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Vol.1979/0232

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)684 final
Brussels ,21november 1979
COMMISSION REPORT ONEUROPEAN UNION
(Communication totheEuropean Council -Dublin ,
29and30november 1979 )
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COMMISSION REPORTONEUROPEAN UNION
1.ThisistheCommission'sthirdreport/sincetheT.indemans Reportin
December1975/ontheresultswhichhavebeenachievedandtheprogresswhich
canstillbemadetowardsEuropeanUnioninthevariousfieldsconcerned.
2.Thecurrentyear-hasseenaconsiderable numberofmajoreconomicand
politicalevents/themostsignificant beingtheelectionoftheEuropean
Parliament .Substantial progresshasbeenmadetowardsEuropeanUnionthanks .
totheawarenesswhichhasdeveloped onimportantissuesandtheCommunity-level
deliberations ofthepreviousyear.
3.Throughout theCommunity/industrialactivityhasbeenexpandingbutthe
extensionofindustrialrestructuring measuresreflectsthelingeringmalaise
stillaffectingtheeconomicclimate/whichisnowlesstensebutsti4.luncertain.
Unemployment isstillhighandremainsacauseforconcern/especially unemployment
amongyoungpeople.Inflation/whichwaslargelycontainedlastyear,hasbeen
showingadistinctupwardtrendsincetheearlymonthsof1979.Theuncertainty
surrounding suppliesandtheriseinfuelpricesareoncemorethefactors
determining thebleaknessoftheeconomicoutlook.
\
•' ; \
Thetradebalance,whichhadbeenbroadlyspeakingpositiveforayear,
hasagaindeteriorated .Thevariousexternalfactors .affectingthewidediversity
ofdomesticsituations intheCommunityareoncemoremakingforgreatereconomic
divergence betweenMemberStates.;
POLITICAL ANDINSTITUTIONAL ASPECTS OFEUROPE
4.WiththefirstdirectelectionofEuropeanMembersofParliament byuniversal
suffrage,adecisivestepwastakentowardsstrengthening thedemocratic legitimacy
X»Ttheentireinstitutional structure.Althoughprovidedforbythe-Treatiesof
ParisandRome/theelectionoftheEuropeanParliamentdidnottakeplaceuntil
morethantwentyyearsafterthoseTreatiesweresigned,fromthefirstdebates
andtheatmosphereoftheproceedingsit.isapparentthatthenewParliamentis
resolvedtospurtheachievement ofEuropeanUnion.

-2-
5.ThebriefentrustedtotheThreeWiseMenbytheEuropean ,Councilwhich
metinBrusselson4/5December1978showsthattheHeadsofStateandGovernment
areanxioustoensurethattheCommunityInstitutions areadapted,onthebasis
oftheTreatiesandwithoutanyinfringements thereof,tomeettheneedsofthe
^enlargedCommunity.TheWiseMenhavenowreported.
6.TheCommission,foritspart,hasbeenconsidering howititselfoperates.
Anindependent workingpartyconsisting offivehigh-ranking publicfigureshad
beenrequestedtoprepareareportonthestructureoftheCommission'sdepart­
mentsand,howthesecouldbeadaptedtotakeaccountoftheCommunity'senlarge­
mentfromninetotwelveMemberStates.Thisworkingparty,whichwaschaired
byMrSpierenburg,submitteditsconclusions on24September1979.Thisreport
willprovideguidancefortheCommission'spresentconcentration ongettingits
departmentsefficiently organizedtocopewithitschangingduties.
ECONOMIC ANDSOCIALASPECTS OFEUROPE
7.Onceagainthefuelshortageandrisingfuelpriceshavebeenthecentral
problemconfronting theworkeconomy.WithintheCommunityitself,thefirst
signofaneffective commonpolicyonenergywastheMemberStates'jointdecision
tolimittheiroilimports.AttheTokyoSummit,thiscommon.standenabledthe
participating countriestoadoptoil-importceilingsupto1985.Aseparateset
ofmeasures,someofwhichhavealreadybeenadopted,areaimedatpromotingthe
useofsolidfuels,atrationalizing andcuttingbackenergyconsumption/andat
makinguseofalternative sourcesofenergy.
8.TheCommunityisholdingmoreandmoreconsultations ,withtheothermain
industrialized countrieswithaviewtofindingacommonpositionandagreeing
oncommonmeasurestodealwiththeenergycrisis.Although acommonenergy
policyisstillalongwayoff(becauseoftheconstantpressureexertedby
externalfactors),somerealprogressinthisdirection hasbeenmade.

-3-
9. Inmany sectors ,the level ofindustrial activity isstill disturbingly
low;Community investment aidhasbeen proposed forrestructuring orconversion
measures inother sectors /such astheshipbuilding and texti leindustri es.
• ' I /
These industrial -restructuring and conversion measures also have repercussions -
onproducers outside theCommunity .,Unt iItheprocess hasbeen completed and
until industrial structures andactivity levels have become compatible with the
long-term market outlook ,itwill bedifficult todispense with certain measures
torestrain imports .
10.Using other means ,theCommunity has worked toencourage changeovers in
sectors introuble ,and tostimulate industrial activity -inthehigh-technology
j - .
sectors .Towards this end,various research anddevelopment programmes have
been launched ,including those forthe 'texf ileandclothing industry ,aeronautics
and informatics .
V , •
i
11.Asconcerns the CAP,the structural imbalances insome markets ,particular­
lysugar andmilk ,have once more been ofvery considerable proportions .Only
limited support hasbeen forthcoming forCommission proposals forbringing some -
sectors ofagriculture back into balance .Theproblem ofthesurpluses and its
financial implications for thepattern ofCommunity expenditure isstill there ,
and theCommission isproposing anumber ofadjustments tocertain common organiz­
ations ofmarkets ., V
12.Inaddition anassortment ofmeasures inconnection with policy onthe
structure ofagriculture have been agreed onforthedisadvantaged regions ,
more particularly inSouthern Europe :they include specific programmes for
Ireland andtheMediterranean areas ofItaly and France ,and acommon forestry
operation .Other structural operations and specific measures arecurrently
under discussion .Injection ofvery large sums into the ERDF iscalculated
tohelp place Community funding ofhigher structural expenditure onasound
basis .

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-MONETARY ASPECTS OFEUROPE ^
13.Fundamental progress towards European Union wasachieved inthemonetary
sphere with the introduction ofthe EMS,the creation ofthe ECU and theuse
oftheEuropean Monetary Cooperation Fund tobuild upcurrency reserves .Now
that thesystem hasbeen operating forsixmonths ,thesigns arethat this new
move towards monetary solidarity isliving uptoitspromise .The technical
readjustment ofexchange rates inSeptember shows that theEMS issufficiently
flexible toadapt totheeconomic factos oflife ,while preventing disorderly
ups and downs onthe currency markets .
14.One important consequence ofthe introduction ofthe EMS has been asub­
stantial reduction insome monetary compensatory amounts ;this represents a
further step towards thenormalization ofagricultural markets .Accompanying
measures planned atthetime when the EMS wasbeing set upalso included the
strengthening ofthe economies ofthe less prosperous Member States .Ireland
andItaly cannowobtain lowinterest rates for thefinancing ofselected
projects andprogrammes toimprove infrastructures .The first loans have already
been granted from the "NewCommunity Instrument "forthefinancing ofinfra­
structure projects .
ENLARGEMENT OFEUROPE "
15.Theenlargement oftheCommunity came onestep nearer with thfesigning of
theAccession Treaty with Greece ,which will thus become thetenth Member State
inJanuary 1981 .Negotiations forSpanish andPortuguese accession arepro­
ceeding .Once Spain andPortugal become Member States ,theCommunity will be
faced with theproblems peculiar toSouthern Europe .
EUROPE AND THE WORLD
16.TheTokyo Round ,which hasfinally ,been concluded after sixyears of
difficult negotiations ,represents animportant newstage intheliberalization ,
ofinternational trade .The final results are significant ,not orrly asconcerns
tariffs but also asconcerns the .rules ofGATT andnon-tariff codes ,especially
when itisborne inmind that these results were achieved inthe context ofthe
worst economic recession forforty years .The agreement isdesigned towork
against national protectionist tendencies ,andshows that alltheparticipating
countries realize the interdependence oftrade .
-I
./.

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17.Thenegotiations withtheACPcountriesresultedinthesigningofthe
LomeIIConvention whichspecifiesthenewformsofcooperation freely
negotiated betweenequalpartners.Thesystemofstabilizing exportearnings
hasbeenextended,whileincreasedresourceswillbeplacedatthedisposal
oftheACPcountries,inallsectors,fromsmalllocalprojectstomajor
regionatprojectsinvolving morethanonecountry.
18.TheCommunity hasbeenworkingupitsrelationswith.otherdeveloping
countries:thusithasopenednegotiations foracooperation agreementwith
* .
thefiveASEANcountries,andhasheldexploratory talkswithBrazil,India
andtheAndeanGroupwithaviewtorenewingorconcluding cooperation agree­
ments.
19.InEurope,ithasdevotedparticularattentiontorelationswithTurkey-
aCommunityassociatesince1964-andwithYugoslavia :discussions havebeen
conductedforthepurposeofworkingoutfuturestagesforreactivating and
intensifying theAssociation,andinitialnegotiations havebeenenteredinto
withYugoslavia onthetermsofacooperation agreement.
EUROPEANDTHEEUROPEANS
20.On10June1979thecitizensofEuropehadtheopportunity tovoteon
thefutureoftheEuropeanCommunity,but1979hasseenlittleprogresson
theissueswhichareofspecialinteresttoEuropeanmenandwomen.The
Communitypursuesessentially economicgoals;itishardlysurprising,therefore

iftheprogress achieved sofarhasbeen largely intheeconomic sphere .
European Union has awider aim,however .Forseveral years ,aspolitical
pressure hasbeen growing ,certain issues ofdirect concern tothe citizens
ofEurope have been under consideration andthese arenowbeing discussed
byCommunity bodies .These matters include extension ofright ofresidence
toall,voting andstanding inlocal elections ,European passport and a
European driving licence .
21.Apart -from some minor adjustments noprogress hasbeen made towards
reducing thechecks applied attheCommunity 'sinternal frontiers .The
Community isstill deliberating onwhether tosign ,asasingle body ,the -
European Convention onHuman Rights .Asregards culture and contacts between
peoples ,nofurther moves have been made toset upthe European Foundation -
suggested byMrTindemans .
WHAT REMAINS TOBEDONE .
22.Attheir meeting inParis inOctober 1972 ,theHeads ofState and
Government setthemselves theprincipal objective oftransforming thewhole
range ofrelationships between Member States into aEuropean Union before
theendofthis decade ,without inanywaydeparting from theTreaties already
signed .
Now that theend ofthedecade isonly afewweeks away ,itwould seem
appropriate toassess what progress hasbeen made andtomeasure the gapwhich
still separates usfrom the said objective .-
23.TheTindemans Report onEuropean Union ,which wassubmitted inDecember
1975 ,defines such Union asconsisting ofthefollowing :
-institutions having theauthority todefine policies which are common ^
.comprehensive andconsistent ,having thepowers totake effective action
andpossessing the legitimacy required fordemocratic control ;
-common measures inthemost important areas ofexternal "relations :foreign
policy ,security andeconomic cooperation ;

-commonpoliciesoneconomicandmonetarymatters/onindustrial and
agricultural matters,andonenergyandresearch;
-effectivesolidarity,tocorrectthedisparities inlevelsofdevelopment
andincomes; .- ( _
-protectionoftherightsandimprovementofthelivingstandardsenjoyedby
thecitizensofEurope.
24.TheEMU,whichrepresents anintermediate stage,isstillfarfrom;
complete,butfullparticipation byalltheMemberStatesintheEMSandcloser
EECeconomicandmonetarycohesionaremajorstridesinthatdirection.Active
preparation mustbemadeforsettinguptheEurppeanMonetaryFundandforfull-
scaleuseoftheECUasareservecurrencyandmeansofpayment.
25.Convergence onthecommongoalsofgrowth,stability andfullemployment
necessitates coordination ofeconomicandsocialpolicyandtighterbudgetary
discipline onthepartoftheMemberStates.Thearsenalforimproving economic :
structures soastohelpreducedisparities betweenMemberStateandMember .
t
Stateandbetweenregionandregionmustbebothdeployedmoreefficiently and
furtherexpanded. ,
26.Itisessentialthattheinternalmarketshouldbeeffectively completed
intheshortterm.Toomanybarriersofeverykindstillstandinthewayof
thefreemovementofpeople,goodsandcapital.Inmanyfields(suchastaxation,
socialwelfarelegislation,transport andtheawardofpubliccontracts)purely
nationalarrangementsstillpersist.AsyetthereisnoEuropeaneconomiczone
inwhichoureconomies,industries andservicescanbeorganized andplanned
forthefuturewithinaCommunityframework.Alltheremainingbarriersmustbe
quickly'dismantledifbenefitsaretobederivedfromeconomiesofscale,a
Europeandivisionoflabouroreconomicandindustrialplanning.Theachievement
ofEMUisimpossiblewithoutfullCustomsUnion,whichcannolongerbedelayed
withoutjeopardizing thewholeedificeoftheEuropeanCommunity,sopainstakingly
erectedoveraperiodofalmostthirtyyears.

27.TheCustoms Union competition policy ,andtheCommon Agricultural Policy ,
although incomplete ,are the areas where most progress has been made towards
theobjectives ofEuropean Union .Every effort must be.made tocomplete and
consolidate this part oftheEuropean edifice .Inallother areas ,common
policies are still at'avery early stage .Certain measures such asthe EMS
arenowunder waybutothers have hardly' left thedrawing board .Theenergy
crisis andthetechnological challenge ,however ,may strengthen thecommon
determination toarrive atEuropean policies .
28.Theenlarged Community must find adequate ways ofgradually andharmoniously
integrating theeconomies ofthenewMember States into the European -framework .
Themarked economic andsocial differences will call for imaginative andcourageous
solutions .
29.Todeal with theproblems which await usincoming years ,the Community
'" - *
should now beincreasing theeffectiveness ofitsinstitutions .Internal
difficulties ,thedisturbances caused byexternal factors and the imminent
- ' ' /
prospect ofenlargement allmilitate infavour ofnewanddifferent ways of
operating ,more suited tothe needs oftheenlarged Community .Anin-depth ■-
(
investigation must bemade into thetasks andpowers entrusted tothe institutions .
30.Little ornoprogress isbeing made onthe issues ofspecial interest to ,.
the citizens ofEurope .Aslong asthepolitical will islacking ,nomeaning --
ful steps canbetaken toimprove living conditipns ,establish aEuropean
identity orgive shape todeeply-felt human and cultural aspi rations .Europe 's
elected representatives will doubtless make some political moves torender the
Community more meaningful tothehuman beings ofwhich itconsists .
31iThemore oneadvances towards European Union ,themore difficult itwill
betodraw anartificial distinction between important Community activities and
those ofthe Member States .All matters ofcommon interest must betreated .
within asingle institutional framework .Experience shows that thefull weight -
oftheCommunity isneeded behind us'if ourvoice istobeheard andanyeffective
action istobetaken .Where 'individual Member States are incapable oftaking
effective action tosolve problems ,theCommunity should begiven the relevant
powers andthemeans' totake action onitsown .