5.11.83 Official Journal of the European Communities No C 299/7 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation 
I. amending Regulation (EEC) No 974/71 in particular in respect of the system of 
neutral margins and the gradual dismantlement of the monetary compensatory 
amounts applying to certain agricultural and processed products 
II. amending Regulation (EEC) No 652/79 on the impact of the European Monetary 
System on the common agricultural policy 
COM(83) 586 final 
(Submitted by the Commission to the Council on 7 October 1983) 
I 
Proposal for a Council Regulation amending Regulation (EEC) No 974/71 in particular 
in respect of the system of neutral margins and the gradual dismantlement of the 
monetary compensatory amounts applying to certain agricultural and processed products 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Articles 42 and 43 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Having regard to the opinion of the Monetary 
Committee, 
Whereas the substantial adverse effects on the 
common agricultural policy which arise from a 
tendency towards permanent price differences as a 
result of monetary instability and the introduction of 
representative rates should in future be reduced; 
whereas rules are therefore needed concerning the 
dismantlement of the monetary compensatory 
amounts introduced by Council Regulation (EEC) 
No 974/71 of 12 May 1971 on certain measures of 
conjunctural policy to be taken in agriculture 
following the temporary widening of the margins of 
fluctuation for the currencies of certain Member 
States ('), as last amended by Regulation (EEC) 
No 2025/83 (2); Whereas these rules must govern the representative 
rates, the aim being to bring them more into line with 
actual economic circumstances; whereas the resulting 
changes in the representative rates will also contribute 
to the gradual elimination of the differential amounts 
introduced by Council Regulation (EEC) No 
1569/72 of 20 July 1972 laying down special 
measures for colza and rape seed (3), as last amended 
by Regulation (EEC) No 2027/83 (4); 
Whereas these rules must be so framed as to prevent 
the creation in the future of durable monetary 
compensatory amounts and to ensure that the present 
NCAs are gradually phased out so that the unity of 
the common agricultural prices is restored; 
Whereas, in the case of the new amounts, adjusting a 
central rate should not, in theory, lead to lasting 
increases in the said amounts; whereas appropriate 
measures should be adopted in order to avoid this, at 
least in the long term; whereas a system should 
therefore be introduced for abolishing the new 
amounts, in principle by dismantling them in three 
equal stages, the first of which should coincide with 
the adjustment of the central rates; 
Whereas, however, there appears to be a possibility of 
dismantling the old amounts in two equal stages; 
Whereas adjusting the representative rates could lead 
to a drop in incomes in some Member States; whereas 
provision should be made for offsetting this via the 
(') OJNoL 106, 12. 5. 1971, p. 1. 
O OJ No L 199, 22. 7. 1983, p. 11. (3) OJ No L 167, 25. 7. 1972, p. 9. 
(4) OJ No L 199, 22. 7. 1983, p. 14. 
No C 299/8 Official Journal of the European Communities 5. 11.83 
granting of degressive amounts of aid, the actual 
details of which will be decided by the Council in due 
course; 
Whereas, as regards the calculation of monetary 
compensatory amounts, Regulation (EEC) No 
974/71 makes a distinction only between basic 
products in respect of which provision has been made 
for intervention measures, and other products, for 
which the amounts are derived from those applicable 
to the basic products; whereas pigmeat has hitherto 
been regarded as a basic product in view of the 
existence of a buying-in system; whereas that system 
will be discontinued as from 1 November 1984; 
whereas the monetary compensatory amounts for that 
sector will henceforth have to be calculated on the 
basis of pigmeat being regarded as a product derived 
from cereals; whereas, in order to avoid the 
drawbacks which would result from too abrupt a 
change in the system, the calculation method should 
be adjusted in two equal stages; 
Whereas the levels of the monetary compensatory 
amounts are influenced by the neutral margin 
arrangement referred to in Article 2 (1) (a) of Regu­
lation (EEC) No 974/71 ('franchise'); whereas this 
arrangement makes no distinction between basic 
products and derived products; whereas, however, the 
prices of the latter partly depend on processing costs, 
the cost of the raw material having only a limited 
incidence; whereas, accordingly, the neutral margin 
for the monetary compensatory amounts for derived 
products could be increased without danger of 
disruption of trade; 
Whereas the neutral margin system includes certain 
restrictions designed to prevent unduly wide 
monetary gaps not bridged by the monetary 
compensatory amounts; whereas these rules have not 
given entire satisfaction; whereas they should 
therefore be repealed; 
Whereas Article 2 (4) of the abovementioned Regu­
lation provides for deduction of the lowest amount 
for the negative monetary compensatory amounts 
applicable in the wine sector; whereas experience has 
shown that in certain circumstances this rule may lead 
to frequent, unforeseeable and economically inappro­
priate changes; whereas it should be repealed; 
whereas the way the wine market is organized allows, 
however, for a wider increase in the neutral margin, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Article 2 of Regulation (EEC) No 974/71 shall be 
replaced by the following: 
'Article 2 
1. For products covered by intervention 
arrangements — hereafter designated "basic 
products" — the monetary compensatory amounts shall be equal to the amounts obtained by 
applying to the prices the monetary gap as defined 
in paragraph 2. 
For the other products referred to in Article 1 — 
hereafter designated "derived products" — the 
monetary compensatory amounts shall be equal to 
the incidence on the price of the product 
concerned of the application of the monetary 
compensatory amount to the price of the basic 
product from which it is derived. 
2. The monetary gap shall be equal to the real 
monetary gap minus the neutral margin as defined 
in paragraph 3. 
The real monetary gap shall be equal: 
(a) for the Member States the currencies of which 
are maintained in relation to each other 
within a spread at any given moment of 
2,25 %, to the percentage representing the 
difference between: 
— the conversion rate used under the 
common agricultural policy, and 
— the conversion rate resulting from the 
central rate; 
(b) for the Member States other than those 
referred to under (a), the average of the 
percentage representing the differences 
between: 
— the relationship between the conversion 
rate used under the common agricultural 
policy for the currency of the Member 
State concerned and the central rate of 
each of the currencies of the Member 
States referred to in (a), and 
— the spot market rate for the currency of 
the Member State in question in relation 
to each of the currencies of the Member 
States referred to in (a), recorded over a 
period to be determined. 
3. The neutral margin to be referred to for the 
calculation of the monetary compensatory 
amounts applicable to basic products shall be: 
— 1,50 points in the case of Member States 
which levy monetary compensatory amounts 
on exports and grant them on imports, 
— 1 point in the case of Member States which 
levy monetary compensatory amounts on 
imports and grant them on exports. 
In accordance with the procedure laid down in 
Article 6, the neutral margin may, however, in the 
case of the following products, be fixed at a 
higher level, subject to the following limits: 
— two points in the case of monetary 
compensatory amounts for derived products, 
— five points in the case of monetary 
compensatory amounts for wine. 
5-11.83 Official Journal of the European Communities No C 299/9 
4. Whenever the market price for adult bovine 
animals remains lower than the intervention price 
for a relatively long period, the monetary 
compensatory amounts applicable in the beef and 
veal sector may be correspondingly altered, in 
accordance with the procedure provided for in 
Article 6. 
5. Until 31 October 1984, the monetary 
compensatory amount for pig carcases shall be the 
arithmetic mean of: 
— the amount calculated, in accordance with the 
MCA calculation rules, in respect of 90 % of 
the minimum buying-in price for pig carcases, 
and 
— the amount calculated on the basis of the 
MCAs for the quantity of cereals required in 
order to produce one kilogram of pig carcase.' 
Article 2 
Article 3 of Regulation (EEC) No 974/71 shall be 
replaced by the following: 
'Article 3 
If the gap referred to in Article 2 (2) changes by 
not less that one point from the percentage 
referred to for the previous fixing, the monetary 
compensatory amounts shall be altered by the 
Commission on the basis of the change in the 
gap.' 
Article 3 
The following shall be added to Regulation (EEC) 
No 974/71: 
'Article 5a 
1. The monetary compensatory amounts shall 
be phased out by adjustments of the representative 
rates. Such adjustments shall be made under the 
procedure provided for in Article 6. 
(a) The amounts already existing on' the entry 
into force of Regulation (EEC) No 000/83, 
including the effect of the neutral margins, 
shall be abolished by adjustment of the repres­
entative rates by two equal stages, taking 
effect at the beginning of the first and at the 
beginning of the second marketing year 
respectively, following the entry into force of 
the Regulation. 
(b) On the occasion of each adjustment of the 
central rates, any increase in the real 
monetary gaps since the last adjustment of the 
representative rate shall be eliminated by one-
third by corresponding adjustment of the 
relevant representative rates. The remaining part of the increase in the 
relevant real monetary gaps shall be 
eliminated "by adjustment of the relevant 
representative rates in two equal stages, taking 
effect at the beginning of the first and at the 
beginning of the second marketing year 
respectively, following the currency event. 
Should the above rules not allow for 
dismantlement in three stages of any increase 
in the monetary gaps referred to in Article 
2 (2) (b), the relevant increase shall be 
eliminated by adjustment of the representative 
rates concerned in two equal stages, taking 
effect at the beginning of the first and at the 
beginning of the second marketing year 
respectively, following the relevant increase. 
2. Where this Article provides as date of entry 
into force of a measure the beginning of a 
marketing year, this date shall, for products of 
sectors which do not have marketing years, be 
fixed by the procedure instituting the measure 
itself. 
3. This Article shall apply without prejudice to 
the provisions: 
— of Article 3 of Regulation No 29 (s) in respect 
of accelerated dismantlement of monetary 
compensatory amounts, 
— of Regulation (EEC) No 129/78 (6). 
4. Where adjustments of the representative 
rates carried out under this Article lead, in view of 
increases in the price in ECU taking effect at the 
same time, to a reduction in prices expressed in 
national currencies, the Member States concerned 
may be authorized to grant offsetting aids. 
Such aids may not exceed the incidence of the 
price reduction. They shall be degressive and may 
not be granted for more than three marketing 
years. There may be a Community financial 
contribution. 
The general rules for the implementation of the 
provisions of this paragraph shall be adopted by 
the Council, acting by a qualified majority on a 
proposal for the Commission. 
(s) OJ No 106, 20. 10. 1962, p. 2553/62. 
(6) OJ No L 20, 15. 1. 1978, p. 1-6.' 
Article 4 
This Regulation shall enter into force on 1 January 
1984. 
No C 299/10 Official Journal of the European Communities 5. 11. 83 
II 
Proposal for a Council Regulation amending Regulation (EEC) No 652/79 on the impact 
of the European Monetary System on the common agricultural policy 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES, 
Having regard to the Treaty establishing the 
European Economic Community, and in particular 
Article 43 thereof, 
Having regard to Council Regulation No 129 on the 
value of the unit of account and the exchange rates to 
be applied for the purposes of the common agri­
cultural policy ('), as last amended by Regulation 
(EEC) No 2543/73 (2), and in particular Article 3 
thereof, 
Having regard to the proposals from the 
Commission (3), 
Having regard to the opinion of the European 
Parliament, 
Whereas Regulation (EEC) No 652/79 (4), as last 
amended by Regulation (EEC) No 108/83 (s), 
introduced the European Monetary System into the 
common agricultural policy for a period ending on 
31 December 1983; 
O OJ No 106, 30. 10. 1962, p. 2553/62. 
O OJ No L 263, 19. 9. 1973, p. 1. 
O OJ No C 57, 7. 3. 1980, p. 11; OJ No C 302, 19. 11. 
1982, p. 4. 
(4) OJNoL84, 4. 4. 1979, p. 1. 
(') OJN0LI6, 20. 1. 1983, p. 2. Whereas, by an amendment to Article 3 (b) of Regu­
lation (EEC) No 652/79, Regulation (EEC) No 
1011/80 (6) introduced a new system with regard to 
the neutral margins adopted for calculating the 
monetary compensatory amounts; whereas, under the 
second subparagraph of Article 5 of Regulation 
(EEC) No 652/79, this system is also limited to 
31 December 1983; 
Whereas the Commission has proposed to the 
Council that it amend the arrangements concerning 
the neutral • margins; whereas also, in view of 
experience gained, the ECU should be adopted 
definitively for use in the common agricultural policy; 
whereas the time restriction should therefore be 
eliminated, 
HAD ADOPTED THIS REGULATION: 
Article 1 
The second subparagraph of Article 5 of Regulation 
(EEC) No 652/79 shall be deleted. 
Article 2 
This Regulation shall enter into force on the day of 
its publication in the Official Journal of the European 
Communities. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States. 
(*) OJ No L 108, 26. 4. 1980, p. 3.