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Vol. 1983/02 59 
  
 
Disclaimer  
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlement. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the openi ng to the public of the historical archives of the European Economic 
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this f ile is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. 
Februar 198 3 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003  
(ABI. L 243 vom 27 .9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
COM(83) 723 final
Brussels# 2nd December 1983
EUROPEAN UNION
(Report from the Commission to the European Council#  
Athens# 4-6 December 1983)
C0M(83) 723 final

EUROPEAN UNION
Annual Report by the Commission  
1983

INTRODUCTION
1. This report is the Latest in a series prepared in response to a  
request made by the European Council in 1976. It is also the Commission's  
contribution to the report which the European Council is required to  
present to Parliament "on progress towards European Union" in accordance  
with point 2.1.4 of the Solemn Declaration on European Union of
19 June 1983 (see 5 below).
2. The Commission attaches great importance to this report. Progress  
towards European Union calls for a quantum leap, both in terms of  
institutions and fields of competence. This is evident from the  
Commission's 1975 Report on European Union and the resolution on European  
Union adopted by Parliament in September 1983 (see 6 below). But it is  
equally true that consolidation and development of the present Community  
are preconditions for any further progress towards European Union.
3. In this context 1983 was a year for taking stock and devising solutions  
to problems which have dogged the Community for some time. In the
wake of the Stuttgart European Council in June, the institutions got to  
work to provide a sound basis for a further enlargement of the Community  
and its development during the remainder of the decade. These  
negotiations dominated Community affairs during the second fialf of the  
year. The scale of the problems to be solved meant that 1983 was  
inevitably a year of transition.
4. At the same time, the Community continued to develop and consolidate  
its policies. The common fisheries policy was introduced, agreement was  
reached on the reform of "acquis communautaire" in agriculture and

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negotiations for a new agreement with the African, Caribbean and  
Pacific countries began.
The European Council's Solemn Declaration and the European Parliament's  
Resolution
5. The Solemn Declaration on European Union adopted by the Heads of  
State or Government of the Member States meeting in the European Council  
in Stuttgart on 19 June 1983 had its origins in the joint proposal for
a European Act put forward by the Foreign Ministers of Germany and Italy  
in 1981. In adopting this Declaration - which has yet to be fully  
endorsed by all the Member States - the Heads of State or Government set  
themselves a number of objectives: to strengthen and develop the
Communities, which are the nucleus of European Union; to strengthen and  
develop political cooperation; and, to the extent that these activities  
cannot be carried^out within the framework of the Treaties, to promote  
closer cooperation on cultural matters, approximation of Member States'  
legislation, and concerted action to deal with international problems  
of law and order.
6. The second initiative was more grandiose and more ambitious. On  
14 September Parliament, by an overwhelming majority, adopted a  
resolution concerning the substance of the preliminary draft Treaty  
establishing the European Union. Parliament proposed that the  
experience of the Community and commitments made in political  
cooperation should serve as a basis for redefining the fields of  
competence of the European Union and the Member States and the balance  
of power between the institutions. The object is to update the  
Treaties by adding new areas which call for a common European policy,  
to bring the various forms of integration or cooperation in existence  
today (the Community, political cooperation, etc.) together in a single  
clearly-defined institutional structure, and to make the institutions

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more democratic, effective and responsible than they are at present.  
Parliament's Committee on Institutional Affairs is now working on a  
preliminary draft Treaty based on this resolution.
THE INSTITUTIONS
7. The constant challenges, from within and without, to which the  
Community is subjected, only serve to highlight the seriousness of the  
institutional shortcomings to which the Commission has drawn attention on  
so many occasions.
8. The Council's insistence on the agreement of all Member States, even  
on matters where unanimity is not required by the Treaties, is a  
stranglehold on the Community. Insistence on unanimity is not only a  
drag on progress and a check on new developments; it also makes it  
difficult to adapt policies to changing economic circumstances since any  
change is bound to threaten the vital interests of one or other of the  
Member States. It often leads the Council to seek the lowest possible  
common denominator and erodes the Commission's right of initiative.
9. It is true that the Council did vote on a number of occasions but  
these were too rare to be construed as a reversal of the trend. Efforts  
made during the debates on the Solemn Declaration on European Union failed  
to atter current practice. Nonetheless, the signs are that the Council
has not outlawed voting: it merely needs to make it the general rule.
10. The continuing lack of progress in one particular area-*-transport  
policy - over a number of years led Parliament to seek an exceptional  
remedy. On 22 January it brought an action against the Council in the  
Court of Justice for failure to act.

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11. The Council continued to overload its agenda with issues  
relating to implementation and management - which, by its nature, it is  
unable to handle properly - instead of passing responsibility to the  
Commission, the executive institution, as it is entitled to do under  
the Treaties. The Council's reluctance to do so places a further  
unnecessary burden on the decision-making process.
12. Even when the Council does pass responsibility for implementation and  
management to the Commission, the decision is usually hedged with conditions  
which severely limit the Commission's powers and provide no guarantee
that a decision will be taken.
13. Repeated undertakings by the European Council to increase the  
Commission's executive powers have so far failed to produce any tangible  
improvement. This applies equally - at the time of writing at least -
to its latest commitment, written into the Solemn Declaration on European  
Union.
14. Only on rare occasions has the Council shown itself willing to  
improve the position and enhance the role of Parliament within the existing  
institutional system, despite the fresh legitimacy conferred on it by the  
direct elections of 1979.
15. The Council's failure to agree on a uniform electoral system means  
that the second direct elections to the European Parliament will be  
conducted under very different electoral procedures, adversely affecting  
both voting rights and representation.

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16. Even in the context of the Solemn Declaration on European Union, the  
Council failed to agree on improving and extending the conciliation  
procedure. The need here is obvious and the Commission has been advocating  
improvements since January 1982.
17. By contrast, the Commission is pleased to note that the European  
Council included two provisions in the Solemn Declaration in response to  
its representations. The first of these states that, in addition to
the consultations provided for in the Treaties, Parliament will oe heard  
before the conclusion of any significant international agreement by the  
Community and before the accession of a new Member State. The second  
provides for the extension to all significant international agreements  
of existing procedures for informing Parliament of the progress of  
negotiations.
18. Insitutional problems have been given a new dimension by the impending
enlargement of the Community: the inevitable loss of homogeneity will
increase the risk of conflicts of interest. This is why the Commission
sent the Council a communication on 1  March on the institutional implications  
of enlargement. In this communication, which supplements the 1978  
"fresco", the Commission proposed that some of the issues on which the  
Treaties now require unanimity should be decided by a qualified majority  
in the Community of Twelve. It also proposed that the Treaties be  
amended to ensure that implementation and management are routinely  
entrusted to the Commission and to enshrine guarantees of effective  
decision-making.

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DEVELOPMENT OF INTERNAL POLICIES  
From Stuttgart to Athens
19. The interim solution adopted on 30 May 1980 to the problem of
the United Kingdom's contribution to the Community budget was accompanied  
by a mandate from the Council to the Commission which placed this problem  
in the context of a general review of Community policies: the reform of
the common agricultural policy, the strengthening of structural policies  
and instruments, and the development of new policies. This review failed  
to produce a permanent solution at the London European Council in  
November 1981 and Parliament's rejection in December 1982 of the budget  
to finance a further interim solution for 1982 made a new comprehensive  
approach imperative.
20. The Stuttgart European Council examined a series of Commission  
proposals and decided to take fai— reaching action to revitalize the  
Community. It launched "a major negotiation ... to tackle the most pressing  
problems facing the Community", agreed decisions on the outcome to be  
reached at the Athens European Council in December.
21. The negotiation was to examine "all the existing policies with  
particular attention to the common agricultural policy". Its purpose was  
'Modernizing and making effective the existing policies and to determine  
the priority areas for new Community action, and on the other hand to  
ensure that policies are cost effective and that economies are made  
wherever possible". A further objective was "a more balanced and equitable  
situation, also in financial terms from the point of view of the interests  
of the different Member States and of the Community as a whole".

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22. The Stuttgart declaration incorporated the following guidelines:
"The basic principles of the common agricultural policy will be observed  
in keeping with the objectives set forth in Article 39 of the Treaty  
establishing the EEC". The policy was to "be adapted to the situation  
facing the Community in the foreseeable future, in order that it can  
fulfil its aims in a more coherent manner". This includes in  
particular "effective control of agricultural expenditure by making full  
use of available possibilities and examining all market organizations".
The Commission was asked to submit proposals.
With reference to new policies, the European Council expressed its  
determination "to develop and make more effective Community action in  
research, innovation and the new technologies with a view to facilitating  
cooperation between enterprises. On the basis of proposals by the  
Commission, decisions will be taken on new Community actions making use of  
the Community dimension to improve the international competitiveness of  
European enterprises".
Non-agricultural expenditure was to be controlled too in cooperation  
with Parliament. "Policies are to be developed within the bounds of  
financial feasibility and supplemented through new actions which must be  
incorporated in an economically suitable way into Community policies."
The Council asked the Commission to "present a report with proposals  
for increasing the effectiveness of the Community's structural funds (the  
Regional Fund, the Social Fund and the Guidance Sector of the EAGGF)".
The European Council set the following objectives for the future financing  
of the Community:
.  "to secure the financing of Community policies and actions and their  
further development over a longer period of time taking into account  
the additional financial requirements which would flow from the  
accession of Spain and Portugal, while exhausting all possibilities for  
savings";
.  "to agree measures which, taken as a whole, will avoid the constantly  
recurrent problems between the Member States over the financial  
consequences of the Community's budget and its financing".

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"On the basis of the conclusions reached on development of policies, improving  
budgetary discipline and the examination of the Financial System, the extent  
and timing of the Community's requirements in terms of Own Resources will be  
determined."
23. On this basis, comprehensive negotiations got under way using a special  
urgent procedure. The Council held a number of special meetings attended  
by Foreign, Finance and, in some cases. Agriculture Ministers. At the end  
of July the Commission presented proposals on the common agricultural policy  
and a report on the structural Funds. It followed these with a number of  
proposals and communications. Intensive work on all four aspects of the  
Stuttgart declaration (common agricultural policy, structural Funds, new  
policies and Community financing) was done at alt levels. The Court of  
Auditors, which had been asked to review the sound financial management of  
Community activities, reported in October. Parliament debated the common  
agricultural policy, the future financing of the Community and the structural  
Funds on a number of occasions and gave its opinion at its November part-session.
24. The European Council agreed that"the accession negotiations with Spain  
and Portugal will be pursued with the objective of concluding them, so that  
the accession Treaties can be submitted for ratification when the result of
the negotiation concerning the future financing of the Community is submitted."  
The agreement reached on 18 October on the adjustment of acquis communautaire  
for Mediterranean products enabled accession negotiations on agriculture  
to begin.
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Other internal developments
25. One of the highlights of 1983 was the establishment of a new common policy.  
In January, after many years of negotiations, the Community acquired a  
fisheries policy. This covers equal access for fishermen from the Member States  
to Community waters, subject to certain restrictions on fishing in coastal  
areas, management and conservation of stocks, the common organization of  
markets, modernization of production structures and joint action at  
international level. However, implementation of this policy is still giving  
cause for concern.
26. Existing policies were consolidated too, beginning with the internal  
market, the cornerstone of the Community and a key factor in the development
of a competitive industry. Complaints from Community citizens about restrictions  
on freedom of movement continue to increase and the Commission has stepped  
up its campaign to prosecute infringements of Community law. The Council  
has become aware of the need to take more effective steps to do away with  
formalities and other barriers to the single market. Significant progress  
was made this year on standards, business law and the simplification of  
frontier formalities.
27. On the industrial front the Community, with its special responsibility  
for steel, had to take decisive action to deal with the steel crisis. With  
the Council's backing, the Commission tightened up its policy which is  
designed to restore the competitive position of Europe's steel industry
by drastically reducing production capacity so that it can survive without  
subsidies from 1985, when all state aid must cease. This move was accompanied

-  1 0  -
by measures to ensure a satisfactory price Level for steel products and  
to regulate the penetration of imported steel into the Community market.
28. Industrial recovery can best be achieved by meeting the challenge of
new technology. Fresh policies are needed if the Community is to win the  
battle for industrial competitiveness and close the widening gap between  
Europe and its major industrial partners. As a first step towards creating  
an environment for the development of advanced technologies, the Commission  
made proposals for action on information technology (the ESPRIT programme),  
telecommunications and biotechnology, put forward a multiannual programme  
on energy and energy research and developed a Community R&D strategy. This  
strategy, and the first framework programme for 1984-1987, has already been  
approved by the Council. =
29. In anticipation of more general measures to increase the effectiveness  
of the structural Funds (see 22 above), the Council approved the revision  
of the European Social Fund, a large part of which will be used for the  
training and employment of young people, especially those in the worst-hit  
regions.
30. Development of the European Monetary System (EMS) should encourage  
convergence, monetary stability and growth. The Commission proposed that  
the ECU be given the same status as other convertible currencies to encourage  
the private section to make ECU-denominated transactions. The realignment
of central rates within the EMS on 20 and 21 March was important for two  
reasons: it involved all the currencies in the system for the very first
time and it was accompanied by an adjustment of domestic policies, notably  
in France, which should guarantee greater stability in future.
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31. Financial integration and the creation of a Community "financial area"  
should help to harness European savings for investment in the Community.
To this end the Commission proposed a considerable liberalization of the  
movement of long-term capital and the inauguration of a large and efficient  
Community market for risk capital.

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EUROPE IN THE WORLD
32. The common commercial policy is the Community's main instrument 
for acting outside its frontiers. As the European Council reaffirmed 
in 1982, it must enable the Community to react successfully in defence 
of its legitimate interests. In March 1983 the Commission proposed to 
the Council a further strengthening of existing policy instruments so that 
the Community could react swiftly and in a manner compatible with its 
international obligations whenever it is faced by unfair competition
from non-member countries.
33. The countries represented at the Western Economic Summit at 
Williamsburg in May 1983 committed themselves "to halt protectionism and, 
as recovery proceeds, to reverse it by dismantling trade barriers". The 
Community played a constructive role in the international follow-up
to this meeting. It proposed a series of measures which, at a time 
when a large part of the world economy is still suffering the 
effects of recession,·wi 11 clearly signal that the major trading 
partners of the globe are committed to the defence of liberal world 
trade.
34..Relations between the Community and the United States were 
subjected to further strain, notably in relation to agriculture and 
steel. The Community reacted vigorously to American sales of wheat 
and butter to Egypt at prices which excluded it from one of its 
traditional markets. The United States was harshly critical of the 
external impact of the Community's common agricultural policy and some 
of the Commission's proposals for reform. In July the US Administration 
decided to restrict imports of special steels, despite commitments to the 
OECD and the Williamsburg Summit not to take new protectionist measures.
A number of protectionist measures adopted by the US Congress are also 
giving the Community cause for concern.

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35. The Commission and the US Administration held frequent discussions 
and consultations, sometimes at the highest level, in an attempt to ease 
commercial and economic tensions.
36. One of the Community's most worrying problems is its growing trade 
deficit with Japan. The Commission made strenuous efforts to
persuade Japan to step up imports of manufactured goods - its imports are
among the lowest in the industrialized world despite various measures
taken by the Japanese authorities - and to encourage European industrialists
and businessmen to sell to and invest in Japan. The Japanese authorities
gave further assurances tnat Japanese exporters '„'ill exercise
restraint in areas where increased exports could create serious difficulties
in the Community.
37. Various steps vjere taken during the year to develop relations 
between the Community and Japan. Regular ministerial contacts are now 
organized in the context of political cooperation and the Community has 
taken the first steps towards working as an equal partner with Japan in 
science and technology, industry and development aid.
3b. There was substantial development and diversification of 
relations between the Community and the ASEAN countries during the year, 
highlighting the Community's interest in the development of relations with 
these countries and increased regional cooperation, a vital element in 
the stability of the area. The fourth ministerial meeting was held in 
Bangkok in March and an EEC-ASEAN Business Council was formed. Development 
cooperation with ASEAN countries also proceeded apace.

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39. In the wake of events in Poland, the deterioration of East-West relations 
persisted in the absence of any real improvement in conditions in that country. 
The Community continued to send humanitarian aid to the Polish people 
and maintained restrictions on certain exports from the Soviet Union.
Within various international organizations, notably the OECD, western 
countries took a close look at economic relations with the eastern bloc 
and came to the conclusion that caution should be the watchword, especially, 
where finance and security are concerned. The concluding documents of 
the Madrid CSCE review meeting adopted in September seem to presage some 
easing of tension.
4Ü. As far as the Communi ty '  s re lat i  ons wi th the developing world are 
concerned, the main event was the opening in October of negotiations for 
renewal of the Lome Convention. Angola and Mozambique are now numbered 
among the 64 African, Caribbean and Pacific countries which are parties 
to this Convention which expires in 1984.
41. In the Commission's view, the new Convention should promote the 
independent development of the countries concerned. One of the primary 
objectives is self-sufficiency in food, which will inevitably entail 
development of agriculture, the agri-foodstuffs industry and the distribution 
network. But concentration on independent and independently-maintained 
development will not be enough unless there is a change of approach.
This is why the Commission is urging the opening of a dialogue 
which would go beyond the discussion of projects to embrace the 
definition of development policies.
42. Throughout 1983 the Community made strenuous efforts to intensify 
its fight against hunger in the world·. A new form of action, the food 
strategy, is already in operation in a number of African countries and 
will be extended to other countries at their request. On 11 July the 
Council adopted a regulation on implementation of the special programme

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to combat hunger in the world. This is designed to support or encourage 
the developing countries' own efforts and improve the living conditions 
of the most needy.