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COM(77)173
Vol.1977/0071

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(77)173 final
Brussels ,17May 1977
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! RECOMMENDATION
for a
COUNCIL DECISION
concluding aFinancial Protocol between the
European Economic Community andGreece
f*
■,/
(submitted totheCouncil "bytheCommission )
/
COM(77 )173final/

COMMISSION COMMUNICATION TOTHE COUNCIL
1.On13January 1977 ,inaccordance with themandate conferred onit
bytheCouncil ,theCommission concluded thenegotiations forasecond
financial protocol inthecontext oftheAssociation Agreement between
theEEC andGreece .AstheCommunity 'sdelegation had indicated its
agreement adreferendum ,theCommission submitted the results ofthe
negotiations totheCouncil which approved them atitsmeeting on
18January 1977 -Theprotocol was subsequently signed on28February 1977-
2.With aview tothe conclusion ofthis protocol onbehalf ofthe
Community theCommission isrequested toapprove thedraft communication
tothe Council onthenegotiations andthe recommendation fpraCouncil
decision toconclude theprotocol .

EXPT.ANTORY Ï^RMOT^rnUM
on"thenegotiation ofanewFinancialProtocolunderthe
E3C-GreeceAssociation Agreement
1.ByaDecisionof29November1976,theCouncilauthorizedthe
Commissiontoopennegotiations withtheHellenioRepublicforthe
conclusion ofanewFinancialProtocolundertheEEC–Greece Association
Agreementandissuedthedirectivesforthosenegotiations .
TheCommissionconductedthenegotiations withtheGreekDelegation
withintheCouncilofAssociation .Theywerecompletedon
13January1977-Thedelegationsindicatedtheirapproval ,
vlreferendu mofthecontentofthetextsofthedraftProtocol,the
3o;.jnunitydeclaration concerningtheEuropeanunitofaccountand
twoexchangesofletters,andagreedthatthesecondexchangeof
letterswouldnotbepublished.Thesetexts,whichweredraftedin
French,areattachedtothisCommunication .
2.InordertoenabletheProtocoltobesignedatanearlydate,
»h-3CommissionsubmittedthedrafttextstotheCouncilonthevery
daythenegotiations werecompleted,proposingthatittakethe
necessarystepstoenablethesignaturetotakeplaceassoonas
possible.Atitsmeetingof18Jam*ary1977»"theCouncilmadethe
necessaryarrangementsforthesignature,whichwassubsequently
scheduledtotakeplaceon28February.
iorderthatthisProtocolmaybeconcludedonbehalfofthe
;;nmunity,theCommissionistransmitting totheCouncilherewith
recommendation foradecisionconcludingtheProtocol,towhich
.•i.r*annexedtheCommunitydeclaration andthefirstexchangeof
letters.Thereistobenoformalconclusionofthexmpublished
exchangeofletters.

TheCommissionalsorecommendsthattherepresentatives ofthe
governments oftheMemberStates,meetingintheCouncil,takethe
stepsrequiredfortheimplementation oftheratification ,
'acceptanceorapprovalprocedureslaiddowninArtiol^13(1)of
theProtocol.
TheCommission drawstheCouncil'sattentiontothefactthatthe
HeadoftheGreekDelegationhasaskedfortheapprovalprocedures
tobecompletedasquicklyaspossibleinviewofthedelaywhich
hasoccurredsincetheCommunityundertookon2Deoember1974to
openthenegotiations fortheProtocolatanearlydate.

RSCOKKEUD ATION
for a
COUNCIL DECISION
concluding aFinancial Protocol between theEuropean Eoonomio
Co:amvmi.ty and Greece
THECOUKCIL CarTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Eoonomio
Community ,andinparticular Artiole 238thereof ,
Having regard totherecommendation from theCommission ,
Having regard tothe opinion oftheEuropean P?:r..iament ,
Whereas theFinancial Protocol between theEuropean Economio
ommunity andGreece ,
signed at 3W99SiS .,.. on..?9.?«T|IWW.19ZT .
should beconcluded ,
HAS DECIDED ASFOLLOWS :
Article 1
TheFinancial Protocol between theEuropean Economic Community and
Greece ,thetext ofwhich isannexed tothis Decision ,ishereby
concluded andapproved onbehalf oftheCommunity .
Article 2
ThePresident oftheCouncil shall .oarry out,onbehalf oftheCommunity
thenotification procedure provided forinArticle 13(l )oftheProtocol
Done at.. ........ ............... 19
For the Council
' The President

FINANCIAL PROTOCOL .
BETWEEN THE EUROPEAN ECONOMIC COMMUNITY
-AND GREECE

HIS MAJESTY THE KING OFTHE BELGIANS ,
HER KAJESTY THE QUEEN OPDENI4ARK ,
THE PRESIDENT OFTHE FEDERAL REPUBLIC OFGERMANY ,
THE PRESIDENT OFTHEFRENCH REPUBLIC ,__
THE PRESIDENT OFIRELAND ,
THE PRESIDENT OFTHE ITALIAN REPUBLIC ,
HIS ROYAL HIGHNESS THE GRAND DUKE OFLUXEMBOURG ,
HER KAJESTY THE QUEEN OF ,THE NETHERLANDS , .
r:1MAJESTY THE QUEEN OFTHE UNITED KINGDOM OFGREAT BRITAIN
A'.'DNORTHERN IRELAND ,
cLwdj
1r.Z COUNCIL OPTHE EUROPEAN COMMUNITIES ,
♦
ofthe one part,'
THE PRESIDENT OFTHE HELLENIC REPUBLIC , ,
ofthe other part ,
3CIOUS ofthe need topromote the accelerated development
cSthe Greek economy with aview tofacilitating the pursuit
oftheobjectives oftheAgreement establishing anAssociation
between the European Economic Community and Greece ,
HAVE DESIGNATED astheir Plenipotentiaries :

HIS MAJESTY THE KING OPTHE BELGIANS :
HER MAJESTY THE QUEEN OFDENMARK :
THE PRESIDENT OPTHE FEDERAL REPUBLIC OPGERMANY :
/
»
THE PRESIDENT OFTHE FRENCH REPUBLIC :
THE PRESIDENT OPIRELAND :
■THE PRESIDENT OPTHE ITALIAN REPUBLIC :

HI .ROYAL HIGHNESS THE GRAND DUKE 0?LUXEMBOURG :
'AJEST YTHE QUEEN OPTHE NETHERLANDS :
HER MAJESTY THE QUEEN OFTHE UNITED KINGDOM OPGREAT BRITAIN
ANDNORTHERN 'IRELAND :
THE COUNCIL OFTHE EUROPEAN COMMUNITIES :
THE PRESIDENT OFTHE GREEK REPUBLIC :
WHO ,having exchanged their Full Powers ,found ingood and
due form ,
HAVE AGREED ASFOLLOWS : • •

ARTICLE 1
Within the framework ofthe Association between the
European Economic Community andGreece ,theCommunity shall
participate onthe terms setout inthis Protocol in
measures designed topromote ,byefforts additional to
those made byGreece itself ,the accelerated development
oftheGreek economy and the complementarity ofGreek
agriculture with that oftheCommunity .
ARTICLE 2
1. For thepurposes specified inArticle 1,and fofr a
period expiring on31October 1981 ,anaggregate amount
of280million European units ofaccount (EUA )maybe
committed asfollows :
(a)225million EUA inthe form ofloans from the
European Investment Bank ,hereinafter called the
"Bank ",granted from its ownresources onthe terms
set out' inits Statute ; •
(b)45million EUA intheform ofgrants ;
(c)10million EUA intheform ofloans onspecial terns
granted bytheBank acting oninstructions from the
Community . ■.. .

2. Ofthe loans referred toinparagraph 1(a),the
interest rates for amaximum amount of150million EUA
shall besubsidized at35?per annum ,financed bymeans of
funds indicated inparagraph 1(b),ontheunderstanding
that the cost tothe Community offinancing such subsidies
may not exceed 30million EUA .
'3« The following shall beeligible for financing by
means oftheloans referred toinparagraph 1(a):capifat
projects that have been submitted tothe Bank by
•the Greek State or,with the latter' sagreement ,bypublic
or .private undertakings having their seat oraplace of
business inGreece ,and which :
(a)further the realization ofthe the objectives ofthe
Association Agreement ;and
(b)help toincrease productivity and todiversify the
Greek economy ,andpromote inparticular the improve --
ment ofthe economic infrastructure ofthe country
and themodernization of ,its agriculture ,while
taking into account the objective ofpromoting the
complementarity ofGreek agriculture with that of
the Community .
Examination ofthe eligibility ofprojects and the
granting ofthe loans referred ,toinparagraph 1(a )shall
beundertaken inaccordance with the detailed rules ,
conditions and procedures laid down bythe Bank 'sStatute .
The conditions governing amortization ofeach loan
<shall beestablished onthe basis ofthe economic and
financial characteristics oftheproject tobefinanced .

The loans referred toinparagraph 1(a )shall carry
the same rate ofinterest asthat applied bythe Bank on
the day cfsignature ofthe loan agreement .However ,
priority ingranting loans receiving theinterest rate
subsidy of355referred toinparagraph 2shall begiven to
economic infrastructure oragricultural development
projects ,and tothefinancing ofindustrial projects for
small andmedium-sized undertakings through the inter­
mediary ofGreek development institutions .
This list ofsectors may berevised byagreement
between the Community and Greece . .
Thenon-returnable grants provided for inparagraph 1(b )
are intended ,in .addition tothefinancing ofthe interest
rate subsidy onloans from the Bank ,for technical
co-operation projects ,study projects ,and projects for
modernizing Greek agriculture .
•\
Requests for the financing ofsuch projects shall
beaddressed bythe Greek Government tothe Community .
The loans referred toinparagraph 1(c )shall be
granted for aperiod of30years ,have adeferment of
amortization ofeight years and besubject' tointerest at
anannual rate of2.52C .Investment projects submitted to
theBank bytheGreek State andaimed atmodernizing
Greek agriculture shall beeligible forfinancing by
vmeans ofthese loans .Loans inthis category may be
combined with the loans from .the Bank which are referred
toinparagraph 1(a). -

ARTICLE 3
1„ The amounts tobecommitted each year shall be
distributed asevenly aspossible throughout theperiod of
application ofthis Protocol .During the initial period
ofapplication ,however ,aproportionately higher amount
may ,within reasonable limits ,becommitted .
2. Any funds not committed may ,bythe end oftheperiod
referred toinArticle 2(1),beused ,until exhausted .In
that case ,.the funds shall beused inaccordance with the
same arrangements asprovided for inthis Protocol .
ARTICLE M
Aid from theBank for the execution ofprojects may ,with
the agreement ofGreece ,take the form ofco-financing .
\
. ARTICLE 5
* ~
The execution ,management and maintenance ofschemes
which are the subject offinancing under this Protocol shall
b"theresponsibility ofGreece orofthe other beneficiaries
referred toinArticle 2.
The Community shall ensure that itsfinancial aid is
expended inaccordance with theagreed allocations and to
th<2 best economic advantage . , ■ ■ • .

ARTICLE 6
Greece shall apply tocontracts awarded for the execution
ofprojects financed under this Protocol fiscal andcustoms
arrangements atleast asfavourable asthose applied in
respect ofother international organizations .
Greece shall take the necessary measures toensure that
interest and all other payments due tothe Bank inrespect of
loans accorded under this Protocol are exempted from any
national orlocal taxes orlevies .
For themeasures referred toinArticle 2(6 )and (7),
participation intendering procedures and other procedures
for the award ofcontracts shall beopen ,onequal terms ,to
all natural orlegal persons ofthe Member States and of
Greece .However ,for projects ofa-scale sufficiently
'limited sothat inpractice they are ofinterest solely to
Greek undertakings ,anaccelerated tendering procedure
involving ashorter period for the submission oftenders
for the placing ofbids may beorganized after approval by
the appropriate Community body .
ARTICLE 7
•/
The loans may beused tocover expenditure onimports
orthe domestic expenditure required forcarrying out
approved capital projects ,including expenditure onplanning ,
onthe services ofconsulting engineers and ontechnical
assistance .

ARTICLE 8
Where aloan isaccorded toabeneficiary other than
the Greek State ,theprovision ofaguarantee bythe latter
may berequired bytheBank asacondition ofthe grant of
the loan .
ARTICLE 9
Throughout the duration ofthe loans accorded pursuant
tothis Protocol ,Greece shall undertake tomake available
todebtors enjoying such loans ortotheguarantors ofthe
loans the foreign currency necessary .for the payment of
interest ,commission and other charges and for therepayment
ofcapital .
ARTICLE 10
The results offinancial co-operation may beexamined
wi';hin the Association Council .
ARTICLE 11
The Declaration -and the Exchange ofLetters annexed to
tr.is Protocol shall form anintegral part thereof .
ARTICLE 12
This Protocol shall beannexed tothe Agreement
olishing anAssociation between theEuropean Economic
iunity and Greece .

ARTICLE 13
1. This Protocol shall besubject toratification ,
acceptance orapproval inaccordance with the Contracting
Parties' ownprocedures ;the Contracting Parties shall
notify each other that the procedures necessary tothis
end have been completed .
2. This Protocol shall enter into force onthe first
day ofthemonth following the date onwhich the
notifications provided for inparagraph 1have been given .
ARTICLE 14
This Protocol xsdrawn upintwo copies inthe Danish ,
Dutch ,English ,French ,German ,Italian andGreek languages ,
each ofthese texts being equally authentic .

ANNEX
Declaration ofthe European Economic Community
onArticle 2ofthe Financial Protocol
1. The European unit ofaccount used toexpress the
amounts specified inArticle 2ofthe Financial Protocol
isdefined asthe sumofthe following amounts inthe
currencies oftheMember States ofthe Community :
German mark 0.828
Pound sterling 0.0885
French franc 1.15
Italian lira 109
Dutch guilder .0.286
Belgian franc 3.66
Luxembourg franc 0.14
Danish krone 0.217
Irish pound 0.00759
2. The value ofthe European unit ofaccount inany
given currency isequal tothe sumofthe equivalent in
that currency ofthe amounts ofcurrency referred toin
paragraph 1.Itiscalculated bythe Commission using
daily market exchange rates .
The daily rates ofexchange inthevarious national
currencies arepublished intheOfficial Journal ofthe
European Communities .

EXCHANGE OFLETTERS
A.Letter from the Chairman ofthe Community delegation
Sir ,
Ihave thehonour toinform you that theCommunity
considers that the problem ofthe consequences ofthe
possible accession ofGreece totheCommunity for the
provisions ofthe second EEC-Greece Financial Protocol
shquld bedealt with inthe framework ofthe accession
negotiations .Inthis respect ,Imust remind you ofthe
general principle whereby nofurther financial commZft-xients
under the Protocol may beundertaken from the date of
the entry into force ofthe Accession Treaty .
The accession negotiations must therefore include
detailed rules toensure aharmonious transition ,as
regards financial aid ,from theregime ofanassociated
country tothat ofaMember State with access ,under the
usual conditions ,tothevarious Community funds and
financial instruments.' V ■
Iwould begrateful ifyouwould .acknowledge receipt
ofthis letter . .i ■■•
Please accept ,Sir ,theassurance ofmyhighest
consideration . ' -
(s.)Chairman oftheCommunity
delegation

B.Letter from the Chairman ofthe Greek delegation
Sir ,
Ihave the honour toacknowledge receipt ofyour
letter oftoday 'sdate inwhich you informed meofthe
following :
"Ihave the honour toinform you that the
Community considers that the problem ofthe consequences
ofthe possible accession ofGreece tothe Community
for the provisions ofthe second EEC-Greece Financial
Protocol should bedealt with inthe framework oftheaccession
negotiations .Inthis respect ,Imust remind you of
thegeneral principle whereby nofurther finane ialecnnj /f-
orients under the Protocol may beundertaken from the
date ofthe entry into force ofthe Accession Treaty .
The accession negotiations must therefore include
detailed rules toensure aharmonious transition ,as
regards financial aid ,from the regime ofanassociated
country tothat ofaMember State with access ,under the
usual conditions ,tothe various Community funds and
financial instruments .
Iwould begrateful ifyouwould acknowledge
receipt ofthis letter ."
Please accept ,Sir ,the assurance ofmyhighest ;
consideration .
(s.)Chairman ofthe
Greek delegation

EXCHANGE OFLETTERS
(unpublished )
Letter from the Chairman ofthe Community delegation
Sir , "
Inorder tomeet the concern expressed bythe
'•eek authorities ,theCommunity will apply theprovision
>ntained inthe second sentence ofArticle 3(1 )ofthe
lrotocol with themaximum flexibility compatible with
the procedures and rules ofthe Community and ofthe Bank ,
particularly asregards theuse ofloans with interest
rate subsidies referred toinArticle 2(2 )ofthe Protocol
and ofaids from budgetary resources asreferred toin
Article 2(6 )and (7).
The examination ofproject applications may accordingly
begin assoon asthe Protocol issigned soastoenable
financial co-operation tobeimplemented immediately after
itenters into force .However nofinancing decision may
betaken before the entry into force provided for in
Article 13ofthe Protocol .
Ishould begrateful ifyouwould acknowledge receipt
ofthis letter .
Please accept ,Sir ,theassurance ofmyhighest
consideration .
(s„)Chairman ofthe
Community delegation

Letter from the Chairman ofthe Greek delegation
Sir ,
Ihave the honour toacknowledge your letter of
today 'sdate inwhich you informed meofthefollowing :
"Inorder tomeet theconcern expressed bythe
Greek authorities ,the Community will apply the
provision contained inthe second sentence of
Article 3(1 )ofthe Protocol with the maximum
flexibility compatible with the procedures and rules
ofthe Community and ofthe Bank ,particularly as
regards the use ofloans with interest rate subsidies
referred toinArticle 2(2 )ofthe Protocol and of
aids from budgetary resources asreferred toin
Article 2(6 )and (7).
The examination of .project applications may
accordingly begin assoon astheProtocol issigned so
astoenable financial co-operation tobeimplemented
immediately after itenters into force .However no
financing decision may betaken before the entry into •
force provided for inArticle 13ofthe Protocol .
Ishould begrateful ifyou would acknowledge
receipt ofthis letter ."
Ihave the honour toinform you that the Greek
delegation ,for its part ,expects the Community ,in
appraising the flexibility which itisprepared toshow in
applying Article 3(1 )oftheProtocol ,not tooverlook
the period oftime which has .elapsed since the signing
ofthe Protocol .
Please -accept ,Sir ,the assurance ofmyhighest
consideration . ■ -
(s.)Chairman ofthe
Greek delegation

FINANCIAL RECORD
forthe1977Budget
A.PART1:INTEHVENTION APPROPRIATICI
(forexistingandnewprojects)
1.RELEVANTBUDGETHEADINGCODE
Article9^2
2.TITLEOPBUDGETHEADING
"Financialcooperation withcertainnon-membercountries' *
3.LEGALBASIS .'
Article238oftheEECTreaty ,:
4.DESCRIPTION ,OBJECTIVE(S )ANDJUSTIFICATION OFTHEPROJECT
SecondfinancialprotocolbetweenEECandGreece,signed
28February1977»annexedtotheAssociation Agreemeptbetween
EECandGreece.
5.APPROPRIATION (inu.a.)
Nocommitmentwillbemadeinthe1977Budgetundertheheadof
thefinancialaidprovidedforinthefinancialprotocol(the
budgetheadingconcernedisatokenentry).Thebudgetappropriations .
maybeusedonlyfromthe1978financialyearonwards,afterthe
protocolhasbeenratified.Thisprotocolprovidesforasumof
55millionEUAtobecommittedupto31October1981frombudget
appropriations (withanadditional225millionEUAinloansfromthe
EIB).Thebreakdownofthissumwillbedecidedannuallyinthe
courseofthebudgetprocedure. '
6.TTPEOFCOBTROLTOBSAPPLIED
AslaiddownintheFinancialRegulationof25April1973applicable
totheGeneralBudgetoftheEuropeanCoroiayaities *

FART 2:ADDITIONAL LATA TOBEPROVIDED FOR A>IEWPROJECT
7.COST OPTHEPROJECT (FORTHEWHOLE OFITSEXPECTED DURATION )
55million SUAcharged against the Community Budget forthe vnole
duration ofapplication oftheprotocol ,i„e »UT>to31October I98I .
8.INFORMATION' REGARDING STAFFING AND THE APPROPRIATIONS FOR
ADMINISTRATIVE EXPENDITURE NECESSARY FOR THE IMPLESSEE "?ATIO !!
OFTHE PROJECT
Theproject will beimplemented within theframework ofthe
Commission 'sestablishment plan .
9.PROJECT FINANCED FROM :
The financial aid for the total duration ofthe financial protocol
will "befinanced from Community Budget appropriations (55Billion EUA )
andEIBownresources (225million EUA)„
Thebudget appropriations will bebroken i'.r,n*asfollows s
10million EUA intheform ofspeciallo&usi
45million EUA inthe form ofgrants .