ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79)352
Vol.1979/0130

Disclaimer
Conformément aurèglement (CEE, Euratom) n°354/83 duConseil du1erfévrier 1983
concernant l'ouverture aupublic desarchives historiques delaCommunauté économique
européenne etdelaCommunauté européenne del'énergie atomique (JOL43du15.2.1983,
p.1),telquemodifié par lerèglement (CE, Euratom) n°1700/2003 du22septembre 2003
(JOL243du27.9.2003, p.1),cedossier estouvert aupublic. Lecaséchéant, lesdocuments
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règlement.
Inaccordance with Council Regulation (EEC, Euratom) No354/83 of1February 1983
concerning theopening tothepublic ofthehistorical archives oftheEuropean Economic
Community andtheEuropean Atomic Energy Community (OJL43,15.2.1983, p.1),as
amended byRegulation (EC, Euratom) No1700/2003 of22September 2003 (OJL243,
27.9.2003, p.1),this fileisopen tothepublic. Where necessary, classified documents inthis
filehave been declassified inconformity with Article 5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung (EWG, Euratom) Nr.354/83 desRates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI. L43vom 15.2.1983,
S.1),geändert durch dieVerordnung (EG, Euratom) Nr.1700/2003 vom 22.September 2003
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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)352final.
Brussels,5July1979
Proposalfora
COUNCILREGULATION (EEC)
amendingRegulation (EEC)No574/72fixingtheprocedurefor
implementing Regulation (EEC)No1408/71ontheapplication
ofsocialsecurityschemestoemployedpersonsandtheir
familiesmovingwithintheCommunity
f;
>\
(submittedtotheCouncilbytheCommission )
o
c
-On..
C0M(79)352final.

EXPL'irATORY MEKORJflTOUM
Specificconversionratesaxeusedbythesocialsecurityinstitutions ofthe
MemberStatestoinvestigateandadministerthefilesofemployedpersonsand
theirfamiliesmovingwithintheCommunity.
Theimplementation oftheEuropeanMonetarySystem(MS)involvesareviewof
themethodcurrentlybeingusedfordeterminingratesforconvertingcurrencies,
fiiedinaccordancewithArticle107ofEECCouncilRegulation No
574/721.Thisproposalaimsatadoptinganewmethodwithmorestringentrules
todeterminetheratesandcloselydefinedexchangerelationbetweenthevarious
currencies .
1.Thepresentmethodofcalculatingratesofconversion
1.1InaccordancewiththeprovisionsofArticle107(l)ofEECRegulationNo
2574/72asamendedbyArticle1ofEECCouncilRegulationNo2639/74sdifferent
methodsareusedatpresentforcalculatingratesofconversiondependingon
whetherornotthecurrenciesinquestionareboundbya2.25fluctuation
margin,asdetailedbelow.
-Forexchangedealingsbetweencurrenciesstayingwithina2.25%fluctuation
margin,thecentralratesareapplicable.
ItshouldbenotedthatuntiltheentryintoforceoftheMSthisprovision ,
affectedonlythecurrenciesinthe"snake"butthatwiththeintroduction of
theMSitappliesalsototheFrenchfrancandtheIrishpound,
1.Regulation(EEC)No574/72oftheCouncilof21March1972fixingtheprocedure
forimplementingRegulation(EEC)No1408/71ontheapplicationofsocial
securityschemestoemployedpersonsandtheirfamiliesmovingwithinthe
Community(0JNoL74of27March1972).
2.Regulation(EEC)No2639/74oftheCouncilof15October1974publishedin
0JNoL283of19October1974-

-Forexchangedealingsbetweencurrenciesnotadheringtothe2.251°margin
arateisusedthatisbasedonthearithmetic meanofthebilateralexchange
ratesofthesecurrenciesquotedoneach"businessdayth^exchanges("fixing""
procedure)ofthetwomarkets^.Itshouldbenotedthatsincetheintroduction
oftheMSthisprovisionaffectsonlytherelationsbetweentheItalianlira,
theBritishpoundandalltheothercurrencies.
1.2Thepresentcalculation methodhasseveraldrawbacks,includingthefollowing:
-Theexistenceoftwocalculation methods,oneapplicabletocurrenciesstaying .
withina2.25marginandtheotherwherethisisnotthecase,tendstogive
risetodistortion .Thesupremacygiventocentralrateswasjustifiedaslong
asallCommunityrelations,includingthosebetweenCentralBankstakingpart
inthe'^nakd 1,werebasedoncentralratesbutthisisnolongerthecase.Indeed,
withtheexceptionofthecommonagricultural policy,wherethedualcriteria
(centralrates-marketrates)hasbeenretainedsoasnottoupsetthepresent
systemofmonetarycompensatory amounts,allintra-Community financialrelations,
includingsettlements betweenCentralBankswithintheMSframework,are
effectedonthebasisofdailyexchangerates.
-Thereferencetothe"fixing"procedureleadstodiscrepancies iuitherates
takenintoaccount,asaresultmainlyofthefactthattheyessionsatwhich
ratesarefixedarenotheldsimultaneously inthevariousnationalexchanges.
-ThedomainofsocialsecurityformigrantworkerswouldbethesoleCommunity
sectorstillrelayingonthedaily"fixing"procedure,aswiththeadoptionof
theEKStheCentralBanksandtheCommissiondecidedtorelinquishthisprocedure
forcalculatingtheECTJandinsteadusetherepresentative rateofeachcurrency
inrelationtothedollar.Thissituationrequiresthemaintenanceofaspecial,
rathercumbersomeinfrastructure foranalysingtelexesfromtheCentralBanks.
3.AttheLondonmarket:ratesrecordedatnoon.

-'i-
Itisalso asource ofdifficulties asmistakes canbedetected only at
theendofthemonth when monthly averages are "being worked out.
2.Proposal for anewmethod
2.1TheCommission proposes that inthesector ofsocial security for
migrant workers theconcept ofcentral rates heabandoned andinstead to
calculate conversion rates onthebasis ofthedaily exchange rates for
allcurrencies ,itbeing understood -that atthesame time therates
resulting from daily "fixing "would bereplaced bytherates that are
notified byalltheCentral Banks atthesame hour .These rates are
already being used inallother Community sectors forcalculating theECO
under theEuropean Monetary System ,
2.2Inaddition toobvious administrative simplification ,thenewcalculation
method will yield thefollowing advantages ?
–exact cross-rates obtained bysimple derivation ,obviating theneed for
calculating averages between twomarkets ;
–results immediately available !therates maybedetermined asoften as
necessary andcommunicated without delay ;
–standard ,treatment for all currencies onthe basis ofmarket rates .
2.3Acomparison ofthetwomethods shows that there will bevirtually no
difference forseparately floating currencies ,astheir rates arealready
based onexchange markets ?"fixing "atpresent andrates recorded atthe
same hour inthenewmethod proposed .
However ,forthecurrencies between which amaximum margin of2.25$ is
being maintained ,thereference tomarket rather than central rates will
entail adifference due tothe movements ofthese currencies within the
system which mayrise tothepermissible fluctuation ceiling of2®25i°»
Λ

3.Procédure
ThenewrevisionofArticle107ofRegi.Tla.tion Ho574/72providesthat
henceforththeratesofconversion -usedforth&purposesoftheRegulations
onsocialsecurityformigrantworkerswill,asinalltheotherCommunity
sectors,"bebasedontheexchangeratesnotifiedbytheCentralBanksat
thesamehourandnolongeronthecentralratesforcertaincurrencies
andthe"fixing"ratesforothercurrencies.
ItisthewishoftheCommissionthatthenewmethodbeappliedassoonas
possible,inanycasebeforeAugust1979»

-6-
Proposalfora
COUNCILREGULATION (EEC)
amendingRegulation (EEC)No574/72fixingtheprocedureforimplementing
Regulation (EEC)No1408/71ontheapplication ofsocialsecurityschemes
toemployedpersonsandtheirfamiliesmovingwithintheCommunity
THECOUNCILOFTHEEUROPEAN COMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity;
HavingregardtoCouncilRegulation (EEC)No1408/71of14June1971on
theapplication ofsocialsecurityschemestoemployedpersonsandtheir
1familiesmovingwithintheCommunity,aslastamendedbyRegulation (EEC)
No2595/77^,andinparticularArticle97thereof;
HavingregardtotheproposalfromtheCommission;
WhereasCouncilRegulation(EEC)No3181/78^setuptheEuropeanMonetary
System;-
4WhereasCouncilRegulation (EEC)No574/72fixedtheprocedurefor
implementing Regulation (EEC)No1408/71,andwhereasinparticular
Article107thereoflaysdowntheprocedurefortheconversionof
currencies;
Whereasthisprocedureshouldbeamendedsoastoadaptittothe
mechanismslaiddownforcalculating theECUundertheEuropeanMonetary
System;
HASADOPTEDTHISREGULATION :
./.
OJNoL149,5.7.1971,p.2
20JNoL302,26.11.1977,p.1
30JNoL379,30.12.1978,p.2
40JNoL74,27.3.1972,p.1

Article 1
Regulation (EEC)No574/72isherebyamendedasfollows:
1.Article107(1)(a)and(b)shallbereplacedbythefollowing:
"Theratecalculated bytheCommissionshallbebasedonthe
monthlyaverageoftheexchangeratesofthosecurrenciesduring
thereferenceperiodspecifiedinparagraph 2,whichshallbe
notifiedtotheCommissionforthepurposesoftheEuropean
MonetarySystem."
2.Thefirstsubparagraph ofArticle107(2)shallbedeleted.
3.Article107(3)shallbereplacedbythefollowing:
"Theexchangeratestobeusedforthepurposesofparagraph 1
shallbetheratesnotifiedtotheCommissionatthesamehourby
thecentralbanksforthecalculation oftheECUwithintheframework
oftheEuropeanMonetarySystem."
Article2
ThisRegulationshallenterintoforceonthedayofitspublication in
theOfficialJournaloftheEuropeanCommunities.
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicable
»inallMemberStates.
DoneatBrussels. FortheCouncil