17.11.  75 Official  Journal  of the  European  Communities No C 263/5 
— in promoting  investment,  governments  must  bear 
in mind  the need  to respond  to new  demand; 
— that  incomes  be  protected  as  part  of  the 
restructuring  policy. 
5.2. The  Committee  concludes  by asserting  that 
the process  of joint  formulation  of compatible 
economic  policies  is necessary  for the survival  of the 
Community.  It urges  the  Commission  and  the 
Council  to take  brave  and  positive  steps  to turn  the 
hope  for  economic  and  social  solidarity  in the 
Community  into  a reality. 5.3. This  hope  will  be all the more  translated  into 
tangible  realities  for the peoples  of Europe  if it takes 
account  of  national  characteristics  and  if the 
governments  of the  Member  States  situate  their 
economic  policies  within  the  context  of objectives 
worked  out democratically  at Community  level. 
Done  at Brussels,  29 May  1975. 
The Chairman 
of the  Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the restructuring  of the  economies 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 27 November  1974,  the  Commission  referred  the  abovementioned  subject  to the 
Economic  and  Social  Committee  under  Article  198  of the  Treaty  establishing  the 
European  Economic  -Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 130th  plenary  session, 
held in Brussels  on 28 and  29 May  1975. 
The Opinion  is published  below. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the letter  dated  27 November  1974, 
in which  Commission  Vice-President  Haferkamp 
invited  the  Committee  to 'embark  upon  and  pursue 
a discussion  on the need  for structural  improvements 
in the  economies  of the  Member  States,  and  on the 
pattern  such  adjustments  should  follow'; 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof; 
Having  regard  to the decision  taken  by the Bureau  of 
the Economic  and  Social  Committee  on 18 December 
1974,  instructing  the  Section  for  Economic  and 
Financial  Questions  to prepare  an Opinion  on the 
restructuring  of the economies; 
Having  regard  to the  report  drawn  up  by  the 
Economic  Policy  Committee  of the  Commission  on 
'The  Community's  economic  situation  and  medium-
term  outlook'; Having  regard  to the  earlier  submissions  of the 
Economic  and  Social  Committee  on  the  general 
economic  policy  of the Community,  in particular  the 
— Opinion  of 28 January  1971  on the  draft  third 
medium-term  economic  policy  programme; 
— Opinion  of  18  October  1974  on  the 
Commission's  annual  report  on  the  economic 
situation  in the Community, 
— information  report  of the  Section  for  Economic 
and Financial  Questions  of 29 January  1975  on 
inflation; 
— Opinion  of 26  February  1975  on the  present 
economic  situation  in the  Community  and  the 
cyclical  policy  to be pursued; 
— Opinion  of 29  May  1975  on  the  degree  of 
convergence  of  Member  States'  economic 
No C 263/6 Official  Journal  of the  European  Communities 17.11.  75 
policies  and  the  extent  to which  Member  States' 
economic  policies  comply  with  Community 
objectives; 
Having  regard  to the  Opinion  of the  Section  for 
Economic  and  Financial  Questions  of 6 May  1975; 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr Friedrichs; 
Having  regard  to the discussions  at its 130th  plenary 
session  on 28 and  29 May  1975,  sitting  of 28 May; 
Whereas  the  restructuring  process  in agriculture, 
which  also  has  definite  relevance  for  the  general 
problem  of economic  restructuring,  has  already  been 
discussed  in great  detail  in the  Committee's  Study 
concerning  the  progress  report  on  the  common 
agricultural  policy,  and  the  particular  structural 
problems  of agriculture  are  therefore  not  dealt  with 
in the present  Opinion; 
Whereas  the Committee  has  undertaken  this  work  as 
a contribution  to the  fourth  medium-term  economic 
policy  programme, 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 77 votes  in favour,  12 against  and  16 abstentions: 
1. The  problem 
1.1. The  Community  economies  — and  the  entire 
world  economy  — are  in trouble.  They  are plagued 
— in varying  degrees  — by high  unemployment, 
under-utilization  of  production  capacity,  and  a 
continuing  high  rate  of inflation.  Furthermore,  most 
Member  States  are  running  hefty  balance-of-
payments  deficits.  These  problems  have  been  with  us 
for some  time  but  they  have  recently  been 
exacerbated  by external  influences,  and  the  question 
arises  whether  and  to what  extent  the  economic 
structure  of the  Community  should  be adapted  to 
changing  realities.  The  issue  is all the more  relevant 
because  the Community  must  be enabled  to make  its 
due contribution  to eradicating  world  economic 
problems. 
1.2. The  Committee  would  point  out  that  the 
manifest  economic  difficulties  of the  Community 
have  resulted  from  a complex  of factors  of varying 
importance.  It therefore  emphasizes  the  need  to 
clarify  a number  of preliminary  questions  concerning 
the restructuring  of  the  economies.  The  first 
necessity  is to carry  out  a thorough  analysis  of the 
causes  of the present  situation  and  its possible  future trends,  so as to be able  to arrive  at a clear  definition 
of the  objectives  to be pursued  and  work  out  a list 
of measures  to be taken  at national  and  Community 
level. 
1.3. As  regards  this  analysis,  the  Committee 
considers  that  great  care  must  be  taken  to 
differentiate  between  structural  and  cyclical  factors. 
This  differentiation  is important  because  a medium-
term  restructuring  policy  cannot  be  tailored  to 
factors  which  are  of current  significance  but  may 
change  in importance  within  a relatively  short  time. 
The Committee  is aware  that  it may  be difficult  to 
make  this  differentiation  in  individual  cases, 
particularly  since  any  assessment  of possible  future 
changes  is unavoidably  subject  to a greater  or lesser 
degree  of uncertainty.  Nevertheless,  it emphasizes 
that changes  can  only  be regarded  as structural 
factors  when  they  are  permanent  or long-lasting  or 
when  they  in turn  trigger  off  or make  necessary 
structural  shifts  which  are permanent  or long-lasting. 
Cyclical  and  structural  factors  are,  however,  often 
interrelated  and  influence  one another. 
1.3.1.  The  aforementioned  report  of  the 
Commission's  Economic  Policy  Committee  contains 
very  useful  data  on major  structural  similarities  and 
disparities  between  the  Member  States.  The  report 
includes  an analysis  of disparities  between  social 
structures,  and  this  is particularly  valuable  since  such 
disparities  are very  germane  to the  formulation  of a 
common  policy. 
1.4. Applying  the  methodological  distinction 
drawn  in 1.3  above,  the  Committee  considers  that 
the Community's  present  economic  problems  have 
indeed  been  conditioned  by a series  of structural 
factors  which  justify  an economic  restructuring  of 
the Community.  Changes  have  taken  place,  both  in 
the Community's  economy  and  in  the  world 
economy,  and  in both  cases  some  of the  factors 
involved  have  been  problems  for  a long  time,  while 
others  have  only  recently  made  matters  more 
difficult  or  have  thrown  up completely  new 
problems. 
1.5. The  Committee  considers  that  specific 
structural  problems  have  been  generated  by three 
types  of domestic  economic  changes. 
1.5.1.  Cyclical  unemployment  has  been  joined  by 
increasing  structural  unemployment.  The 
17.11.  75 Official  Journal  of the  European  Communities No C 263/7 
determinants  include  regional  imbalances  coupled 
with  differences  as regards  infrastructure,  shifts  in 
structural  patterns  connected  with  international 
competition  and  trends  towards  saturation  in certain 
sectors,  as well  as the increased  capital  expenditure 
needed  per  workplace.  This  produces  a situation 
where  an inadequate  or structurally  changing  job 
supply  is coupled  with  an insufficiently  adjusted 
manpower  structure. 
1.5.2.  Secondly,  the  Committee  would  point  out 
that inflation  in the Community  is likewise  to some 
extent  of a structural  nature.  This  does  not preclude 
cyclical  price  fluctuations  — and  thus  the chance  of 
a return  to a higher  degree  of price  stability  — but 
the fluctuations  clearly  occur  either  side  of a 
relatively  high  basic  level.  The  main  reason  for the 
partially  structural  character  of inflation  is probably 
the reduced  responsiveness  of the  free  market  price 
and adjustment  mechanism,  a pointer  to this  being 
the fact  that  cyclical-policy  curbs  now  have  at least 
in the short  term  a quantitative  (production  cutback) 
rather  than  a price  (reduction)  impact. 
1.5.3.  Finally,  the  Committee  considers  that  the 
conventional  assessment  of economic  growth  mainly 
in quantitative  terms  has been  very  much  called  into 
question  by new  structural  problems.  This  view  is 
partially  based  on the  social  cost  of growth  (e.g. 
adverse  effect  on the  environment),  the  importance 
of which  is more  clearly  recognized  than  in the past. 
It also  relates  to the social  indicators  of growth  (e.g. 
improved  provision  of collective  services  and  goods), 
to which  greater  importance  is also  attached.  The 
increased  emphasis  on the social  relevance  of growth 
may result  in a reduction  in the growth  of the gross 
national  product.  A similar  influence  is probably 
exerted  by the  fact  that  people  are  spending  a 
smaller  and  smaller  proportion  of their  lives  at work 
(shorter  working  week,  longer  holidays,  longer  time 
spent  in education,  earlier  retirement). 
1.5.4.  As  opposed  to  the  above  curbs  on 
quantitative  growth,  there  is a potential  for 
productivity  increases  which  can  have  a 
compensating  effect.  Mention  must  be made  in this 
connection  of  specialization,  movement  of 
production  to lowest-cost  locations,  promotion  of 
technological  and  scientific  advance,  and  the further 
intensification  of the international  division  of labour. 1.6. The  fundamental  shift  in the  energy  supply 
field  is of course  the paramount  structural  factor  at 
world  level  to  which  the  EEC  must  react. 
Consequently  the  Committee  will  pay  particular 
attention  below  to the resultant  structural  problems. 
But other  changes  of structural  significance  are in 
progress  or have  already  taken  place  in the  world 
economy.  A particularly  striking  example  is the 
increasing  influence  of the  developing  countries, 
which  are  pressing  — and  justly  so — for  a 
reorientation  of the world  economy  and  a change  in 
the pattern  of use  of goods,  services  etc.  This  is 
bringing  about  a radical  change  in the international 
division  of labour  between  raw  material  suppliers  on 
the one  side,  and  suppliers  of industrial  goods  on the 
other. 
1.6.1.  The  world  food  problem  in connection  with 
the increase  in the world's  population  must  also  be 
seen in this  context.  A solution  to this  extremely 
urgent  problem  will  not  be possible  without  active 
assistance  from  the  developed  countries  (and  the 
EEC  countries  fall  under  this  head)  and  adjustment 
of their  agricultural  structures. 
1.6.2.  A  further  factor,  which  has  at least  an 
indirect  influence  on the  economic  restructuring  of 
the Community,  is the  current  disarray  and 
uncertainty  in the monetary  sphere.  The  Committee 
is of the opinion  that  reform  of the monetary  system 
both  within  the  EEC  and  at the  world  level  is of 
considerable  importance  for  resolving  the 
restructuring  problem.  The  Committee  emphasizes 
that a solution  to the  monetary  problem  in the 
Community  is particularly  urgent  and  that  such  a 
solution  could  go a long  way  towards  stabilizing  the 
international  monetary  system. 
1.6.3.  Finally,  the Committee  would  point  to the 
increasing  importance  of the  multinationals  both  in 
the world  economic  context  and  as regards  the 
economic  and  social  policies  of individual  States. 
The Committee  is convinced  that  the multinationals 
can and  should  play  a beneficial  role  in regard  to the 
necessary  transfer  to the  developing  countries  of 
technical  and  economic  know-how.  Nevertheless,  it 
considers  that  the  multinationals'  activities  should 
be integrated  into  the  framework  dictated  by  a 
positive  objective  of this  kind.  This  would  include 
the requisite  supply  of  information  to  and 
consultation  of the employees  of the multinationals. 
2. The  objectives  of restructuring  in the Community 
2.1. The  structural  changes  which  have  taken 
place  in the  Community  and  elsewhere  are  not 
restricted  to the energy  sector  or to a deterioration  in 
No C 263/8 Official  Journal  of the  European  Communities 17.11.  75 
the terms  of trade.  In view  of this,  is it sufficient  to 
confine  restructuring  of the Community  to adjusting 
industrial  and  economic  structures,  in the  narrow 
meaning  of the  terms,  to changed  conditions?  Or 
has it not  become  essential  to undertake  a far-
reaching  reorganization  of economic  objectives  and 
the whole  structure  of the economy? 
The Committee  assumes  that  in the  final  analysis 
this is a political  question  and  as such  cannot  be 
answered  objectively.  Nevertheless,  the  Committee 
would  like  to stress  some  points  on which  it reached 
a general  consensus  during  discussion. 
2.1.1.  Adjustment  to structural  change  due  to 
external  or internal  factors  calls  for a high  degree  of 
economic  flexibility.  Consequently,  it  is  of 
considerable  importance  that  the market  mechanism 
be maintained  and  improved.  Economic  monopolies 
and dominant  positions  must  be dismantled  under 
Articles  85 and  86  of the  Treaty  .and  effective 
measures,  including  action  to support  small-  and 
medium-sized  enterprises,  must  be  taken  to 
strengthen  competition. 
2.1.2.  Economic  policy  must  take  an active  role  in 
this. It should  intervene  in cases  where  the  market 
mechanism  breaks  down  or where  market  forces 
cannot  resolve  the problems  on their  own  or have  no 
effect  on them.  This  requires  a clear  concept  of the 
objectives,  a concept  which  must  constantly  be 
adapted  to changing  circumstances.  From  the  point 
of view  of  regulatory  policy,  fundamental 
importance  therefore  attaches  to making  a clear 
distinction  between  (a)  economic  restructuring 
problems  which  can  be resolved  by market  forces 
and (b)  economic  restructuring  problems  which 
market  forces  cannot  resolve,  or can  resolve  only 
under  unacceptable  conditions.  The  Committee 
points  out  that  this  distinction  is not  necessarily 
identical  with  the one  it has  made  between  cyclical 
and structural  factors. 
2.1.3.  Economic  growth  still  remains  an important 
objective  of economic  policy,  even  though  it must  be 
assumed  that  growth  rates  will  be lower  in the 
future.  Restructuring  is impossible  without  economic 
growth,  and  the  Committee  unanimously  rejects 
'zero'  growth  rates,  if only  because  of  the 
employment  problems  they  would  entail.  The 
freedom  of the  consumer  must  be maintained,  but 
efforts  should  be made  on the  basis  of economic 
criteria  to improve  the  quality  • and durability  of 
products  and  to avoid  wastage.  In addition,  greater 
consumer  protection  must  not  be  neglected. Improvement  of the  supply  of collective  goods  will 
continue  to be an important  and  urgent  task. 
2.1.4.  Although  the  oil crisis  made  it painfully 
clear  how  dependent  the Community  is on decisions 
taken  by other  countries,  the Community's  external 
trade  policy  must  continue  to  be  geared  to 
liberalization  of world  trade.  Given  the high  degree 
to which  the  Community's  economy  is interlinked 
with  the world  economy,  autarchy  and  protectionism 
are not  suitable  policies  for  solving  the  problems. 
The solution  must  be  sought  in wide-ranging 
agreements  on mutual  cooperation.  In certain  cases, 
however,  efforts  must  be  made  to reduce  the 
Community's  dependence  by diversifying  sources  of 
supply  and  by developing  substitute  products  or 
alternative  forms  of energy. 
As far  as relations  with  developing  countries  are 
concerned,  the  Committee  considers  the  Lome 
convention  a noteworthy  example  of a constructive 
policy. 
2.1.5.  Social  security  for  workers  must  be 
extended  where  necessary.  In this  connection  the 
Committee  would  refer  in particular  to the Opinion-
of the  Committee  on  the  revised  social  action 
programme.  However,  it should  be stressed  that  in 
addition  to  social  security,  the  support  and 
supervision  of the necessary  mobility  of workers  — 
according  to procedures  in each  Member  State  — 
and the  education  and  training  of men  and  women 
are also  very  important.  Moreover,  workers  and 
their  organizations  —  and  in  general  the 
representatives  of all  occupations  —  must  be 
guaranteed  the right  to participate  in the formulation 
and implementation  of the restructuring  policy.  The 
Committee  recalls  in this  connection  its previous 
calls  for  meetings  at Community  level  of joint 
committees  for the most  threatened  sectors. 
2.2. Against  the  background  of these  basically 
regulatory  measures,  the Committee  would  point  to 
the need,  besides  working  for  the  medium-term 
objective  of economic  restructuring,  to tackle  also 
the problems  which  are generally  termed  cyclical,  but 
Which  it is important  to solve  if restructuring  is to be 
successful.  At all events  the Committee  regards  action 
to combat  unemployment  and  inflation  as of crucial 
importance  for  the  success  of the  restructuring 
process,  just  as, conversely,  a healthy  structure  is a 
considerable  help  in  mitigating  inflation  and 
unemployment. 
2.3. Even  under  normal  circumstances  the 
economy  is involved  in a continuous  process  of 
structural  change.  Technical  progress  and  the 
17.11.75 Official  Journal  of the European  Communities No C 263/9 
constant  shifts  in the  demand  pattern  as living 
standards  rise  are obvious  factors.  As we know  from 
past experience,  even  this  gradual  structural  change 
can only  proceed  with  relative  smoothness  in a 
situation  of full  employment.  Since  the  economic 
restructuring  in the  Community  involves  not  only 
the promotion  of certain  parts  of industry  and  the 
economy  but  also  the running  down,  in relative  or 
absolute  terms,  of other  sectors,  the  present  high 
levels  of unemployment  must  be regarded  as a 
serious  obstacle. 
2.4. In  view  of this,  the  Committee  considers  it 
important  in the conduct  of cyclical  and  investment 
policy  to put the emphasis  on investments  which  will 
bring  about  a relatively  quick  reduction  in 
unemployment.  This  applies  particularly  to regional 
policy,  whose  prime  aim  must  be to create  jobs  and 
develop  infrastructures  in the backward  regions.  The 
Committee  would  point  out  that  investment  as part 
of the  economic  restructuring  must  be carried  out 
with  a certain  degree  of continuity,  and  must  not be 
dependent  on  cyclical  fluctuations.  The  steady 
implementation  of such  investment  is essential  to the 
promotion  of productivity  and  to the  creation  and 
permanent  safeguarding  of jobs. 
2.5. It  is obviously  mistaken  to suppose  that 
structural  adjustment  problems  can  be solved  by 
inflation,  and  such  a policy  eventually  leads  to 
further  structural  crises.  Chronic  inflation  has  been 
found  to further  exacerbate  unemployment  and  to 
jeopardize  economic  growth.  Full  employment  and 
price  stability  are  thus  not  mutually  exclusive 
opposites;  they  must  be treated  as aims  of equal 
importance. 
2.6. For  the  sake  of economic  restructuring  too, 
therefore,  it is of paramount  importance  to continue 
the fight  against  inflation  in the  Community  with 
common  objectives  and  harmonized  means  of action. 
Monetary  and  currency  policy  must  be coordinated 
on the  basis  of rules  governing  domestic  money 
creation,  in order  that  the required  mutual  assistance 
in financing  balance-of-payments  deficits  does  not 
lead to undue  expansion  of  international  and 
national  liquidity. 
2.7. In  view  of the radical  changes  in the terms  of 
trade,  the  most  urgent  objective  of economic 
restructuring  is to recreate  a balance  in  the 
Community's  external  trade  and  lessen  the Member 
States'  balance-of-payments  deficits.  This  means  that 
there  will  be two  key  efforts  in the  restructuring process,  which  must  complement  one  another.  The 
first of these  is vigorous  promotion,  by means  of 
concrete  measures  of  energy  and  raw-material 
savings  and,  where  economically  justified, 
development  of substitute  materials  and  alternative 
energy  sources;  the  second  is the  development  of 
certain  sectors  of the  economy  which  can  help  to 
increase  the  Community's  exports.  In doing  this, 
however,  we  must  avoid  excessive  dependence  on 
unforeseeable  economic  developments,  which  cannot 
be ruled  out  at least  until  world  trade  has  been 
placed  on  a  more  stable  footing  through 
international  agreements  and  trade  rules.  Therefore 
the structural  improvement  of activities  geared  to the 
satisfaction  of the  Community's  internal  demand, 
and particularly  small-  and  medium-sized  businesses, 
must  not be neglected. 
2.8. Economical  use  of raw  materials  and  energy, 
which  is necessary  also  in the longer  term,  cannot  be 
achieved  by exhortation  alone.  It must  be promoted 
with  a whole  battery  of instruments,  and  the 
Committee  would  refer  in this  connection  to the 
regulatory  role  of prices.  In specific  terms,  the 
conservation  drive  should  systematically  promote 
investment  projects  and  types  of consumption  (e.g. 
public  transport),  which  save  raw  materials  and 
energy  and  it should  also  lead  to the earliest  possible 
establishment  of common  standards  (for  particular 
products  and  buildings)  which  satisfy  the criterion  of 
economical  raw  material  and  energy  use.  The 
Committee  thinks  it advisable  to draw  up  a 
Community  research  programme  for this purpose. 
2.9. The  Committee  feels  that  the  Community 
must  make  a major  effort  to reduce  its external 
dependence,  especially  in  the  energy  sphere. 
Although  the  situation  on both  the  oil  and  the 
commodity  markets  eased  some  time  ago  and  the 
outlook  as regards  both  volume  of supplies  and 
prices  is today  more  encouraging,  reduction  of 
dependence  must  in the Committee's  view  continue 
to be a basic  objective  of restructuring. 
2.10.  The  Committee  would  point  out,  however, 
that the  expansion  of domestic  oil production  and 
the development  of alternative  sources  of energy  is 
strongly  influenced  by the  oil exporting  countries' 
pricing  policy.  This  makes  it necessary  to afford 
investment  in these  fields  certain  prospects  of 
profitability,  so  as  to  guarantee  investment 
continuity.  A firm  basis  for effective  investment  on 
the required  scale  could  be created  both  by long-
term  agreements  with  the  oil-producing  countries 
and by  price  measures  taken  by  the  consumer 
No C 263/10 Official  Journal  of the European  Communities 17.11.  75 
countries,  and  particularly  the Community. 
2.11.  The  investment  programme  to be drawn  up 
on this  basis,  besides  promoting  conventional  types 
of energy  and  possibly  nuclear  energy  should  also 
cater  for the widest  possible  use  of new  sources  of 
energy.  The  Committee  is strongly  in favour  of 
stepping  up research  into,  for example,  the rational 
use of solar,  wind  and  tidal  energy.  It would  refer 
here to the  Opinion  which  the  Committee  is now 
drawing  up  on  the  Community's  energy  policy 
strategy. 
2.12.  Without  going  into  details,  the  Committee 
would  point  out  that  in  various  Community 
countries  the  expansion  of  nuclear  energy  is 
encountering  growing  opposition  on environmental 
and safety  grounds,  including  the  problem  of 
radioactive  waste  disposal.  The  Committee  regards  it 
as essential  to accommodate  the  objections  with 
stringent,  clear  safety  and  environmental  standards. 
On that  basis  there  should  then  be a comprehensive 
campaign  to educate  the  public  about  the  benefits 
and hazards  of nuclear  energy.  The  Committee  thinks 
the Community  should  assume  an initiating  and 
coordinating  role  in this  area. 
2.13.  Restructuring  to boost  the  Community's 
export  potential  raises,  as the  Committee  is well 
aware,  a number  of intractable  problems.  Firstly,  it 
will probably  be a considerable  time  before  the oil 
deficits  can  be balanced  by exports  of goods  to the 
oil-exporting  countries,  although  the  oil producers 
are making  vigorous  efforts  to absorb  their  greatly 
increased  revenue  through  consumption  and 
investment  at home.  The  need  to find  a solution  in 
the short  term  to the problem  of the acute  balance-
of-payments  deficits  of various  consumer  countries  is 
thus still  very  much  with  us.  Because  of the 
repercussions  on its own  exporting  potential,  and  the 
need  for greater  solidarity  with  respect  to the growth 
of the  world  economy,  the  Community  must  also 
help to find  such  solutions  for  those  developing 
countries  which  are in special  difficulties. 
2.14.  Secondly,  it is important  to avoid  any  one-
sidedness  whereby  the  aimed-for  export  growth  is 
modelled  on the foreign  trade  structure  of particular 
countries  whose  balance-of-payments  position  is still 
comparatively  favourable.  Such  a  one-sided 
expansion  could  rapidly  run  up against  a saturated 
world  market.  The  aim  should  be to promote  and 
develop  those  sectors  which  — given  the  specific conditions  obtaining  in the individual  Member  States 
— can  help  towards  an overall  increase  in the 
Community's  export  potential.  A Community  policy 
for the  financing  and  insurance  of exports  would 
also play  a very  important  role. 
2.15.  In  the Committee's  view  it is extremely  hard 
to say  exactly  which  parts  of industry  and  the 
economy  should  be  particularly  assisted  in the 
economic  restructuring.  The  choice  of these  areas 
depends  primarily  on  our  assessment  of future 
external  demand  and,  of course,  on whether  we 
manage  to  solve  the  problems  of  financing. 
Nevertheless,  the Committee  thinks  it can  pick  out 
some  of the main  lines  of approach. 
2.16.  When  world  economic  relations  are 
reformed  and  stabilized,  as set  out  in the  UN 
resolution  on the  new  world  economic  order  and 
recently  discussed  at the  Conference  on Industrial 
Development  in Lima,  there  will  be even  greater 
external  trade  pressures  on the Community  to effect 
structural  changes.  Structural  policy  in  the 
Community  must  effectively  assist  the  process 
towards  the  progressive  creation  of an industrial 
structure  in the developing  countries.  An attempt  to 
preserve  the status  quo  would  inevitably  impair  the 
Community's  ability  to export. 
2.17.  The  Community's  big  chance  therefore  lies 
where  its specific  strengths  are:  in the  fields  of 
research  and  development,  manufacture  of capital 
goods,  supply  of  technical  know-how.  The 
Committee  consequently  thinks  that  it is on these 
fields  that  the main  emphasis  must  be placed  in the 
measures  to achieve  medium-term  improvements  in 
the Community's  foreign  trade  structure.  Above  all, 
it is vital  to step  up the  development  of technical 
know-how;  this  could  be the  Community's  specific 
contribution  to an international  division  of labour 
benefiting  all concerned. 
3. The  part  to be played  by the  public  authorities 
(Member  States  and  the  Community)  in the 
restructuring  of the economies 
3.1. How,  and  by what  means  can  an economic 
restructuring  of the  required  scale  and  content  be 
achieved?  The  Committee  would  refer  in this 
connection  to its comments  in items  2.1  to 2.1.3, 
where  — with  all due  reservations  on account  of the 
political  nature  of basic  regulatory  decisions  — it 
17.11.  75 Official  Journal  of the European  Communities No C 263/11 
points  out  the  importance  of a viable  market 
mechanism  for  structural  adjustment  and  also 
stresses  the need  for an active  policy  on the part  of 
the public  authorities. 
3.2. The  Committee  is proceeding  here  on the 
assumption  that  the  greater  emphasis  on capital 
expenditure  and  exports  entailed  in restructuring 
need  not lead  to an absolute  decline  in private 
consumption  and  hence  in the general  standard  of 
living.  Rather,  the aim  must  be — on the basis  of 
further  economic  growth  and  continued  efforts  to 
boost  productivity  — to achieve  a pattern  of 
national  expenditure  in keeping  with  the  new 
situation  by appropriate  differentiation  of the rates 
of increase  in consumption  and investment. 
3.3. The  Committee  would  stress  that  the public 
authorities  have  a special  responsibility  in this 
restructuring  process.  This  responsibility  lies  partly 
in the area  of their  own  budgets,  where  a higher 
proportion  of capital  expenditure  must  be achieved 
under  medium-term  financial  planning  and  partly  in 
the area  of financial,  credit  and  monetary  policy, 
where  steps  must  be taken  to meet  the need  for a 
higher  rate  of capital  accumulation. 
3.3.1.  The  Committee  considers  that  the  higher 
rate of capital  accumulation  needed  in order  to 
finance  the  investments  required  for  economic 
restructuring  cannot  be obtained  by the creation  of 
credit  or by achieving  a higher  degree  of self-
financing  by means  of price  increases,  since  this 
would  have  inflationary  consequences.  It advocates 
instead  a differentiated  policy  which  — according  to 
the conditions  in the  Member  States  and  the 
economic  situation  — could  include  encouragement 
of private  saving  and  appropriate  adjustment  of the 
structures  of corporation  tax,  income  tax  and 
indirect  taxes.  It is to be emphasized  here  that 
account  must,  of course,  be taken  of non-economic 
considerations  (equitable  distribution)  by means  of 
tax progression  and  differentiated  indirect  taxes  can 
in particular  cases  and  within  certain  limits  be used 
to further  economic  restructuring  by influencing 
consumption  patterns. encouragement  to desirable  investments,  inter  alia  in 
research.  General  investment  allowances  are  not 
suitable  for this purpose. 
3.4.1.  The  Committee  therefore  considers  that  the 
public  authorities  must  support  the  restructuring 
policy  by  means  of  selective  promotion  of 
investments.  Three  lines  of approach  can  be 
followed: 
— the public  authorities  must  mount  an information 
campaign,  i.e. make  it clear  to investors  what 
overall  investment  pattern  is desirable  in the light 
of the restructuring  requirements; 
— the public  authorities  must  guide  investment  into 
the right  channels,  i.e. gear  special  investment 
promotion  measures  (provision  of funds)  to the 
desired  overall  pattern  and  ensure  the necessary 
supervision; 
— the public  authorities  must  themselves  take  the 
initiative,  i.e. carry  out  their  responsibilities  in 
respect  of  public  investments  for  the 
improvement  of the infrastructure  to the fullest 
extent  and  possibly  .also  take  direct  action  where 
investments  of importance  to the economy  as a 
whole  would  otherwise  not be made  because  they 
are not  sufficiently  profitable  or require  too 
much  capital. 
3.5. The  Commitee's  recommendation  that  the 
public  authorities  play  a greater  role  in guiding  and 
influencing  investment  in particular,  is made  with 
reference,  inter  alia,  to the fact  that  the free  market 
adjustment  process  is impaired  by  progressive 
concentration  of economic  power  and  by cartels, 
agreements,  recommendations  by trade  associations, 
etc. In this connection  mention  must  also  be made  of 
the increasing  importance  of large  concerns,  in 
particular  the  multinationals,  which  have  such 
economic  power  that  they  can in some  cases  pursue 
their own  long-term  corporate  policy  even  when  this 
is contrary  to the economic  aims  of the State.  Thus 
we have  seen  how  a tight  or dear  money  policy  is 
felt primarily  by  the  small-  and  medium-sized 
businesses,  whilst  the big concerns  are largely  able  to 
evade  such  monetary  restrictions. 
3.4. Similar  demands  in respect  of adjustment  to 
economic  restructuring  are to be made  with  regard 
to the expenditure  side  of public  budgets.  It cannot 
be a question  of merely  promoting  investment 
generally  —  on  the  contrary  the  pattern  of 
investment  must  also  be influenced  so as to fix 
certain  main  points  of emphasis  and  give  special 3.5.1.  The  Committee  would,  however,  point  out 
that notwithstanding  this  necessary  observation  the 
free market  adjustment  process  plays  a very 
important  role  in creating  the pattern  of production 
and investment  required  in restructuring.  There 
cannot  and  must  not  therefore  be any  question  of 
advocating  a dirigisme  under  which  private-sector 
No C 263/12 Official  Journal  of the European  Communities 17.11.75 
investment  decisions  would  be  subject  to 
prohibitions  and  injunctions.  Rather,  a maximum  of 
entrepreneurial  flexibility  and  (hence)  willingness  to 
accept  risks  should  be preserved. 
3.5.2.  However,  this  does  not  prevent  an 
investment  policy  geared  to specific  regions  and 
sectors,  i.e. with  a selective  effect,  being  pursued  in 
addition  to overall  regulation. 
3.6. Such  a combination  of market  economy  and 
intervention  does  not in the Committee's  view  affect 
the right  of labour  and  management  to determine 
wages  and  conditions  of employment  independently 
in free  negotiations.  The  Committee  would  stress 
that it considers  this  freedom  of collective  bargaining 
to be essential  both  on principle  and  for  practical 
reasons.  From  the  point  of view  of principle, 
freedom  of collective  bargaining  is implicit  in a 
democratic  pluralist  society;  from  the practical  point 
of view,  it has to be stated  that  interference  with  the 
freedom  of collective  bargaining  does  not  as a rule 
provide  a real  solution  for conflicts.  The  Committee 
would,  however,  point  out  that  it is very  important 
that both  sides  of industry  be continuously  informed 
and consulted  about  the economic  situation  and  the 
economic  objectives,  especially  with  reference  to the 
restructuring  requirements,  since  this  will  tend  to 
increase  the sense  of responsibility  of the  two  sides 
of industry  for the development  of the economy  as a 
whole. 
3.7. The  Committee  would  again  stress  that  two 
conditions  must  be met  if economic  restructuring 
is to be effective  and meet  Community  requirements: 
3.7.1.  Firstly,  the  solution  of world  economic 
problems,  i.e.  problems  which  impinge  on  the 
Community.  The  three  most  important  areas  are: 
— the  world  monetary  system,  where  efforts  must 
not be confined  to the  question  of recycling 
petro-dollars  but must  also  embrace  the problems 
of international  liquidity  (including  equal  access 
for all countries  to international  liquidity),  the 
international  exchange  rate  system  and  the 
internationally  recognized  reserve  medium; 
— world  trade,  where  absolutely  clear  priorities 
must  be established  on  the  dismantlement  of 
(especially  non-tariff)  trade  barriers,  so that  the 
Community's  resource  structure  can  be geared  to 
this; — development  policy,  particularly  cooperation 
with  the  developing  countries  concerning  the 
international  division  of labour. 
The Committee  is of  the  opinion  that  the 
Community  (as  a unit)  must  put  forward 
constructive  proposals  in these  three  areas,  which  of 
course  presupposes  the  formulation  of common 
objectives  in all three  spheres. 
3.7.2.  Secondly,  the solution  of internal  problems 
of direct  concern  to the  Community,  the two  most 
important  being: 
— control  of inflation,  to prevent  the  development 
of a mentality  that  makes  inflation  a self-
reinforcing  process  and  thwarts  all attempts  at 
structural  change; 
— creation  of greater  capital  mobility  in order  to 
prevent  excessively  high  —  and  politically 
unacceptable  — frictional  losses  in the  national 
economies  of the Community. 
3.8. In  the  light  of these  two  conditions  for  the 
success  of restructuring,  it would  seem  essential  that 
the Community  as such  should  work  out  structural 
objectives  transcending  the national  economies.  Any 
country  that  tries  to 'go  it alone'  in solving  the 
structural  problem  in all probability  passes  it on to 
another  Community  country  and  provokes  a 
defensive  reaction,  thus  jeopardizing  achievement  of 
the desired  economic  and  monetary  union.  The 
Committee  therefore  considers  it essential  to: 
3.8.1.  Compile  information  on  the  structural 
interlocking  which  exists  throughout  the 
Community.  This  implies  not  only  trade  relations 
but also  and  principally  interlocking  in production. 
The development  of an input-output  matrix  for the 
entire  Community  is necessary  because  only  with 
such  a matrix  can  the consequences  of restructuring 
in particular  countries  and  industries  be shown. 
3.8.2.  Work  out  an  inventory  of  aims  and 
priorities  embracing  and  binding  on  the  whole 
Community.  This  should  cover  aims  relating  to the 
economic  process  (rates  of growth,  inflation  and 
unemployment)  as well  as structural  aims  (the  ratio 
between  the  growth  of  private  and  public 
consumption,  private  and  public  investment)  and 
17.11.  75 Official  Journal  of the  European  Communities No C 263/13 
social  objectives  (improvement  of social  protection, 
vocational  training,  worker  participation  in 
industrial  decision-making  and  so on). 
3.8.3.  Harmonize  the  regulatory  instruments  used 
throughout  the Community,  particularly  in the fields 
of monetary  and  credit  policy,  taxation  and 
expenditure,  so  as  to  prevent  distortions  of 
competition  within  the Community. 
3.8.4.  Make  definite  progress  with  common  EEC 
policy  in areas  which  are  critical  to restructuring, 
that is to say  primarily  energy  policy,  the promotion 
of research,  sectoral  and  regional  policy,  as well  as 
protection  of the environment. 
3.8.5.  Strengthen  the  instruments  available  to the 
EEC,  so that  it can  take  the  initiative  and  even  out 
the restructuring  process.  In this  connection,  the 
Committee  would  stress  the  importance  of the 
European  Investment  Bank  and  the  Regional  and 
Social  Funds,  whose  functions  and  structures  must 
be geared  to  providing  effective  support  for 
restructuring  where  necessary. 
3.9. The  Committee  appreciates  that  there  are still 
big differences  in the  Community  both  in priorities 
and in the  instruments  of economic  regulation,  and 
that any  attempt  at convergence  must  be made  on a 
long  time-scale  and  with  due  regard  to national 
peculiarities.  Similarly,  the  formulation  of common 
policies  is not running  to schedule.  These  tasks  must 
be tackled  here  and  now.  Zero  growth,  dirigisme  and complete  uniformity  of the  EEC  partners  are  not 
worthwhile  aims.  But  a mutual  coordination  of basic 
economic  and  trading  structures  which  pays  heed  to 
the Community's  economic  and  social  goals  would 
seem  essential  in the long  run. 
3.10.  Finally,  the  Committee  considers  that  the 
next  medium-term  economic  policy  programme 
should,  above  all,  propose  concrete  measures  for 
achieving  the desired  goals.  It would  stress  the need 
for the programme  to coordinate  to a greater  extent 
than  in the past  the various  EEC  policies,  including, 
besides  those  listed  in item  3.8.4  above,  social, 
agricultural,  competition  and  consumer  protection 
policies. 
3.11.  In  conclusion,  the  Committee  emphasizes 
that the Community  and  the Member  States  will  get 
closer  to  resolving  the  problems  involved  in 
economic  restructuring  if they  endeavour  at home 
and abroad  to  avoid  confrontations  between 
interested  States,  interests  and  groups.  This  will 
require  readiness  for all-round  collaboration. 
Done  at Brussels,  28 May  1975. 
The Chairman 
of the  Economic  and  Social  Committee 
Henri  CANONGE 
ANNEX 
to the Opinion  of the Economic  and  Social  Committee 
The following  amendment  was  rejected  during  the discussion: 
Point  1.6.3. 
Add: 
'Furthermore,  the activities  of the  multinationals  should  be supervised  at Community  level 
so as to make  sure  that  they  are in fact  consonant  with  the economic  and  social  objectives 
of the  European  Economic  Community'. 
No G 263/14 Official  Journal  of the  European  Communities 17.11.  75 
Result  of the vote 
For: 40;  against:  44;  abstentions:  11. 
Point  3.5.1. 
Delete. 
Result  of the vote 
For: 28; against:  61; abstentions:  4. 
Opinion  on the updating  of the Social  Action  Programme 
A. LEGAL  BASIS  FOR  THE  OPINION 
In accordance  with  Article  20 (3)  of its Rules  of Procedure,  the  Bureau  of the 
Committee  decided  on 18 December  1974  to draw  up an additional  opinion  on the 
abovementioned  subject. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 130th  plenary  session, 
held in Brussels  on 28 and  29 May  1975. 
The Opinion  is published  below. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the Opinion  of 29 November  1973 
on the  draft  Social  Action  Programme  proposed  by 
the Commission; 
Having  regard  to the  Council  resolution  of 21 
January  1974  on the Social  Action  Programme; 
Having  regard  to Article  20 (3)  of its Rules  of 
Procedure; 
Having  regard  to the decision  taken  by its Bureau  on 
18 December  1974  instructing  the Section  for Social 
Questions  to draw  up an additional  Report  on the 
matter; 
Having  regard  to the  Opinion  adopted  by  the 
Section  for  Social  Questions  at its meeting  on 15 
May  1975  and  the  oral  report  made  by  the 
Rapporteur,  Mr Laval; 
Having  regard  to the discussions  at its meeting  on 29 
May  1975  (130th  plenary  session  of 28 and  29 May 
1975); Whereas  the crisis  situation  in which  the Community 
at present  finds  itself  makes  it imperative  to adapt 
the Social  Action  Programme  to  the  new 
requirements  and  to define  new  priorities; 
Whereas  this  crisis  is liable  to  have  lasting 
repercussions  on  employment,  vocational  training 
and education, 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 70 votes  to 7, and  with  14 abstentions: 
1. General  comments 
Preliminary  remark 
The Economic  and  Social  Committee  is pleased  to 
report  that  its work  on the  updating  of the  Social 
Action  Programme  and  that  on the  restructuring  of 
the economies  were  closely  coordinated  in order  to 
allow  parallel  examination  of the different  aspects  of 
these  two  important  questions.