COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 12.01.1996 
COM(95) 557 final 
Proposal for a 
COUNCIL REGULATION (EC) 
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 
(presented by the Commission) 

EXPLANATORY Ml'MORANDl )M 
Community rules on the common agricultural policy impose an obligation on Member States 
to buy agricultural products covered by an intervention mechanism when the producers present 
such products to them. This involves expenditure by the Member States which is reimbursed 
by the Commission two months later. 
Since most Member States must borrow the funds necessary for intervention purchases, 
Community rules provide for the reimbursement of financing costs on the basis of a uniform 
rate for the whole Community. 
In 1993, the Council adopted rules for Member States paying interest rates much higher than 
the uniform rate (Council Regulation (EEC) No 1571/93 of 14 June 1993 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, OJ No L 154, 25.6.1993, 
p.46.) 
Under these rules, the EAGGF will reimburse any Member State paying an interest rate more 
than double the uniform rate the interest paid above that threshold. Interest paid between the 
uniform rate and double that rate remains the responsibility of the Member State concerned. 
This provision was to apply for three years. It is proposed that the Council extend it for a 
second one-year period to cover the 1996 EAGGF financial year. 
The measure is based on Article 3(2) of Council Regulation (EEC) No 729/70 of 21 April 1970 
on the financing of the common agricultural policy (OJ No L 94, 28.4.1970, p. 13.) which gives 
the Council sole responsibility for adopting rules for financing measures implemented under 
the CAP and the principle of subsidiarity referred to in Article 3b of the EC Treaty does not 
therefore apply. 
The continuance of the scheme for Member States bearing high financial charges, established 
by Council Regulation (EEC) No 1571/93, requires the adoption of this Regulation. 
Proposal for a 
COUNCIL REGIJLLATïQN (EC) 
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 UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the 
common agricultural policy(1), and in particular Article 3(2) thereof, 
Having regard to the proposal from the Commission(2), 
After consulting the Fund Committee, 
Whereas, for intervention operations for which a unit amount has not been set by market 
organization rules, basic Community financing rules have been set by Regulation (EEC) 
No 1883/78(3), in particular as to the method of establishing the amounts to be financed, the 
financing of expenditure resulting from the mobilization of the funds needed for intervention 
buying, 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; 
(1) OJ No L 94, 28.4.1970, p. 13. Regulation last amended by Regulation (EC) No 1287/95 
(OJ No L 125, 8.6.1995, p. 1). 
(2) OJ No C 
(3) OJ No L 216, 5.8.1978, p.1. Regulation last amended by Regulation (EEC) No 1571/93 (OJ 
No L 154, 25.6.1993, p. 46). 
Whereas Article 5 of Regulation (EEC) No 1883/78 provides that the interest charges incurred 
by Member States in mobilizing the funds used for public intervention buying are to be 
financed by the Community at a uniform interest rate; 
Whereas it is possible that in a Member State the buying into public intervention of agricultural 
products can be financed only at interest rates which are substantially higher than the uniform 
interest rate; 
Whereas, in such cases, provision should be made for a correcting mechanism to compensate 
for a part of the difference between the particularly high interest rate paid by the Member State 
and the uniform interest rate, while leaving responsibility for a part of the difference to the 
Member State in order to encourage it to seek the least costly financing method; 
Whereas the mechanism introduced to that end in Article 5 of Regulation (EEC) No 1883/78 
by Regulation (EEC) No 1571/93(4) for a period of three years is functioning satisfactorily; 
whereas that provision expires at the end of the 1995 financial year; 
Whereas the substantial differences between the costs of financing noted in 1993 and which 
were the reason for the introduction of that mechanism continue to exist; whereas it would 
therefore be useful to extend the period of application of the provision concerned; 
HAS ADOPTED THIS REGULATION: 
(4) OJ No L 154, 25.6.1993, p 46 
Article 1 
The third subparagraph of Article 5 of Regulation (EEC) No 1883/78 is hereby replaced by the 
following: 
"The first paragraph notwithstanding, if the interest rate borne by a Member State is more than 
twice the uniform interest rate, the Commission may, for the financial year 1996, 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 1995. 
INANCIAL STATEMENT 
BUDGET HEADING:B1-1012 Bl-1231 APPROPRIATIONS: 
ECU 84 and ECU 8 million 
2. TITLE: 
Council Regulation 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 
3. LEGAL BASIS: 
Regulation (EEC) No 729/70 of 21 April 1970 
AIMS: 
To extend by one year the derogation from the application of the uniform rate introduced by Regulation (EEC) No 
1571/93 
FINANCIAL IMPLICATIONS: PERIOD OF 12 
MONTHS 
(ECU million) CURRENT 
FINANCIAL 
YEAR 
(95) 
(ECU million) FOLLOWING 
FINANCIAL 
YEAR 
(96) 
(ECU million) 
5.0. EXPENDITURE 
- CHARGED TO THE EC BUDGET 
(REFUNDS/INTERVENTION) 
- NATIONAL AUTHORITIES 
-OTHER 
5.1. REVENUE 
- OWN RESOURCES OF THE EC 
(LEVEES/CUSTOMS DUTIES) 
- NATIONAL 
1997 
(ECU million) 
5.0.1. ESTIMATED EXPENDITURE 
5.1.1. ESTIMATED REVENUE 1998 
(ECU million) 1999 
(ECU million) 2000 
(ECU million) 
5.2. METHOD OF CALCULATION: 
The cost of applying an identical Regulation (No 1571/93) was around ECU 13.5 million for the 1993 and 1994 
EAGGF financial years. 
The reduction in annual appropriations is a result of the reduction in public stocks and the gradual disappearance of 
existing intervention stocks of tobacco. 
60. CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT 
CHAPTER OF THE CURRENT BUDGET? YES 
6 1. CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT 
BUDGET? NO 
6 2. WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6 3. WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? NO 
YES 
I OBSERVATIONS This Regulation is identical to Council Regulation (EEC) No 1571/93 of 14 June 1993 (OJ No L 154, 
25.6.1993, p. 46). To date, these provisions have been applied to Greece. 
H-
ISSN 0254-1475 
COM(95) 557 final 
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ISBN 92-77-95961 -4 
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