COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(93) 19 final 
Brussels, 9 February 1993 
Proposal for a 
COUNCIL REGULATION (EEC) 
anending regulation (EEC) No 1883/78 laying down general rules 
for the financing of interventions by the European Agricultural 
Guidance and Guarantee Fund, Guarantee Section 
2 
EXPLANATORY MEMORANDUM 
1. The attached draft Regulation amends Council Regulation (EEC) No. 1883/78 
on general rules for the financing of intervention by the EAGGF, on two 
points : 
it makes permanent what has hitherto been a derogation, introduced in 
1988, in regard to the uniform interest rate (point 3), 
it introduces a new derogation in favour of a Member State where the 
interest rates for financing are extremely high (point 2). 
2. Council Regulation (EEC) No. 1883/78 sets rules covering inter alia the 
financing of expenditure resulting from tying up the funds needed for 
intervention purchasing. 
Article 5 of that Regulation stipulates that the interest charges incurred 
by Member states in mobilising the funds used to purchase intervention 
products are to be financed at Community level using an interest rate 
uniform throughout the Community. 
In a Member state where national interest rates are very high use of the 
uniform interest rate has led to abnormal movements of products intended 
for intervention to other Member states and so disturbed the normal 
movement patterns. It is necessary therefore to introduce a derogation 
from the uniform rate rule. 
At present the interest rate in Greece is more than double the uniform 
rate. The proposed derogation will allow Greece to be repaid part of its 
additional costs. 
3. One of the measures introduced in 1988 following the decision on budgetary 
discipline was a derogation from the uniform interest rate rule, for the 
period 1989 to 1992, whereby, for Member States where the interest rate 
borne is lower than that fixed, the uniform interest rate may be set at a 
level below its representative level. 
This derogation is a practical application of the rule set in the first 
paragraph of Article 2 of the Community's Financial Regulation that budget 
appropriations must be used in line with the principles of sound financial 
management, in particular economy end cost-effectiveness. The derogation 
should therefore be converted into a permanent provision of Regulation 
(EEC) No. 1883/78. 
3 
Proposal for a 
COUNCII REGULATION (EEC) 
amending regulation (EEC) No 1883/78 laying down general rules 
for the financing of interventions by the European Agricultural 
Guidance and Guarantee Fund, Guarantee Section 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having to Council Regulation (EEC) No. 729/70 of 21 April 1970 on the financing 
of the common agricultural policy^1), as last amended by Regulation (EEC) 
No 2048/88(2), and in particular Article 3(2) thereof, 
Having regard to the proposal from the commission, 
Having regard to the opinion of the European Parliament, 
(1) OJ No. L 94, 28.04.1970, p.13 
(2) OJ No. L 185, 15.07.1988, p. 1 
1 
Whereas, for intervention operations for which a unit amount has not been set 
by market organisation rules, basic Community financing rules have been set by 
Regulation (EEC) No 1883/78<3), as last amended by Regulation (EEC) 
No 787/89(4); whereas this applies in particular to the method of 
establishing the amounts to be financed, the financing of expenditure 
resulting from tying up the funds needed for intervention purchasing, the 
valuation of stocks to be carried over from one year to another and the 
financing of expenditure resulting from the physical operations of storage; 
Whereas Article 5 of Regulation (EEC) No 1883/78 provides that the interest 
charges incurred by Member states in mobilising the funds used to purchase 
intervention products are to be financed at Community level at a uniform 
interest rate; whereas experience has shown that in a Member State where 
interest rates are very high this can lead to abnormal movements of products 
to intervention in other Member states and so disturb normal movement 
patterns; whereas it is necessary to introduce a derogation from the uniform 
rate rule in order to prevent such disturbance; 
Whereas the possibility afforded by the second paragraph of Article 5 of 
Regulation (EEC) No 1883/78(5) of setting the uniform interest rate at a 
level below its representative level amounts to a practical application of the 
principles set out in the first paragraph of Article 2 of the Community's 
Financial Regulation^ ); whereas this provision should be put on a permanent 
basis, 
(3) OJ No. L 216, 05.08.1978, p.l. 
(4) OJ No. L 85, 30.03.1989, p.l. 
(5) OJ No. L 185, 15.07.1988, p.6. 
(6) OJ No. C 80, 24.03.1991, p.l. 
HAS ADOPTED THIS REGULATION: 
Article 1 
Article 5 of Regulation (EEC) No. 1883/78 is hereby amended as follows: 
1. In the second paragraph the words "in respect of the financial years 1989 to 
1992" are deleted. 
2. The following third paragraph is added : 
"The first paragraph notwithstanding, if the interest rate borne by a Member 
State is more than twice the uniform interest rate the Commission may, in 
financing the interest costs incurred by that Member state, apply the 
uniform rate of interest plus the difference between double that rate and 
the actual rate borne by the Member State." 
Article 2 
This Regulation shall enter into force on the day following its publication in 
the Official Journal of the European communities. 
It shall apply to expenditure incurred from 1 October 1992. 
This Regulation shall be binding in its entirety and directly applicable in all 
Member States. 
Done at Brussels, For the Council 
The President 
& 
FINANCIAL STATEMENT 
DATE 
1. BUDGET HEADING: Bl - ^O-fZ, Bl - 1721 APPROPRIATIONS : 
2. TITLE: Council Regulation amending Regulation (EEC) No 1883/78 laying down general rules 
for the financing of interventions by the EAGGF - Guarantee Section 
3. LEGAL BASIS: Regulation (EEC) No 729/70 of 21 April 1970 
4. AIMS OF PROJECT: Make a derogation from the principle of a uniform rate 
5. FINANCIAL IMPLICATIONS PERIOD OF 
12 MONTHS 
Mio ECU CURRENT FINANCIAL 
YEAR 
Mio ECU FOLLOWING 
FINANCIAL YEAR 
Mio ECU 
5.0. EXPENDITURE 
- CHARGED TO THE EC BUDGET 
(REFUNDS/INTERVENTION) 
- NATIONAL ADMINISTRATION 
- OTHER 
5.1. REVENUE 
- OWN RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 
- NATIONAL 4.2 4.2 
1994 1995 1996 1997 
5.0.1. ESTIMATED EXPENDITURE 
5.1.1. ESTIMATED REVENUE 
5.2. METHOD OF CALCULATION: 
See attached table 
6.0. CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE 
CURRENT BUDGET? NO 
6.1. CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? YES 
6.2. IS A SUPPLEMENTARY BUDGET NECESSARY? NO 
6.3. WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? YES 
OBSERVATIONS : 
calculation of costs for public storage operations in Greece 
Financial year 1993 
(on the basis of assumptions made in letter of amendment to PDB 93). 
Bl-102: 
Durum wheat 
Bl-1721: 
Tobacco Average 
stock 
t 
600.000 
600.000 
22.505 Cost 
ECU A/t 
74,00 
449,97 Rate 
PDB 
9,5% 
9,6% Amount 
ECU A 
4.218.000 
4.218.000 
972.151 
972.151 
Total 5.190.151 Amount 
ECU B 
4.829.610 
4.829.610 
1.095.614 
1.095.614 
5.925.224 
Uniform Amount Amount 
rate 
ECU A ECU B 
4.562.593 5.224.169 
10,3% 4.562.593 5.224.169 
1.040.618 1.172.777 
10,3% 1.040.618 1.172.777 
5.603.211 6.396.946 ^ 
Supplement Additional Additional 
applied cost cost 
to Greece ECU A ECU B 
2.973.813 3.405.016 
6,7% 2.973.813 3.405.016 
678.255 764.394 
6,7% 678.255 764.394 
3.652.069 4.169.410 
I 

ISSN 0254-1475 
COM(93) 19 final 
DOCUMENTS 
EN 03 
Catalogue number : CB-CO-93-023-EN-C 
ISBN 92-77-52275-5 
Office for Official Publications of the European Commnnities 
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