A4-0261/97

Resolution on the Commission report to the Council and the European Parliament on the agri-monetary system for the single market: 1 July 1995 to 30 June 1996 (COM(96)0636 - C4-0026/97)

The European Parliament,

- having regard to the Commission report (COM(96)0636 - C4-0026/97),

- having regard to the report of the Committee on Agriculture and Rural Development and the opinion of the Committee on Budgets (A4-0261/97),

A. whereas there were no major currency fluctuations in the period July 1995-June 1996, which is the period covered by the Commission's report,

B. whereas the agri-monetary system represents a cost to the Community agricultural budget of approximately ECU 1.3 billion per annum,

C. whereas it is not appropriate at this stage to propose major reforms to the agri-monetary system, since the third stage of economic and monetary union is due to start on 1 January 1999, totally changing all agri-monetary arrangements,

D. whereas, however, a reform to the system will need to be proposed some time in 1998, making it appropriate to continue study and analysis of the various options available,

1. Calls on the Commission to take account of the following points in any proposals it sees fit to make concerning the agri-monetary system:

(a) agrees with the Commission that it is premature to make proposals for a Council Regulation to adapt the agri-monetary system, because of the uncertainties which at present exist concerning EMU, the accession of new Member States, and further reform of the CAP in the context of Agenda 2000,

(b) believes, however, that continued effort should be made to simplify the rules of the system, without compromising it as a whole, and in particular calls for the agricultural conversion rate to be used as the sole rate for all trade,

(c) notes that a great many of the devaluations in the period concerned were very small indeed (often amounting to less than 0.5%) and believes it would be a refinement to the system if changes could be restricted to appreciable devaluations and revaluations, rather than making continual changes of a minor nature,

(d) notes that proposals for a reform of the system will have to made in 1998, and believes that the fundamental principle which should be adopted is that the future agri-monetary system should act as a safety net when currencies get too far out of line; a ceiling and a floor should exist, expressed in local currencies within a band of ±5% of an agreed reference point, which would prevent too much disturbance of markets or incomes caused by currency fluctuations;

(e) believes that the agri-monetary system should aim to be self-financing in the long run, since devaluation in certain countries should allow savings to be made which could be made available to compensate farmers whose incomes are falling in countries which are revaluing; recognizes, however, that there will be a need for complementary payments since the number of farmers whose currency is revaluing is unlikely to equal the number of farmers whose currency is devaluing, and currency fluctuations are rarely equal;

2. Instructs its President to forward this resolution to the Commission and Council.