprolongedfinancialassistancefromtheCommunity.The
resourcesavailableherewouldfallwithinthequotasectionofthe
ERBF.Ineachcountryconcernedtheseregionsshouldreceiveannually
fromthissource,acontribution atleastequal,inrealvalue,tothe
contribution reservedforitinthepreviousyear.
44*Thesameguaranteeshouldapplytotheregionsfacingthesecondtypeof
problem,itbeingunderstoodthatthesituationofthoseregionswillbe
thesubjectofperiodicalexaminationwithintheframeworkofthetwo-
yearlyreport(cf.18).Ifitshouldappearthattheproblemsofoneof
theseregionsarenolongeronsuchascaleastoaffecttheproper
functioning oftheCommunity,andinparticularthattheregionnolonger
hasagraveshortageofemployment,itwillnolongefrreceiveaguarantee
ofERDPassistance.Itmay,iftheneedarises,receiveanERDFcontri­
butionunderitsspecificactions.
45*ERBFassistancedirectlylinkedtothechangesinworldeconomicstruct­
uresortotheapplication ofcertainexistingorfutureCommunity
policieswouldcomefromthenon-quotasection.Anaprioridis­
tributionoftheresourcesavailablebetweenMemberStatesisexcluded
asallregionsoftheCommunitymaybeaffectedbytheseproblems.
Indeed,thenature,locationandsizeofthistypeofregionalproblem
dependsonthepolicyconcerned,onthetypeofmeasureenvisagedandon
thegeneraleconomicsituationatthetimethepolicyisapplied.As
Communitypoliciesgraduallydevelop,thesespecificactionswillbecomea
moreandmoreimportantpartofalltheEREF'sactions.
46.Asforthefrontierregions,thereisalsonoreasontoprovideforan
aprioridistribution ofFundresourcessince,inviewofthenatureof
theproblems,therearenogroundsforsuchasystem.Assistancefrom
theFund,therefore,wouldcomefromthenon-quotasection.
••/•••

-17-
(iv)Useoftheappropriate financial instruments
47.Toensure that ithasthemaximum impact ,theEREF will ,however ,have to
concentrate itsefforts onthemost acute regional problems ;tothis end ,
priorities will have tobedetermined progressively atthelevel ofeach
region inaprecise way ,following inparticular theanalysis andassess­
ment ofthesocial andeconomic situation oftheregions .
AttheBame time ,theFund should tailor theassistance itprovides to
thenature andgravity oftheproblems tobesolved .Thus Community ass­
istance forregional development purposes will take theform ofgrants ,
orloans andguarantees ,or,ifnecessary ,anappropriate combination of
these .Tothis end ,provision hasbeen made forintroducing within the
ERKP ascheme forinterest rebates .onCommunity loans (ETB,ECSC,EEC ).
Moreover theCommission isexamining thescope forhelping solve the
problems ofrisk capital .firms face ,using existing national regional
development agencies ...asintermediaries .These newinstruments will mainly
concern small andmedium-sized enterprises .
Inaddition ,therate ofCommunity participation will vary ,thehighest
rates being reserved fortheregions lagging furthest behind .On-lent
loans will beavailable inalltheregions eligiblei forEREF assistance
buttheinterest rate rebate will vary with thetype ofproblem tobe
solved .
48.EHDF assistance isforboth investment ininfrastructure which cancon­
tribute toregional economic development andtoimproving thequality of
life ofthepopulation concerned andinvestments which aredirectly
productive ,both inthemanufacturing andservice sectors .Forthe
services sector ,itisplanned tocalculate EREF assistance onthebasis
notonly ofinvestment expenditure butequally ofjobs created .Event­
ually theright balance should befound between aidforinfrastructure
investment andaidforinvestment that creates jobs directly .
Inorder toplay aneffective role insolving thedifferent types of
regional problem ,theCommunity will finance priority projects orgroups
ofprojects which contribute most todevelopment orreconversion ;these
priorities will besetbyregion onthebasis ofregional development
programmes andinthelight ofCommunity aims andrules .
/

-18-
49.Twodistinctcategoriesofregioncorrespondtothefirsttwotypesof
problemmentionedabove*Thethirdandfourthtypesofproblemmay
occuroutsidethesetwocategoriesofregion,"butinmostcaseswill"be
locatedinsidethem.
Consequently ,oneandthesameareamay"befacedwitheitheranunder>-
developmentorareconversion problem,andoneachofthesemayhe
superimposed problemsarisingfromchangesinthestructureoftheworld
economy,theapplicationofCommunitypoliciesandthearea'sfrontier
situation.Toeachoftheseproblemsthereisacorresponding ERDF
action–supportorspecificmeasures–whichbytheircombinedeffects
willhelptosolvethedifferenttypesofproblemsfacingthearea.
Therefore,certainregionsorareasoftheCommunitywillqualifyfor
ERDFassistancefromboththequotaandthenon-quotasections.Insuch
casestheprinciplesgoverningcoordination ofregionalaidsmustbe
compliedwith.
50.Thebasisforusingtheresourcesofthenon–quotasectionoftheERDF
willbethegravity,scaleandurgencyoftheregionalproblemswhich
threatentoappearorworsen,asthestructureoftheworldeconomy
changesorCommunitypoliciesareapplied.
TheuseofallERDFresources–quotaandnon-quota
sections–mustbedirectedtowardstheharmoniousdevelopment ofeconom­
icactivitiesintheCommunity.
Becauseoftheirfinancialimplications ,theseproposalscouldgiverise
toaconsultation betweentheEuropeanParliament andtheCouncilwith
theassistanceoftheCommission,followingtheprocedureprovidedforin
the"CommonDeclaration "ofthesethreeinstitutions of4thMarch1975*
/.

-xy-
("b)Thepossibleuseofloans
51,TheBcaleanddiversityoftheregionalproblemsfacingtheCommunity
andtheMemberStateswillrequireconsiderable financialresourcesfor
severalyears.InviewoftheCommunity'sbudgetarylimitations,a
substantialincreaseinresourcesforCommunityregionalpolicy,one
inproportiontoitsobjectives,seemsunlikely.
52.Aspartofitsworkontheemploymentofloanstofinanceinvestment,
theCommissionwillsoonsubmititsviewsonthepossibilities ofusing
theseresourcesforregionalpolicy,suchasitisdefinedinthe
presentdocument.

–£ÎU–
F.Information
53.Theregionalinformation campaign,alreadyundertakenwithintheframe­
workofCommissioninformationpolicyandconcerninginparticularthe
ERDF,isaimedprincipallyatthegeneralpublic;itwillbecontinued.
54.Inaddition,theoutcomeofCommunityregionalstudieswill"bepublic-
isedmoresystematically .Moreover,regionalstudiesjointlyfinanced
"bytheCommissionandMemberStatescanprovidetechnicalassistancefor
theregions.Inparticulartheyarerelevanttothepreparation of
regionaldevelopment programmes andtheco-ordinated useofthefinancial
instruments oftheCommunityandtheMemberStates.
55.Forthebenefitofpotentialinvestorsandthoseresponsibleforregional
development ,theCommissionwillprepareapublicationsettingout,
accordingtoanagreedoutline,theaidsystemsandotherbenefits
availableinthedifferentmembercountries.TheCommissionwillspell
outthepriorities andtheinstruments ofCommunityregionalpolicy.
Thispublicationwillbebroughtuptodateperiodically .
•·I···

-21-
IV.FUTUREOUTLOOK
56.Communityregionalpolicyisapermanenttask.Therefore
itisaprocessofchange,whichimpliescontinualredefinition ofits
aimsandstages,bothintheMemberStatesandatCommunitylevel.The
guidelineselaboratedinthiscommunication shouldgovernactivityin
thecomingyears.
Thesegoverningprinciplesconcernawiderangeofregionalproblems
whicl*indifferentwaysaffectthewholeoftheCommunity'sterritory.
Theirmainpurposeistoreduceexistingregionalinequalities andto
anticipatetheemergenceofnewproblemslinkedtothechangingstructure
oftheCommunity'seconomy.
57*ThechangesforecastwithintheCommunitycallfortheintroduction ofa
developmentstrategywhichwillintroduceintoallCommunitypolicies
thespatialdimensionoftheproblemstobesolved.Regionalpolicywill
contributeinthiswaytoensuringconsistencyofpoliciesandmeasures
acrossthewholerangeofCommunityeconomicactivity.Tocarryoutits
responsibilities withrespecttothepastandthefuture,theCommunity
mustequipitselfwithadequatetoolsofanalysisandassessmentand
meansofactionwhicharesuitedtothenatureandextentoftheregional
problemstobesolved.Theseresponsibilities willleadtoastrength­
eningofregionalpoliciesineachMemberState,greateroo-ordination
ofthese,andthedevelopmentoftheCommunity'sownactivities.
58.Thesizeofthistaskrequiresabodyabletoidentifyregionalproblems
inalltheiraspectsandtoindicatetheguidelinesforco-ordinated
jointactionbytheMemberStatesandtheCommunity.TheCommission
considersthataconsultation betweentheinstitutions oftheCommunity,
theMemberStates,thesocialpartnersandtheregionalandlocal
representatives isnecessary.Itwillmakeproposalsonthisatthe
momentoftheCouncil'sdiscussions onthebasisofthepresent
document.
••/•••

22
59•ThefinancialresourcesofCommunityregionalpolicymusttherefore "be
coordinated soastosupportbothnationaleffortsandtheCommunity^
ownactivity.Thisdoublerequirement impliesthedevelopment offin­
ancialresources,inparticularbyasuitablepolicyonloans,andthe
specification inthebudgetofwhetherresourcesareusedassupportfor
nationaleffortsorfortheCommunity'sownmeasures.
6D.TheCommunitywillbeconfrontedinthenearfuturebytheproblemsof
enlargement .Anoverallexaminationofthesituationmustbemadein
ordertoassessthenatureandextentoftheseproblems.Inthis
regionalpolicy,amongothers,shouldbegivenitsproperweight.
Communityregionalpolicyasdefinedinthispapershouldenableall
thecountriesconcernedtoworkoutthesolutionsneeded.Inthis
respect,thedrawingupofgeneralguidelinesfortheCommunityinthe
fieldofregionalpolicyisanessentialstepinpreparingtheCommunity
oftomorrow.

ANNEXI
PROPOSALFORCOUNCILDECISION of
AMENDINGCOUNCILDECISION
-74/120/EECof18February1974
ontheattainmentofahighdegreeofconvergenceofthe
economicpoliciesoftheMemberStatesoftheEuropean
EconomicCommunityand
-75/185/EECof18March1975
settingupaRégionalPolicyCommittee

EXPLANATORY MEMORANDUM
UnderArticle2paragraph2oftheRegulation(EEC)No.724/75ofthe
Councilof18thMarch1975(l)iestablishing aEuropeanRegional
Development Fund,theCommissionisrequiredtomakeinduetime
appropriateproposalsfortheCommunity'sregionalpolicy,atthemoment
ofthere-examination ofthisRegulationto"bemadebefore1stJanuary
1978*Theseproposalsaresetoutin"GuidelinesforCommunityRegional
Policy"whichtheCommissionsubmitstotheCouncil.
IntheseguidelinesitisplannedthattheCommissionsubmittothe
Counciladraftreportonsocialandeconomictrendsintheregionsof
theCommunityeverytwoyears,beginningin1979*AfterthistheCouncil
will,sifterreceivingproposalsfromtheCommission,setthepriority
objectivesofregionaldevelopmenttopursueatCommunitylevel,andthe
resultingguidelinesfornationalandCommunityregionalpolicies.
Thisprocedureshouldbeinsertedinthatfortheannualreportonthe
economicsituationintheCommunityprovidedforinthedecisionofthe
Council(EEC/l20/74)of10thFebruary1974ontheattainmentofahigh
degreeofconvergence oftheeconomicpoliciesoftheMemberStatesof
theCommunity(2).Thisprovidesforthepreviousconsultation ofthe
EuropeanParliamentandtheEconomicandSocialCommittee.Inaddition,
thedraftofthetwo-yearlyreportpreparedbytheCommissionshouldbe
accompanied bytheopinionoftheRegionalPolicyCommitteewhichhas
beengiven,amongotherresponsibilities ,thatofexaminingproblems
relatingtoregionaldevelopment,theprogressmadeortobemadetowards
themandregionalpolicymeasuresnecessarytofurthertheachievement of
theCommunity'sregionalobjectives.Theaimofthepresentproposalfor
adecisionistospecifytheproceduretofollowinthismatter.
(1)O.J.No.L73of21stMarch1979
(2)O.J.No.L63of5thMarch1974

-25-
PROPOSAL FORCOUNCIL DECISION
OP ,
amending Council Decisions 74/120/EEC
of18February 1974 ontheattainment ofahigh
degree ofconvergence oftheeconomic policies
oftheMember States oftheEuropean Economic
Community and
75/185/EECof18March 1975
setting upaRégional Policy Committee
THECOUNCIL OFTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Economic Community ,
andinparticular Article 145thereof ,
Having regard totheproposal from theCommission ,
Having regard totheOpinion oftheEuropean Parliament ,
Having regard totheOpinion oftheEconomic andSocial Committee ,
Whereas theCouncil ,onaproposal from theCommission ,should adopt
every twoyears ,onthebasis ofabiennial report onsocial andeconomic
trends intheregions oftheCommunity ,theguidelines tobefollowed by
each Member State andbytheCommunity intheir regional policies ;
Whereas this procedure should beincluded inthat already laid down in
Council Decision 74/l20/EECof18February 1974 ontheattainment ofa
high degree ofconvergence oftheeconomic policies oftheMember States
oftheEuropean Economic Community ^^f
Whereas theopinion oftheRegional Policy Committee should besought
onthepreliminary draft ofthereport prepared bytheCommission ,
HAS DECIDED ASFOLLOWS :
^'0JNoL63,5.3.1974 ,P.16.

-2b-
Article1
ThereisherebyaddedafterArticle4ofDecision74/120/EECthe
followingArticle4a:
"Article4a
Onceeverytwoyears,startingin1979on"theoccasionofthethird
examinationreferredtoinArticle4,theCouncil,onaproposalfrom
theCommissionandafterconsultingtheEuropeanParliamentandthe
EconomicandSocialCommittee,shallapprovea"biennialreportonthe
socialandeconomictrendsintheregionsoftheCommunityandshall
adopttheguidelinesto"befollowedbyeachMemberStateandbythe
Communityintheirregionalpoliciesforthefollowingtwoyears."
Article2
ThereisherebyaddedtoArticle2ofDecision75/l85/EEC^'the
followingparagraph3:
"3.Everytwoyears,theCommitteeshalldeliveranopiniononthe
preliminarydraftofthereportonsocialandeconomictrendsinthe
regionsoftheCommunity,preparedbytheCommission ,whichshallaccom­
panythedraftreportsubmittedbytheCommissiontotheCouncilin
accordancewiththeprocedureinCouncilDecision74/l20/EECof
18February1974ontheattainmentofahighdegreeofconvergenceof
theeconomicpoliciesoftheMemberStatesoftheEuropeanEconomic
Community."
Brussels,
FortheCouncil,
ThePresident
JlfoL73,21.3.1975,P.47.

-27-
ANNEXII
PROPOSALFORCOUNCILREGULATION (EEC)
No of
AMENDINGREGULATION (EEC)No724/75
ESTABLISHING AEUROPEANREGIONALDEVELOPMENT FOND

-28-
EXPLANATORY MEMORANDUM
1.TheEuropeanRegionalDevelopment Fund/hereinafter referredtoas
"theFund"/wasestablished byRegulation (EEC)No.724/75ofthe
1)Councilof18March1975.Article18ofthatRegulationprovides
foritsreviewbytheCouncil/onaproposalfromtheCommission/
before1January1978.
Accordingly/TheCommissionissubmittingtotheCouncilaproposal
foramendmentstotheFundRegulation which/onthebaisoftheexperi­
encegainedinthelasttwoyears/aredesignedtoenablethisfinan­
cialInstrumenttobeadaptedtothenewrequirements oftheCommunity
regionalpolicydefinedinthe"GuidelinesforCommunityRegional
Policy"containedintheCommission Communication totheCouncil.
2.Themainproposedamendments concernthedifferentiation ofthekinds
ofassistance providedbytheFund/therulesgoverningthisassis­
tanceandtheprocedural rules.TheyconcernthefollowingArticles
oftheregulation :
-thedefinitionoftwomainclassesofmeasureeligibleforFund
assistance/namelyCommunitymeasurestosupportregionalpolicy
measuresadoptedbytheMemberStates/andspecificCommunity
regionaldevelopment measures(Article2);
-procedureforfixingtheappropriations totheFund(Article2);
-thedefinitionoftypesofinfrastructure eligibleforFund
assistance (Article4);
-theflexibility ofratesofcontribution fromtheFundinrespect
ofinfrastructure investment (Article4);
-thesimplification ofproceduresforgrantingcontributions from
theFundforsmallprojects(Article5);
-theadaptationofproceduresrelatingtoregionaldevelopment
programmes/annualinformation andstatistical summaries (Article6);
-accelerated paymentsfromtheFund(Article8);
-theadoptionofnewrulesconcerningthetimingofpayments
qualifyingforFundsupport(Article11); ./.
.1)OJNo.L93of21.3.1975

-29-
-thedefinitionoftheframeworkofnewspecificCommunityregional
development measures(Article13);
-newarrangements forfinancingstudies(Article13);
-thedetailedrulesgoverningtheprincipleofcomplementarity
(Article18).
DefinitionofthetwomaintypesofmeasurequalifyingforFundsupport
(Article2)
3.InaccordancewiththeguidelinessetoutinChapterIII,E(points37
etseq)oftheCommission'sCommunication totheCouncil,theFund
willnowprovidesupport:
-firstly,formeasuressupportingregionalpolicymeasuresadopted
bytheMemberStates.Thissectionissubjecttoadistribution of
appropriations onthebasisofpre-established nationalquotas;
-secondly,toassistspecificregionaldevelopment measuresundera
sectionnotinvolvingnationalquotas.
ThisdistinctionisintroducedbyArticle2;thetwoclassesof
measurearecoveredbyTitlesIIandIIIrespectively oftheRegula­
tion.
Procedureforfixingtheappropriations totheFund(Article2)
4.Theamountoftheappropriations totheFundfortheperiod1975/77
isfixedbyArticle2(1)at1,300millionEUA.
From1978onwards,thenormalbudgetaryprocedurewillapplytofixing
oftheappropriations totheFund,i.e.thattheannualappropriations
fortheFundshouldbefixedeachyearwhenthegeneralbudgetofthe
EuropeanCommunitiesisadopted.
Inthisconnection,itshouldberecalledthatin1975Parliamentand
theCouncilagreedthatFundexpenditureafter1977wouldrankasnon-
obligatory.

-30-
Definitionofthenatureofinfrastructure eligibleforFundassis­
tance(Article4(1)(b)
5.Article4(1)(b)oftheFundRegulationstipulatesthatonlyinfrastruc­
tureInvestmentsdirectlylinkedwiththedevelopmentofindustrial,
artisanorserviceactivitiesqualifyforFundsupport.Aninterpre­
tativedeclarationrecordedintheminutesofthemeetingofthe
Councilof18March1975adds,however,that,exceptionally,theFund
mayalsotakepartinthefinancingofinfrastructure whichconstitutes
aprerequisite foractiontodevelopsuchactivities.
ExperiencegainedduringthefirsttwoyearsofoperationoftheFund
hasshown,firstly,thattheconceptsofinfrastructure "directly
linked"or"constituting aprerequisite "werenotalwayseasytodefine,
involvingpossibledifferences ofinterpretation betweentheCommission
andtheMemberStates,and,secondly,thatthebasicinfrastructure
equipmentneedsofthevariousregionsoftheCommunitywerenotcompa­
rableandvariedwidelyfromoneregiontoanother.
6.Accordingly,theCommissionisproposing,toenabletheFund'ssupport
tobetailoredmorecloselytothevaryingneedsoftheregions,that
moreflexibility shouldbeintroducedintothedefinitionofeligible
infrastructure .Forthispurpose,itissuggestedthattheconceptof
infrastructure "directlylinked"tothedevelopment ofproductive
activitiesshouldbereplacedbythatofinfrastructure "whichcontri­
butestothedevelopmentoftheregioninwhichitislocated".
Theregionaldevelopment programmescanbereferredtoinorderto
assess,foreachregion,whicharethesetypesofinfrastructure .
Flexibility ofratesofcontribution fromtheFundinrespectof
infrastructure investment (Article4(2)(b)
7.Fundparticipation inthefinancingofInfrastructure investmentis
fixedbyArticle4(2)(b)oftheFundRegulationat30%forprojects
costinglessthan10millionEUA,andbetween10and30%forprojects
costingmorethan10millionEUA.
8.Theseratesmaybevarieddownwardsbutnotexceeded.Thusitis
difficultunderpresentarrangements,tomakeCommunitysupport
measuresreallyselectiveandensurethattheyconstituteproper-.,
m/•

-31-
Incentivestoinfrastructure investmentwhichisparticularly necessary
fortheeconomicdevelopmentofcertainregions/andtheexecutionof
whichisliabletobehamperedordelayedbyshortageoffunds.
9.Accordingly/theCommissionisproposingthatitshouldbestipulated/
intheRegulation/thattherateofFundparticipation inthefinancing
ofInfrastructure projectsofspecialrelevancetothedevelopmentof
theregion1nwhichtheyarelocatedmaybeasmuchas50%.This
facilitywouldbeconfinedtoGreenland/theoverseasFrenchdepart­
ments/Ireland/theMezzogiorno andNorthernIreland/thesebeingthe
Communityregionshavingthemostseriousstructuraldifficulties to
contendwith.
Simplification oftheproceduresforgrantingFundassistanceforsmall
projects(Article5(2)
10.Thepresentarrangements stipulatethatthecontributions formtheFund
mustbeapprovedbytheCommissiononthebasisofasetofcriteria
enablingtheCommissiontoassesstherelevanceoftheprojectstobe
financedtothedevelopment oftheregioninwhichtheyarelocated/
aftertheFundCommitteehasbeenconsulted.
Projectscostinglessthan10millionEUAarecoveredbyglobaldeci­
sionsandprojectscostingmorethan10millionEUAarethesubjectof
Individualdecisions.
11.ExperiencegainedduringthefirsttwoyearsofoperationoftheFund
hasledtothefollowingconclusions :
-hardlyanyofthesmallprojects/whetherindustrialorinfrastruc­
tureprojects/haveraisedanyparticulardifficulties fortheFund
Committee;
-the10millionEUAthresholdabovewhichprojectsmaybethesubject
ofdetailedexaminationistoohighforcertainregionswhichdonot
havethepotentialtojustifythelocationortheexecutionofvery
largeInvestments;
-thepreparationofdraftdecisionstogototheCommittee(488deci­
sions1ntwoyearsconcerning 2728projects)Involvesaheavy
administrative burdenwhichtheCommissionhashadgreatdifficulty
1ndischarging. .7.

-32-
12.TheCommissiontakestheview/inthesecircumstances /thatthereisa
caseforsimplifyingproceduresforgrantingFundassistance,which
wouldfacilitatetheworkofboththenationaldepartments anditsown
staff,whileenablingatthesametimetheusefulnessoftheprojects
financedbytheFundtobeassessedmoreaccurately.
Forthispurposeitisproposing :
-thatthethresholdbeyondwhichprojectsareexaminedandarethe
subjectofacase-by-casedecisionshouldbeloweredfrom10million
EUAto5millionEUA;
-thatonlydraftdecisionsrelatingtoinvestments ofmorethan5
millionEUAshouldgototheFundCommitteeforanopinion;
-thatonlyfollow-upinformation shouldgototheFundCommitteeon
decisionsforassistancerelatingtoinvestments oflessthan5
millionEUA.However/theCommitteewouldstillhavetobeconsul­
tedinrespectofdraftsproposingnegativedecisions/wheneverthe
MemberStateconcernedsorequested/andforanydraftdecision
inrespectofwhichtheCommissionfeelsthataCommitteeopinion
wouldbeuseful.
Usingthisprocedurewouldhavecutfrom488toabout200thenumberof
draftdecisionslaidbeforetheFundCommitteein1975and1976.
Adaptationofproceduresrelatingtoregionaldevelopment programmes,
annualinformation/andstatistical summaries (Article6)
13.TheamendmentstotheFundRegulationproposedbytheCommissionare
designedto:
(a)adaptthetextofArticle6tothefactthattheCommissionwill
normallydisposeoftheprogrammesbytheendof1977;
(b)enabletheCommissiontobeinformed/earlyintheyear,ofthe
prioritiesselectedbytheMemberStatesinrespectoftheimple­
mentationoftheprogrammes/andmorespecifically oftheir
budgetarycommitments.Thisisnecessitated bythefactthatthe
programmesgenerallyconcernperiodsvaryingbetweenthreeand
fiveyears/andnotalltheMemberStatesupdatethemulti-year
programmesannually.Theannualinformationrequirementisthere­
foreretained/butitscontentisadaptedtothisspecificup­
datingfunction;

-33-
Cc)givethetextconcerningthestatisticalsummariesamorespecific
content,andtopostponethedateof1Aprilto30June,since
certainMemberStateshavehaddifficultyincomplyingwiththe
originaldeadline.
Acceleration ofFundpayments(Article8(3))
14.Anessentialaspectoftheeffectiveness oftheFund'scontribution to
regionaldevelopmentisthatitspaymentsshouldbemadepromptly.The
timingofpaymentsdepends,however,onthatofthepaymentofthena­
tionalaidswhichhavebeenthebasisofthecalculation oftheFund's
support,andthesearedisbursedonlyasandwheneachpartofthework
iscompleted.TheemphasiswhichtheCommissionhasonseveralocca-
1)sionsplacedontheneedtofinancenewprojectsisliable,inthese
circumstances,toslowdowntransferstobackwardregions.
15.TheCommissionisthereforeproposingthat,incertaincircumstances ,a
schemeforadvancepaymentsshouldbeintroducedwhichwouldensurea
regularandpromptflowoffundstothequalifyingregions.
Adoptionofnewrulesconcerningthedateafterwhichpaymentsquali­
fyingforFundsupportmusthavebeenmade(Article11)
16.TheFundRegulationstipulatesthatallpaymentsafter1January1975
maybereferredtoforthepurposeofFundsupport.
17.Thesearrangements meanthattheFundmayprovidesupportforrelative­
lyoldprojects,evenprojectswhichhavebeencompletedbythatdate.
TheCommissionfeelsthatwhilethisfacilitycouldbejustifiedwhen
theFundwasstartingup,atthetimewhentheeffectiveworkingof
financialtransferstothebackwardregionshadtobegotunderway,
thisisnownolongerthecase:theFundcanactasagenuineincen­
tiveforthecreationofnewinvestment andthereforenewjobsonly
insofarasitsassistanceconcernsprojectsforwhichthebulkofthe
workhasstilltobecarriedoutatthetimewhentheapplication for
assistancegoestotheCommission.
./.
1)Forexample,intheFund'sannualreportsfor1975and1976.

-34-
Withaviewtothisobjective,theCommissionproposesthatonly
paymentsmadebyMemberStatesafterthedateofsubmissionofthe
ammocationforassistanceshouldbereferredtoforthepurposesof
Fundsupport,andconcerningInvestmentsthathavenotbeencompleted
onthatdate.
Definitionoftheframeworkofnewspecificregionaldevelopment
measures(Article12)
18.ThenewspecificCommunityregionaldevelopment measureswhichthe
FundwillbesupportingmustenabletheCommunitytoprovidethedri­
vingforcetoforestalltheregionalimbalancesliabletooccurasa
resultofchangessuperveninginworldeconomicstructuresorof
measurestakenbytheCommunityunderitspolicies.
Forthispurpose,Article13givesalist,whichisnotexhaustive,of
thetypesofmeasurewhichtheCommunitycouldundertake,thesebeing
mainlymeasurestobackuporstrengthenotherCommunitypolicies,or
measuresmadenecessarybychangesinworldeconomicstructures.
19.Theproceduresfortheimplementation ofthespecificmeasureswouldbe
adoptedcasebycasebytheCouncil,ontheproposalsfromtheCommis­
sion,Parliamenthavingbeenconsulted.
Newarrangements forfinancingstudies
20.TheCommissionproposestomodifytheexistingarrangements topermit
ittotaketheinitiativewithstudiesthatareincloserelationwith
theoperationsoftheFund.ItisforeseenthattheFundcouldfinance
upto100%ofthesestudiesandthattheRegionalPolicyCommitteebe
consultedineachcase.
Arrangements forimplementing theprincipleofcomplementarity
(Article18)
21.TheeleventhrecitaloftheFundRegulationstatesthat:
"WhereastheFund'sassistance shouldnotleadMemberStatestoreduce
theirownregionaldevelopmenteffortsbutshouldcomplementthese
efforts."

-Û3-
22.TheCommissionhasemphasisedonseveraloccasionstheneedfor
compliancewiththisprinciple/whichisfundamentaliftheFund's
supportistomakeanyrealcontribution tothesolutionofthe
problemofregionaldisparities.Theprinciplecanbeappliedintwo
ways:inthefirstplace/theCommunity'saidcanbeaddedforeach
investmenttotheaidgrantedbythenationalauthorities;secondly/
thefinancialresourcesderivingfromtheFundcanbeaddedglobally
totheMemberStates'expenditure onregionaldevelopment/thus
enablingthemtospeedupandincreasetheireffortsinthisfield.
23.ThefirstpossibilityislefttothediscretionoftheMemberStates.
Whentheydonotuseit/theCommissiontakestheviewthatarrange­
mentsmustbemadetoensuresupervision ofthesecond;itproposes
inthisconnection (Article18)thattheMemberStatesshouldshow
separatelytheamountsreceivedfromtheFund/inparticularinthe
nationalbudgets/andinthoseofthepublicagencies/andthatthey
shouldsubmittotheCommission/atitsrequest/allrelevantinfor­
mationtobesufficienttoestablishthattheFund'sresourcesdoin
facthaveacomplementarity character.

-36-
ProposalforCouncilRegulation(EEC)No/77
of...amendingRegulation (EEC)No724/75
establishing aEuropeanRegionalDevelopment Fund
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle235thereof,
HavingregardtotheproposalfromtheCommission ,
HavingregardtotheOpinionoftheEuropeanParliament ,
HavingregardtotheOpinionoftheEconomicandSocialCommittee,
WhereasCouncilRegulation(EEC)No724/75of18March1975»establishing
aEuropeanRegionalDevelopmentFund^\createdaEuropeanRegional
Development Fundintendedtocorrecttheprincipalregionalimbalances
withintheCommunity;
WhereasArticle18thereofprovidesthatonaproposalfl>oratheCommission
theCouncilshallre-examinethesaidRegulationbefore1January1978;
Whereas,inviewoftheeconomicandsocialtrendsintheCommunityin
recentyearsandparticularly theeconomiccrisisresultingfromthe
increaseinthecostofprimaryproducts,itisclearthattheassistance
providedfromtheFundmustbediversifiedtoenableitbothtoprovide
assistanceforCommunityactioninsupportofregionalpolicymeasures
takenbytheMemberStatesandalsotoassistspecificCommunityregional
development measures,infavourofregionsexperiencing problemsof
restructuring andofreconversion ;
WOJL73,21.3.1975,p.l.

-s-
Whereas,inparticular,itmustbepossibletoextendthegeographical
scopeofFundassistancetoregionsorareasotherthanthoseestablished
bytheMemberStatesundertheirregionalaidsystems;
WhereasthegeneralframeworkinwhichthesespecificCommunityregional
developmentmeasureswillsubsequently beadoptedandimplementedshould
belaiddown;
Whereasthespecialcharacteristics ofGreenland,oftheFrenchoverseas
departments ,ofIreland,oftheMezzogiorno andofNorthernIreland
justifyFondparticipation inthefinancingofinfrastructure investments
uptoarateof50$?
Whereastheexperiencegainedinthefirstthreeyearsofoperationof
theFundpermitsthedecision-making proceduresforFundassistanceto
besimplified ;
Whereastheprovisionsrelatingtoregionaldevelopment programmes ,to
annualinformation andtostatistical sujiimariesmustbeadaptedtothe
changesthathavetakenplace;
Whereasanacceleration ofthearrangements forpaymentfromtheFund
wouldfacilitatethecarryingoutoftheinvestmentsbenefitingfrom
theFund;whereastheintroduction ,oncertainconditions,ofascheme
foradvancepaymentstotheMemberStateswillenablethisobjectiveto
bemet;
Whereasthedetailedrulesforensuringthecomplementary character
oftheassistanceprovidedfromtheFundshouldbespecified,
HASADOPTEDTHISREGULATION :
Article1
Regulation(EEC)No724/75isherebyamendedassetoutinthe
followingArticles*
./

Article'2
Article 1shall read asfollows :
"TheEuropeanRegionalDevelopment Fund/hereinafterreferredto
as'theFund',1sIntendedtocorrecttheprincipalregional
ImbalanceswithintneCommunity".'
Article3
InArticle 2:
Paragraph 1shall read asfollows :
"Asfromthebudgetaryyear1978/theallocationfortheFund
shallbedeterminedannuallybythebudgetoftheEuropean
Communities".
Paragraph3shallbecome Paragraph2*
Paragraph 3shall read asfollows :
ThefollowingmaybefinancedbytheFundwithaviewto
contributingtotherealisationoftheobjectivereferredto1n
Article 1:
a.Communityaotioninsupportofregionalpolicymeasurestaken
bytheMemberStates/asprovidedforInTitleIIofthis
Regulation.
TheresourcesoftheFundIntendedforfinancingtheseacti­
vitiesshallbedistributedinaccordancewiththefollowing
table:
Belgium
Denmark
France
Ireland
Italy
Luxembourg
Netherlands
FederalRepublicofGermany 6.4%
UnitedKingdom 28.OX
There shall beallocated toIreland afurther sumcalculated
soastoensure that itreoeives anextra 0.5$ ,whioh
shallbedeductedfromthesharesallocatedtotheother
MemberStates,exceptItaly. ./.1.5%
1.3%
15.0%
6.0%
40.0%
0.1%
1.7%
6.4%
28.0%

-<y_
b.SpecificCommunityregionaldevelopmentmeasures^asprovided
for1nTitleIIIofthisRegulation.
ThewholeoftheFund'sresourcesorfinancingthesemeasures
shallbeusedhavingdueregardtotherelativeIntensityof
regionalImbalancesasshownby,1nparticular/thefollowing
Indicators :
thetrendofunemployment rates1ntheregionsduringthe
precedingfiveyears;
theproportionoftheactivepopulationoccupied1nagri­
culture;
theproportionof theactivepopulationoccupiedin
decliningIndustrialsectors;
themigration "balanoeoftheregionsduringthe
preoedingfiveyears}
thedevelopment andthelevel.ofthegrossdomestic
product"
•Article4
Article3shallreadasfollows:
"1.RegionsandareaswhichmaybenefitfromtheFundshallbelimitedto
thoseaidedareasestablished byMemberStates1napplyingtheir
systemsofregionalaidsandinwhichStateaidsaregrantedw1ch
qualifyforFundassistance.
2.TheFundmaygive-assistanceasportofthemeasuresreferredto
Artiole2(3)(h),.toregionsandareasotherthanthose .•
referredtoinparagraph 1,providedthattheMemberStateconcerned
alsogivesassistance•"
Article5
InArtide4:
1.Thereshailbeinsertedat-thestartofthefirstsentenceof-
paragraph1thefollowingwords:
/•./.

"AspartofCommunityactioninsupportofregionalpolicy
measurestakenbytheMemberStates,"
Inthesamesentencetheword"European"shallheadded
beforethewords"unitsofaccount".
Theendofthefirstsentenceofthefirstsub-paragraph ofparagraph
l(a)shallreadasfollows:
"providedthatatleast10jobsarecreatedormaintained,"
Thereisaddedtoparagraph1(a),athirdsub-paragraph asfollows:
"ForthepurposesofthisArticle,agroupofinvestments which
arerelatedgeographically andfinancially ,andwhichtogether
complywiththecriteriaprovidedforinthisArticle,maybe
consideredasasingleinvestmentinthefieldofhandicraft
ortourism."
Paragraph1(b)shallreadasfollows:
"b.Investments ininfrastructure whichcontributes tothe
developmentoftheregioninwhichitislocated,financed
whollyorinpartbypublicauthorities orbyanyother
agencyresponsible ,onasimilarbasisasapublicautho­
rity,forthecreationofinfrastructure ."
Inthefirstsub-paragraph ofparagraph2(a)theword"European"shall
beaddedbeforethewords"unitsofaccount"ineachcase.
Thereshallbeaddedafterthefirstsub-paragraph ofparagraph2(a),
thefollowingnewsub-paragraph :
"Inthecaseofservices,bywayofderogation fromthepre­
cedingsub-paragraph ,theFund'scontribution mayexceed20$
oftheinvestmentcost,providedthattheamountdoesnot
exceedinsuchacase10000Europeanunitsofaccountper
jobcreatedormaintained,or50$ofthenationalaids."

-ttJ.-
7.Afterthefirstsentenceofthesecondsub-paragraph ofparagraph
2(a),thereshallbeaddedthefollowingsentence:
"Theseaidsmayincludeaidspaidtoundertakings inconnection
withthetransferofworkers."
8.(LinguisticchangenotconcerningEnglish-language version),
9.Inthethirdsentenceofthesecondsub-paragraph ofparagraph2(a),
thewords"offactories"shallread"of"buildings,includingplant."
10.Paragraph2(b)shallreadasfollows:
"b.Inrespectofinvestmentscoveredbyparagraph1(b),30$ofthe
expenditureincurredbypublicauthorities whentheinvestmentis
lessthan5millionEuropeanunitsofaccountandfrom10$toa
maximumof30$forinvestmentsofnotlessthan5millionEuropean
unitsofaccount.However,forprojectswhichareofparticular
interestforthedevelopmentoftheregioninGreenland,inthe
Frenchoverseasdepartments ,inIreland,intheMezzogiorno and
inNorthernIreland,themaximumratemaybe50$*
Article6
InArticle5*
1.Inthefirstsentenceofparagraph1thewords"inaccordancewith
theprocedurelaiddowninArticle12"shallbedeleted.
2.Paragraph1(b)shallreadasfollows:
"b.theconsistencyoftheinvestmentwiththeCommunityregional
policyguidelinesandpriorityregionaldevelopmentobjectives
derivingtherefrom,andwithanyotherCommunitymeasures."
./

-42-
3.Paragraph 2shallreadasfollows:
"2.a.Inrespectofinvestmentprojectscostingmorethan5million
Europeanunitsofaccount,theFund'sassistanceshallbethe
subjectofaCommissionDecisionundertheprocedureprovided
forinArticle15;
b.Forinvestmentprojectscostinglessthan5millionEuropean
unitsofaccount,theCommissionshallinformtheFundCommittee
ofDecisionstaken.TheprocedureprovidedforinArticle15
shall,however,applyinthecaseof
-draftnegativedecisions,wheretheMemberStatesorequests;
-allotherdraftdecisionsinrespectofwhichtheCommission
wishestoreceiveanOpinionfromtheFundCommittee."
Article7
InArticle6:
1.Paragraph 1shallreadasfollows:
"1.Investments maybenefitfromtheFund'sassistanceonlyifthey
arepartofaregionaldevelopment programmetheimplementation
ofwhichislikelytocontributetothecorrectionofthemain
regionalimbalanceswithintheCommunitywhichmayimpairthe
properworkingoftheCommonMarketandtheconvergingtrendof
theMemberStates'economies,withaview,inparticular ,tothe
attainmentofeconomicandmonetaryunion.
2.Paragraph2shallreadasfollows:
"2.Regionaldevelopment programmesshallbeestablishedaccording
tothejointoutlinepreparedbytheRegionalPolicyCommittee^^•"
3.Inparagraph3,thewords"alterationstheretoasandwhentheyare
drawnup"shallread"alterations madetotheprogrammesalready
notified".
(-1'OJNoC69,24.3.1976,p

-43-
Paragraph4shallreadasfollows:
TheRegionalPolicyCommitteeshallbeconsultedwithregardto
theprogrammes.TheCommissionshallexaminetheseprogrammesin
thelightoftheguidelines,prioritiesandotherCommunity
measuresreferredto1nArticle5(1)(b).Itshalldetermine
prioritieswithinthisframework".
Paragraph 5shallreadasfollows:
Before31Januaryeachyear,MemberStatesshallbringthe
regionaldevelopmentprogrammesuptodatebyprovidingtheCommis­
sionwithallrelevantInformationforthecurrentyearnotcon­
tained1ntheprogrammeson:
(a)tiefinancialresourcesallocatedtoregionaldevelopment
under .theirprogrammes;
(b)theprioritymeasuresonregionaldevelopmentwhichtheyintend
toImplement;
(o)theusetheyintendtomakeofCommunityresourcesand,in
particular,ofresourcesfromtheFund,inImplementingthese
prioritymeasures".
Paragraph6shallreadasfollows:
Before1Aprileaohyear,MemberStatesshallprovidetheCommission
withanoverall,statistical summaryindicating "byregionforthe
previousyear:
(a)theresultsachievedintheregion intermsof
investmentandemployment;
(b)thefinancialmeansemployed;
(c)theactualuseoftheresourcesoftheFund;
(d)thetotalofinvestmentscarriedoutandofinvestmentaids
grantedbythecentralandlocalauthorities,brokendownaccord­
ingtothemainfunctionsofthepublicauthority".

-44-
Article8
InArticle7:
1.Inparagraph 1thewords"inthelightofthecriterialaiddownin
Article5"shallread"inviewoftheprovisionslaiddownin
Articles5and6".
2.Inthefirstsentenceofparagraph2,theword"10"shallread"5",
andtheword"European"shallbeadded "beforethewords"unitsof
account".
3.Inparagraph2(b),thewords"itsdirectlinkwiththedevelopmentof
theactivitiesreferredtoinArticle4(l)(a)"shallread"its
contribution tothedevelopmentoftheregion".
4.Inthefirstsentenceofparagraph3,theword"10"shallread"5",
andtheword"European"shall "beaddedbeforethewords"unitsof
account"•
5.Inparagraph3(b),thewords"itsdirectlinkwiththedevelopment
oftheactivitiesreferredtoinArticle4(l)(a)"shallread"its
contribution tothedevelopmentoftheregion".
6.Inparagraph5»"theword"10"shallread"5",andtheword"European"
shallbeaddedbeforethewords"unitsofaccount".
Article9
InArticle8:
1.Paragraph1(a)shallreadasfollows:
"a.Forinterimpaymentrequests:
-theneuneoftheundertaking concerned,orforinfrastructures ,
thenameoftheresponsibleauthority,
-thelocationoftheinvestment ,
-totalpublicexpenditureincurredafterthedatereferredto
inArticle11andthatpartoftheamountforwhichpaymentis
requested,

-45-
-theamount ofpayment requested from theFund ,
-aforecast offuture payment requests ;".
2. Paragraph 1(b )shall read :
"b. forfinal payment requests ,alltheInformation referred tounder
(a)except the Last Indent ,and
-theamount actually Invested and adescription oftheinvest­
ments concerned ,
-thedate ofcompletion oftheinvestment ,
-thenumber ofjobs created ormaintained bytheinvestments
referred to1nArticle 4(1)(a),
-theamounts ofpublic expenditure ".
3.Paragraph 2shall "bedeleted *
4.Paragraph 3shall become paragraph 2*
5.Paragraph 3shall read asfollows :
"3. Advance payments maybegranted bytheCommission toaMember
State atthelatter 'srequest .They may notexceed one-third of
thetotal amount oftheaiddecision ,*ndmayconcern only the
expenditure provided forinthe first twoyears following the
beginning oftheexecution ofeach project forwhich anadvance
payment hasbeen applied for .Thebalance oftheaid
from theFund shall bepaid asandwhen thepayments aremade '
"bytheMember State relating tothat part ofthe Fund 'sassist­
ance notcovered bytheadvance payment ".
6.Inparagraph 4thewords "or,ifnecessary ,totheEuropean Investment
Bank "shall bedeleted .
Article 10
1.Intheseoond sub-paragraph ofArtiolo 9(l)thewords "or,where applicable bj
theEuropean Investment Bank "shall bedeleted *
./.

-46-
2.InArticle9(1)thereshallbeaddedthefollowingthirdsub-paragraph :
"MemberStatesshallrepaytotheCommissiontheamountofthe
Fund'sassistancethathasbeenpaid1nrelationtoanational
aidthathasbeenrepaidbytheinvestor".
3.InArticle9.(2)thereshall"beaddedthefollowingsecondsub-paragraph :
"TheyshallnotifytotheCommissionthosecasesreferredtointhe
firstsub-paragraph ofparagraph 1".
Article11
Articlel*f<shallbecomeArticle10.
Article12
ThesecondparagraphofArticle19shallbeoomeArticle11andshallread
follows:
"Article11
TheCommissionshalltakeIntoconsideration forFundassistance '
paymentsmadeby.MemberStatesafterthedateonwhichtherequest
forassistance1sreceivedbytheCommission,concerningInvestments
thathavenotbeencompletedbythatdate".
Article13
ThefollowingnewArticleshallbeaddedafterArticle11:
"Article12
.TheFundmayparticipate 1nfinancingspecificCommunityregionaldeve­
lopmentmeasureswhich1nwholeor1npartdifferfromtheactivitiesre­
ferredto•1nTitleIIandwhichconcerninparticular :
a.measuresrelatedtootherCommunitypoliciesorcomplementary
thereto,intendedtoreinforceortocomplementtheconvergent
effortsofCommunitypoliciestocorrectstructuralimbalances
1ntheregions,andparticularly intheareasreferredtoin
CouncilDirective75/268/EECof28April1975onmountainand
1)hillfarmingandfarmingincertainless-favoured areas;
1)OJNoL128.*19.5.1975,p.l.

-47-
b.measuresmadenecessarybytheregionalconsequences ofother
Communitypolicies;
c.measuresdesignedtoacceleratethecreationofjobs1nthe
Community'sless-developed regionsor1nreconversion regions
particularly byfacilitatingInvestors'accesstothecapitalmarket
andthelocation1ntheseregionsofInvestmentsoriginating
outsidethem;
d.development measurestobeundertakeninfrontierregions;
e.emergencymeasuresIntendedtomeetunforeseeable regional
situations".
Withoutprejudicetotheresponsibilities oftheCommissionwithregard
toStateaidsunderArticles92to94oftheTreaty,theCouncilacting
byqualifiedmajorityonaproposalfromtheCommission/havingcon­
sultedtheEuropeanParliament,shalldetermineasnecessaryforeach
specific -Communityregionaldevelopment measure:
thenatureoftheinvestmentstowhichtheFundmaycontribute;
b.theareasandregionswhichtheFundmayassist}
c.thenationalpublicaids.taken"Intoconsideration .in
grantingtheFund'sassistance;
d.thecontribution oftheFund:
e.thecategoriesofbeneficiaries forFundassistance;
f.thedetailedrules-forfinancing."
Article14
Article10shallbecomeArtiole13andshallreadasfollows:
"1.TheFundmayfinance,1nwholeor1npart,studiesinclose
relationwiththeactivitiesreferredtoinArticle2(3).
Thesestudiesshallbeundertaken ontheCommission'sinitiative
orattherequestofoneormoreMemberStates.

-48-
2. TheFund 'sassistance shall "bedecided "bytheCommission according -to
theprocedure provided forInArticle 15after consulting the
Regional Policy Committee .
Article 15
Article 11shall "become Article 14»
Article 16
Article 12shall become Article 15*
Article 17
Article 13shall become Article 16.
Article 18
Article 17shall read asfollows :
"The .necessary measures fortheimplementation ofthis Regulation
shall beadopted inaccordance with theprocedure laid down
inArticle 15"•
Article 19
The -following newArticle 18shall beadded : -
"Article 18
1. Member States shall adopt all measures necessary toindicate
distinctly ,according tothespecial characteristics oftheir
relevant national systems ,wore particularly oftheir national
budgets andofthebudgets ofpublic bodies ,allmonies received
from the Fund .
2. Attherequest oftheCommission ,Member States shall provide
information ontheallocation oftheamounts received from theFund ;
this shall besufficient toconfirm thecomplementary
character ofthe Fund ".

-49-
Article20
Article15shallbecomeArticle19,andshallreadasfollows:
"AssistancefromtheFundshallnotohangetheconditionsofcompe­
tition1nawayIncompatible withtheprinciplescontainedinthe
relevantprovisionsoftheTreaty,spelledout,inparticular,
intheprinciplesco-ordinating thegeneralregionalaidschemes.
Inparticular,theprovisionsofthisRegulationshallnotpreju-
dicetheapplication ,ofArticles.92to94oftheTreaty,particularly
asregardstheestablishment andre-alignment ofregionalaidareas
referredtoinArticle3andinrespectoftheamountofthecontri­
butionfromtheFund."
Article21
Article16shallbeoomeArticle20.Paragraph2shallbeoomethesecondsub­
paragraphofparagraph .1andthefollowingnewparagraph2shallbeadded:
"2.TheCommissionmayaccompanytherecortreferredtoinparagraph
1,asnecessary,withproposalsforamendingthisRegulation"•
Article22
Thefollowingsubdivisions shallbeintroducedintotheRegulation:
1. .BeforeArticle1:
"TitleI.PreliminaryProvisions.
2.AfterArticle3:
"TitleII:Communityactioninsupportofregionalpolicymeasures
takenbytheMemberStates.
Chapter1:"Fieldofactivity".

-50-
3.AfterArticle4:
"Chapter2:ProceduralProvisions.
4.AfterArticle11:
"TitleIII:SpecificCommunityRegionalDevelopment Measures".
5.AfterArticle13:
"TitleIV:GeneralandFinalProvisions .
Article23
ThisRegulationshallenterintoforceonthethirddayfollowingits
publicationintheOfficialJournaloftheEuropeanCommunities.
ThisRgulatlonshallbebindingInitsentiretyanddirectlyapplicable
1nallMemberStates.
DoneatBrussels,
FortheCouncil
thePresident

ANNEX .Ill
PROPOSAL FOR .COUNCIL REGULATION (EEC )
No of
ESTABLISHING ANINTEREST REBATES SYSTEM
WITHIN THE EUROPEAN REGIONAL DEVELOPMENT
FUND

-52-
Explanatory statement
1.Oneaimofregionalpolicyistomobilisealargervolumeofcapitalto
developlessforwardedregionsandtofacilitatethereconversion of
areasadverselyaffectedbyadeclineinemploymentincertainindus­
trialsectors.
2.UnderthenewArticle12Cb)andCc)oftheRegulation (EEC)724/75the
RegionalFundmayparticipateinspecificcommunityregionaldevelopment
actionswhichacceleratethecreationofemployment byfacilitating
investors'accesstothecapitalmarket/andwhicharerequiredasa
resultoftheregionaleffectsofothercommunitypolicies.
Thisregulationrespondstothisobjectivebycreatingasystemof
interestrebatesforcertainEIBandECSCloansandpossiblyforother
loansgrantedbytheEuropeanCommunities .
Thetwoprincipalobstaclestosuchfinancingaretheexchangerisks
andhighratesofInterest.
3.Experiencehasshownduringrecentyearsthatthetermsandconditions
onwhichECSCandEIBloanscanbeofferedhavenotbeensufficiently
attractivetoprovidethenecessarystimulustoinvestors.Consequent­
ly,notonlyistheeffectiveness oftheseinstrumentsimpaired,but
theopportunity theyaffordoftransferring capitaltothenational
economieswhoseregionaldevelopment andreconversion problemsaremost
acuteistherebyseriouslyconstrained.
./.

Atpresent/onlycertainloansfromtheEuropeanCoalandSteelCommu­
nitybenefitfrominterestrebatesfinancedbytheCommunity.These
interestrebatesarelimitedbytheECSCbudgetresourcessetaside
forthispurpose;mostofthemaregrantedforreconversion loansunder
Article56oftheECSCTreaty.Thisproposalwillpermitinterest
rebatestobegrantedonEIBloansinrespectofotherdevelopment and
reconversion problemsinothersectorsandtoincreasetheresources
availableforrebatesonECSCloans.
TheCommissionproposesthatcertainloansgrantedbytheCommission
andtheEIBshouldbeeligibleforinterestrebates.Thecorresponding
investmentsshould,createormaintainemployment,fallwithinregions
inwhichtheregionalfundcanbeappliedandforwhichregionaldeve­
lopmentprogrammeshavebeenpresentedandconformtotheotherrules
andcriteriasetoutinthisregulation.
Theproposedsystemwouldpermitinterestrebatestobegrantedon
CommissionandEIBloanswhichwould,forexample:
acceleratetheindustrialdevelopment oftheremainingpredomi­
nantlyagricultural areasoftheCommunity;
helpprovidealternativeactivitiesinlocalitieswhereanexis­
tingeconomicactivityisdecliningasaresultoftheCommunity's
commercialorindustrialpolicies;
facilitatethereconversion ofareasaffectedbythedeclinein
employmentincertainindustrialsectors.
ThesystemwouldcreateaidtoinvestorsborrowingfromCommunity
sourcesinthosecaseswheresuchassistanceisjustifiedeitherby
thegravityoftheeconomicproblemsorbytheirorigininother
Communitypolicies.
TheinterestrebateswillbegrantedbytheCommissiononthebasisof
regionalprioritiestakingaccountofthecriteriareferredtoin
Article5oftheregulation (EEC)No.724/75asamended.Inthecase
ofgloballoans,theCommissionwillfixthecriteriatobefollowed
byintermediary agenciesingrantingsubsidiaryloans.

-54-
proposalforCouncilRegulation(EEC).)¡o of
establishing aninterestrebateschemewithintheEuropeanRegional
Development Fund
THECOUNCILOFTHEEUROPEANCOMMUNITIES/
HavingregardtotheTreatyinstitutingtheEuropeanEconomic
Community,
HavingregardtoCouncilRegulation(EEC)No724/75ofof
1)18March1975establishing aEuropeanDevelopment Fund/asamended
byRegulation (EEC)No.... ■j..
andinparticularArticle12(2)<c)thereof,
HavingregardtotheproposaloftheCommission,
HavingregardtotheOpinionoftheEuropeanParliament,
participateinfinancingspecificCommunityregionaldevelopment
measures,andparticularly measuresdesignedtoacceleratethecreation
ofjobsintheCommunity'sless-developed regionsorinreconversion
regionsbyfacilitating investors'accesstothecapitalmarket;
Whereasoneofthemainobstaclesto...undertakings wishingto
takeadvantageofloansofferedbyCommunityinstitutions nrbythe
EuropeanInvestmentBankistheleveloftheirrateofinterest;
Whereastheestablishment ofaninterestrebateschemewithinthe
EuropeanRegionalDevelopment Fundmayenableundertakings toavail
themselvesmorereadilyofCommunityloanopportunities,andmay
thusfacilitatetheirexpansion;aEuropean
(2)
WhereasArticle12thereof providesthattheFundmay
1)OJNoL7321.3,1975,p.l
2)OJNo

-55-
Whereas these interest rebates mayinvolve either individual loans or
loans granted tointermediary agencies with respect toenterprises
below acertain size ;
Whereas these interest rebates must not ,however ,exceed certain limits ,so
astoavoid anundue reduction intheinterest rate tobeborne bythe
Investor ;
Whereas interest rebates should begranted only onloans intended for
thefinancing ofinvestments meeting thecriteria setout inArticle 4
(1)(a )ofRegulation (EEC)No724/75 . andlocated inthe
regions or1ntheareas referred toinArticle 3thereof
provided that such regions orareas have been thesubject ofregional
development programmes andthat these programmes have been submitted
totheCommission ;
Whereas theCommission will decide ontherequests forinterest rebates
onindividual loans onthe basis ofthecriteria referred toinArticle 5
of Regulation (EEC)No .724/75 andthat itwill fix the
criteria tobe observed theintermediary agencies forgranting
subsidiary loans ;
Whereas itisnecessary tosimplify theconsultation procedure for
the Fund Committee ;
Whereas ,finally ,provision must bemade fortheanalogous
application ofArticle 9of Regulation (EEC)No .724/75,
HAS ADOPTED THIS REGULATION

-5C >-
Article 1
Loans from theEuropean Communities orfrom theEuropean
Investment Bank mayreceive aninterest rebate paid from the
European Regional Development Fund .-tSuch interest rebates may
begranted inaccordance with therules laid down inthis Regulation .
Article 2
Interest rebates may begranted on:
a)global loans made tointermediary agencies
forthepurpose ofallocating subsidiary loans tofinance
investments tobecarried outbyundertakings with total
employment ofless than 500people ,with netfixed assets
employed ofless than 30million Hiropean units ofaccount
andinwhose capital structure larger enterprises ,other than
institutions responsible forcontributing toregional develop­
ment bypromoting industrial projects ,hold nomore than aone-
third participation ,or
b)individual loans toundertakings .
•••/• ••

D\
Article3
Themaximumrateoftheinterestrebateshallbe5%peryearoftheinitial
capitalvalueoftheloanexpressedinorconvertedtoEuropeanunitsof
accountonthebasisoftheratespublishedintheOfficialJournalofthe
EuropeanCommunities.Itshallapplyforthefirstfiveyearsoftheloan.
Theinterestrebateshallnotexceed40$oftherateofinterestonthe
nationallongtermcapitalmarketoftheMemberStateconcernedatthe
timeoftheapplicationfortherebate*
Theinterestrebateshallnotreducetherateofinterestpayablebythe
investorforthefirstfiveyearsoftheloantolessthan4$takinginto
accountanyinterestrebatesgrantedbytheMemberStateconcerned#
Themaximumindividualloanor,inthecaseofagloballoan,themaximum
subsidiaryloaneligiblefortheinterestrebateshallnotexceed50,000
Europeanunitsofaccountperjobcreatedormaintained,withinthemeaning
ofArticle4ofRegulationEECNo724/75*
Applications forinterestrebatesshallbemadetotheCommissionbythe
borrowerseitherdirectlyorthroughtheEuropeanInvestment Bankinthe
caseofloansfromthelatter*Theapplicationshallspecifytheamount
oftheloanrequested,thetermsandconditionsgoverningthegrantofthe
loanandalldetailsrequiredtojustifyandfixtheinterestrebate*
Applications forgloballoansshallbeaccompaniedbyadescriptionof
theintermediary borroweranditsactivities *
Applications shallbenotifiedbytheCommissiontotheMemberStatein
whichtheinvestmentiscarriedout*TheMemberStateshallinformthe
Commissionofanyobjectionswithin30days*Article4
59
•••/•••

-5»-
Article5
1.TheCommissionshalldecidetograntaninterestrebate,subjecttoa
decisiontograntaloanbytheresponsible Communitybodyinaccordance
withtheprocedurelaiddowninArticle15ofRegulation(EEC)No724/75,
TheCommissionmayconsulttheFundCommitteebywayofwrittenprocedure.
InthiscaseMemberStatesshallinformtheCommissionoftheirobservations
andanyobjectionswithin15daysofthedateonwhichthedraftdeoisions
weresent.
AttherequestofaMemberState,thewrittenprocedureshallbesuspendedand
aspecialmeetingoftheFondCommitteeshallbeconvenedwithinthefollowing
15daystoexaminethedraftdecisioninquestion.
2.Interest .rebatesmaybegrantedonloansintendedtofinanceinvestments
meetingthefollowingconditions :
a.investmentscarriedoutinregionsorareasreferredtoinArticle3(l)
ofRegulation(EEC)No724/75»forwhiohregionaldevelopmentprogrammes
havebeenoommunicated totheCommissionpursuanttoArticle6thereof.
b.investmentsconformingtothecriterialaiddowninArticle4(l)(&)thereof.
3.TheCommissionshalldecidetograntaninterestrebateonindividualloans
takingaccountofArtioles5and6ofRegulation(EEC)No724/75*
4.TheCommissionshallindicatefromtimetotimetotheEuropeanInvestment Bank
thecriteriaandprioritiesthattheCommissionwilltakeintoaccountingranting
rebatesonindividualloansgrantedbytheBank.
5*InthecaseofgloballoanstheCommissionshalllaydownthecriteriatobe
observedbytheintermediary agencieswhengrantingsubsidiaryloans.
Article6
1.TheinterestrebateshallbecalculatedandpaidinEuropeanunitsofaccount.
2.Inthecaseofindividualloans,therebateshallbepaiddirectlytothe
borrower,atitsrequestwhenthecorresponding interestpaymentsfalldue.
Applications forpaymentshallbeaccompanied byinformationastotheamount'
anddateofthecorresponding interestpaymentandbyacertificatetothe
effectthattheloanrepaymentshavebeenmadeuptodate.

-59-
•Inthecaseofgloballoans,theinterestrebateshallbecalculatedin'
EuropeanUnitsofAccount,onthedayofsignatureoftheloancontract,
onthebasisofarateofinterestat75%oftherateofinterestof
thecorresponding loan*
Thetotalcapitalised amountoftheinterestrebateshallbepaidby
theCommissiontotheEuropeanInvestmentBankor,asthecasemaybe,to
theECSCbudgetonthedayofsignatureoftheloancontract.
EverythreemonthstheEuropeanInvestmentBankshallcommunicatetothe
Commissioneachallocation madefromagloballoan,accompanied bythe
necessaryinformationtoassessthecase.
Ifanopenloanaccountiscancelledoranissuedloanisrepaidbeforethe
duedate,inwholeorinpart,asumcorresponding tothatpartoftheloan
aocountcancelledortothatpartoftheissuedloanrepaid,withinterest
added,capitalizedatthesamerateasthatreferredtointhefirstsub­
paragraphfortheperiodbetweenthedateofpaymentofthetotalcapitalized
interestrebateandthedateofrepayment,shallberemittedtotheCommission *
Article7
Article9ofRegulation(EEC)ITo724/75shallapplybyanalogytotheinvest­
mentsandloanswhichreceiveaninterestrebateunderthisRegulation *
Article8
TheCommissionshallinformtherecipientsofindividualloansofthe
interestrebatesgrantedtothem*Recipientsofsubsidiaryloansfrom
globalloansshallbeinformedintheircontractwiththeintermediary
agencythattheloanconditionsareaconsequenceofCommunityaidand
interestrebatesfromtheEuropeanRegionalDevelopment Fund*
•••/•••

-60-
Alistoftheloansthathavebenefitted frominterestrebatesshall "be
publishedeverysiimonthsintheOfficialJournaloftheEuropean
Communities *
Article9
TheCommissionshallreporttotheParliament andtotheCouncilonthe
applicationofthisRegulationinthereportprovidedforinArticle20of
Regulation(EEC)N°724/75.
Article10
ThisRegulationshallenterintoforceonthethirddayfollowingits
publicationintheOfficialJournaloftheEuropeanCommunities.
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicable
inallMemberStates#
BoneatBrussels•••••.
FortheCouncil
ThePresident.
trasdiuenaed.