NoC98/32 OfficialJournaloftheEuropeanCommunities21.4.92
requiredtodemonstratetheirrepresentativeness andthecontractsandtheruleswhichsuchorganizations
mayexercisetheirrighttorequestblanketextensionofmaydrawup.
DoneatBrussels,26February1992.
TheChairman
oftheEconomicandSocialCommittee
MichaelGEUENICH
OpinionontheproposalforaCouncilDecisionadoptingtheAnnualEconomicReport1991/
1992ontheeconomicsituationintheCommunityanddeterminingtheeconomicpolicy
orientationfortheCommunityin1992—AnnualEconomicReport1991/1992
(92/C98/15)
On23December1991theCouncildecidedtoconsulttheEconomicandSocialCommittee,
inaccordancewithCouncilDecision90/141/EECof12March1990ontheattainmentof
progressiveconvergenceofeconomicpoliciesandperformanceduringStageOneofEconomic
andMonetaryUnion(EMU),ontheabovementioned proposal.
Atits293rdPlenarySession(meetingof29January1992)theEconomicandSocialCommittee
adopteditsOpiniononthisreport(doc.ESC92/92).
On26November1991and17DecembertheCommitteeBureaudecidedtodrawupan
AdditionalOpiniononthesubject.
TheSectionforEconomic,FinancialandMonetaryQuestions,whichwasresponsiblefor
preparingtheCommittee'sworkonthesubject,adopteditsOpinionon13February1992.
TheRapporteurwasMrPompen.
Atits294thPlenarySession(meetingof27February1992),theEconomicandSocial
CommitteeadoptedthefollowingAdditionalOpinionbyamajorityvote,with5abstentions .
1.TheCommission'sanalysisandforecasts 1.1.1.Themajorreasonsareasfollows:
1.1.Worldeconomicgrowthhaspracticallyground
toahalt(0,2%).Growthinworldtradehasslumped
from7%in1987to2%in1991.thedeclineineconomicactivityaffecting,inparticu­
lar,anumberofmajorindustrializednations,such
astheUS,theUKandCanada,

NoC98/33 21.4.92 OfficialJournaloftheEuropeanCommunities
—theswitchfromcommandtomarketeconomiesin
CentralandEasternEurope,resultinginatleasta
temporaryfallinproduction,
—theuncertaintyproducedbytheGulfWarand
theconsequentreticenceofbothconsumersand
investors .
1.1.2.Theworldeconomyisexpectedtorecover
somewhatin1992wheneconomicgrowthshouldreach
2%.—inparticular,wagemoderationinthe80shada
positiveimpactonfirms'profitability ,butfaltered
beforeprofitabilityandemploymenthadrecovered
their60slevel,
—notenoughmeasureshadbeenintroducedtopro­
moteflexibilityasameansofeasinglabourshort­
agesinanumberofsectors,
—theopportunities providedbyeconomicgrowth,
especiallyafter1986,foreffectivelytackling
nationalbudgetarydeficitsandweakbalanceof
paymentssituationshadnotbeenfullyexploited.
1.5.TheCommissionseesnewprospectsopeningup
inthemedium-term .Atpresentitisexpectingeconomic
growthtoreach2,5%in1993.Butifthisandeven
strongerratesofgrowtharetobeachieved,anumber
ofconditionshavetobemet.
1.5.1.TheCommissionhighlights,interalia,thefol­
lowingpoints:
—policiesgearedtotheestablishmentoftheinternal
marketandtheattainmentofeconomicandmonet­
aryunionandsocialandeconomiccohesionmust
bevigorouslypursued.Therecentdecisiontoestab­
lisha'EuropeanEconomicArea'addsafurther
dimensiontotheabovementioned policy,
—measuresmustbetakentopromoteflexibilityin
theeconomy,inparticulartheabilityofworkers
andemployerstoadapttostructuralchanges.Par­
ticularattentionmustbepaidinthisrespecttothe
potentialroleoftrainingandwagedetermination
inpromotingflexibility,
—theshortfallinsavingsisaproblemwhichneedsto
beaddressed.Currentlevelsofinterestonthecapi­
talmarketsarealreadyveryhighbecauseofthe
inadequatesupplyofcapitalandanincreasing
demandforinvestmentcapitalisexpectedfromthe
countriesofCentralandEasternEurope.Particular
attentionneedstobepaidinthisrespecttocapital
neededforfinancingnationalbudgetarydeficitsand
toencouragingsaving,
—withthereducedscopeforMemberStatesto
implementtheirowneconomicandmonetarypoli­
cies,itismorenecessarythanevertofocusattention
oncooperationbetweentheMemberStatesand
onimprovingsupply-sidefactorssuchassound
infrastructure ,lessrigidlabourmarkets,andtax­
ationsystemsofbenefittoenterprisesinmarket
sectors,
—thesuccessoftheUruguayRound.Thiswillmake
marketsmoreaccessibleandprovidenewoutlets
forproductswhicharealsoofconsiderablesignifi­
cancetotheEC,suchasservicesandintellectual
property.Suchopportunitiesarealsoofparticular
importanceforsupportingthestrategybeingpur­
suedbythecountriesofCentralandEasternEurope
astheygearthemselvestonewmarkets.1.2.TheEChasalsoclearlysufferedfromthedown­
turnineconomicgrowth.Ithas,however,withstood
thissituationbetterthanotherregionsintheworld,
andisexpectedtoachieveeconomicgrowthof1,25%
in1991.
1.2.1.Theexplanationforthisrelativelybettersitu­
ationliesinthefundamentalimprovementintheCom­
munity'seconomicstructurewhichtookplaceinthe
1980s.Therehasbeenstronggrowthsince1984;invest­
mentin1990wasabout50%higherthanin1984.The
stimulusprovidedbyGermanunificationhasalsohad
apositiveeffect.
1.2.2.A2,25%growthrateisexpectedin1992.
1.3.TheCommission'smainfactualobservations in
connectionwithitsanalysisoftheeconomicsituation
areasfollows :
—thelevelofunemployment hasincreasedandisset
torisestillfurther,reversingthedownwardtrend
since1986,
—thescopeforoperatinganindependentstructural
adjustmentpolicyisdecreasing;itwill,forexample,
bemoredifficulttoputgovernmentfinancesona
soundfootingwherethisisnecessary,
—thosecountrieswhosestandardoflivingstillclearly
fallsbelowtheECaveragewillhavelessscopefor
bridgingthegap,
—theconvergenceofsocialandeconomicpolicies,
whichisnecessaryfortheattainmentofeconomic
andmonetaryunion,isshowingsignsofflagging,
—socialresistancetonecessaryadjustmentsmay
increaseiftheresultscannotbeseenintheshort­
termandifthereisnofaithinthemeasuresinthe
longerterm.
1.4.ThemainconclusionswhichtheCommission
drawsfromthesedevelopmentsareasfollows:
—althoughthestructuraladjustmentsofthe1980s
wereapositivestepforwardinthemselves,they
werenotadequatelyimplementedandnotcarried
throughtoasuccessfulconclusion,

OfficialJournaloftheEuropeanCommunities21.4.92 NoC98/34
1.5.2.Table1setsoutthekeyindicators :
Table1:KeyInternationalIndicators1989-1993
1989 1990 1991f1)1992(>)1993(x)
GDP(volumechanges)
USA 2,8 0,9 0,4 2 2,25
Japan 4,9 5,6 4,6 3,5 3,5
EC 3,3 2,8 1,32,25 2,5
Domesticdemand(%changes)
USA 2,2 0,5"1,0 2 2
Japan 5,7 5,8 3,43,75 3,75
EC 3,7 2,9 1,12,25 2,5
Inflation
(%changesinhouseholdconsumption )
USA 4,5 5,0 4,44,75 5
Japan 1,72,4 2,82,5 2,5
EC 4,9 5,2 5,04,5 4,25
Unemployment (%level)
USA 5,3 5,5 6,7 7 6,75
Japan 2,3 2,1 2,2 2,25 2,25
EC 8,9 8,4 8,6 9 9,25
Governmentbudgetbalance(%level)
USA -1,7-2,4-2,3-2-1,5
Japan 2,5 2,2 1,8 2 2
EC -2,9-4,1-4,4-4,5-4,25
Balanceofcurrenttransactions I
(%level)
USA -1,9-1,6-0,1-0,75-0,75
Japan 2,1 1,2 1,5 1,5 1,75
EC -0,1-0,2-0,8-1-0,75
Long-terminterestrate(%level)
USA 8,5 8,6 8,2
Japan 5,2 7,5 6,8
EC 9,911,1 10,4
\
Source:ECCommission .
(MForecasts .
2.Compliancewithsocio-economic objectives
2.1.TheCommitteestressesthattheCommission's
forecastsaretoooptimistic.Economicrecoveryinthe
Communityisslowerthananticipated,theeconomic
situationintheUSisfallingshortofexpectations ,
world-tradeliberalization isstilluncertain,stabilityhas
notyetbeenachievedintheCISandmajorriskspersist
inthefinancialsphere.
2.1.1.InitsOpinionof26September1991(J)the
Committeesetoutanumberofkeyobjectiveswhich
couldserveasareferenceframeworkfortheconver­
genceofsocialandeconomicpolicy.
2.1.2.Theseobjectivesincluded:
—sustainedandbalancedeconomicgrowth,
—fullemployment ,—pricestability,
—balanceofpaymentsequilibrium,
—economicandsocialcohesion.
2.1.3.InthefollowingparagraphstheCommittee
willexaminethefindingsoftheCommissionreportin
thelightoftheseobjectives.Itwillconcentrateon
Communitytrends;trendsinindividualMemberStates
areconsideredinconnectionwiththenationalreports,
forwhichtheCommitteehasdevisedaspecialpro­
cedure.AspartofthisproceduretheCommitteeholds
anexchangeofviewswithrepresentatives ofthesocial
interestgroupsinthecountryonwhichtheCommission
hasissuedareport.Theresultsofthisexchangeofviews
areforwardedtotheCommission andtheCouncil.
2.2.Sustained ,andbalancedeconomicgrowth
(])OJNoC339,31.12.1991,p.64.2.2.1.Viewedoverthelongerterm,therateofecon­
omicgrowthhasbeenfalling.Averagegrowthinthe

NoC98/35 21.4.92 OfficialJournaloftheEuropeanCommunities
unacceptablyhighlevelofunemployment .Unemploy­
mentintheTwelveaveraged2,3%intheperiod
1964-1970,4,1%intheperiod1971-1980and9,6%in
theperiod1981-1990.Unemployment begantofallin
1986,butthistrendwasreversedin1991andafurther
riseisforecastfor1992.A±0,7%riseinunemploy­
mentintheCommunity,includingthefivenewGerman
Lander,isforecastfor1991,1992and1993.Inviewof
thescaleandseriousnessofthisproblem,theCom­
mitteecallsforamorethoroughanalysisofunemploy­
mentandforattentiontobepaidtootherfactors
besidestheoperationofthelabourmarket.TheCom­
mittee'sviewisthatunemployment shouldbenohigher
thanthefrictionalunemployment whichisaninevitable
consequenceofthecontinualswitchtonewproducts
andmarkets.present12MemberStateswas4,8%overtheperiod
1961-1970,3,0%overtheperiod1971-1980and2,3%
overtheperiod1981-1990.Itwasevenweakerin1991
(1,3%).Somerecovery(2to2,5%)isexpectedin1992/
1993.ThetrendintheUSandJapanhasbeensimilar.
2.2.2.TheCommitteesupportstheCommission's
objectiveofincreasinggrowth.Highergrowthisneeded
toboostemploymentandcreatescopefor,interalia:
—moreinvestment,includingresearchanddevelop­
ment(R&D),
—infrastructure improvements ,
—preservinganenvironmentfittolivein,
—payingforsocialsecurityinanageingsociety,
—financingaidtothirdcountries.
2.2.3.TheCommission'srecipeforattainingsuch
growthincludespushingaheadwiththemajorpro­
grammes,i.e.theinternalmarketandEMU,astructural
adjustmentpolicy,astrictcompetitionpolicyandthe
strengtheningofinternationaltrade.TheCommittee
endorsesthesemainlinesofaction.Inthisconnection
theCommitteewouldonceagaindrawattentiontoits
OpinionsonIndustrialPolicyinanOpenandCompeti­
tiveEnvironment (!)andtheTwentiethReportonCom­
petitionPolicy(2).
2.2.3.1.TheCommission'sreportnumbersenviron­
mentalprotectionamongtheprioritiesofeconomic
policy.InthisconnectiontheCommissionmentions
thestrategyofintroducingaC02/energytax.The
Committeecallsforabroadstrategydesignedtobring
aboutthestructuraladjustmentofproductionandcon­
sumptionneededtoprotecttheenvironment ;thisstrat­
egyshouldhaveastrongunderpinningandbearrived
atafterconsultationswithrepresentatives ofthesocial
groups.TheproposedC02/energytaxcouldformpart
ofsuchastrategy.
2.2.4.Tomakesustainedandbalancedeconomic
growththroughouttheCommunitycompatiblewith
theotherobjectiveslistedinpoint2.1.2above,the
Committeeconsidersthataplanshouldbedrawnup
forcoordinatingnationaleconomicpolicies;foreach
oftheseobjectivestheprincipleshouldbetoguarantee
thatthosecountriesfurthestfromtheCommunityaver­
agearebroughtintoline.TheCommissionshouldgive
thisprinciplepriorityinitsrecommendations .2.3.1.1.Increasedeconomicgrowthisasinequanon
forhigheremployment,asstatedinpoint2.2.Forthis,
increasedinvestmentinthepublicandmarketsectors
isneeded;labourmarketandcompetitionpolicyshould
alsobeimproved.Foremploymentprospectsinthe
longerterm,itisveryimportantthatanyriseinwage
costsbematchedbyimprovements inproductivity .A
deteriorationinprofitabilityshouldbeavoided,bearing
inmindthatanimprovement ininvestmentlevelsis
desirable.Expandinginvestmentandreinforcingthe
Community'scompetitiveness comparedwiththatof
otherindustrializedthirdcountriescouldgiveamuch­
neededboosttoemployment .Ithastobesaidthatthe
currenthighlevelofinterestratesactsasabrakeon
investmentatatimeofrecession.Thisthreatensto
delayeconomicrecovery.Fromthisperspectivea
reductionininterestratesisdesirable.
2.3.2.InitsreporttheCommissionfocusesattention
ontheshortcomingsofthelabourmarket.Itpointsout
thatinsomesectorsvacanciesaredifficulttofilldespite
thelargenumbersofunemployed,particularlyamong
theunskilled.TheCommissioncallsforanimprove­
mentinvocationaltrainingandanadjustmentofwage
costswhereinappropriateskillsand/orexcessivewage
costsinrelationtoproductivityarekeepingalarge
numberofpeopleoutofwork.Inthisconnectionthe
Commission advisestheMemberStatestomaketheir
policyobjectivesmorevisiblesothatmacro-economic
prospectscanbebettertakenintoconsideration inwage
negotiations .
2.3.Fullemployment
2.3.1.IntheCommittee'sviewthegreatestweakness
intheeconomicsituationintheCommunityisthe2.3.2.1.TheCommitteetakesthistomeanthatthe
Commissionrecommendsthedevelopmentofreference
frameworkswhich—withdueregardfortheCom­
munityconvergencepolicyasagreedbythemember
States—highlightthenationalmacro-economic oppor­
tunities.TheCommitteethinksthatsuchreference(1)OJNoC40,17.2.1992,p.31.
(2)OJNoC49,24.2.1992,p.9.

21.4.92 NoC98/36 OfficialJournaloftheEuropeanCommunities
frameworksareagoodideaandcallsforappropriate
actionatMemberStatelevel.policyacceptedbythe(overwhelming majorityof)
MemberStatesintheSocialCharterforworkers,
intheTreatyofFebruary1992andintheagreement
ontheinterpretation oftheSocialCharteris
implemented .
2.4.Pricestability
2.4.1.Inflation,whichhadbeenrisingslightlyinthe
Communitysince1987,seemstohavestartedfalling
againin1991.Anappropriatemonetarypolicyineach
countryis,however,stillnecessarytobringinflation
undercontrolandfurtherreduceit.TheCommittee
recognizesthatmonetarypolicycreatestensionswithin
andbetweenMemberStates.InGermany,monetary
policyactsasaconstraintduringatimeofmajor
economicchangeforthisMemberStateandasa
responsetorisinginflation(2,6%in1990and4,25%
in1992),amountinggovernmentdeficit(—1,9%in
1990,—3,2%in1991)andadeterioratingbalanceof
payments (3,2%in1990,1,4%in1991).Itmustbe
pointedoutthatthisrestrictivepolicy,which—through
theEuropeanMonetarySystem(EMS)—influences
trendsinotherMemberStates,actsasabrakeon
renewedgrowthintheCommunity .Thereforeitisvery
importanttocreateopportunities forareductionin
interestrates,includingthroughincreasedsavings(see
4.1),andtoexploitthemtothefull.
2.4.1.1.TheCommitteehasnodesiretousurpthe
responsibilities ofthemonetaryauthorities .Inthelight
oftheEMUanditscriteriaforaccession,theCommittee
isawareoftheimportanceofsuchamonetarypolicy
andwoulddrawattentiontothosefactorswhichhelp
todeterminemonetaryconditions,inparticularpro­
ductioncostincreases,taxrises,etc.(seealso3.2.1and
4.1.1).2.3.3.TheCommitteewouldmakethefollowing
observationsonsuchanapproach :
a)TheCommitteestressesthatitistheresponsibility
ofemployers'andworkers'organizationstofreely
negotiatecollectivewageagreements .
b)TheCommitteerecognizesthatunitlabourcosts
willbecomeincreasinglyimportantindetermining
relativecostsbetweenMemberStatesoncethe
exchangerateinstrumentdisappearswiththecre­
ationofEMU.
c)TheCommitteenotestheimportanceofareduction
intaxesandsocialsecuritycontributionsleviedon
earnedincome.
TheCommitteewouldpointoutthatfurtheroppor­
tunitiesforsuchreductionsmustexist,asaverage
publicexpenditureintheCommunityisalittleover
48%oftheGrossDomesticProduct(GDP).The
Committeeisthinkinginparticularofthepossibility
—withdueregardfortheprovisionsoftheTreaty
—ofreducingStatesubsidiestofirmsinanumber
ofcountrieswherethiscanbejustified,takinginto
accountparticularcircumstancesandsocialinter­
ests.Expressedasapercentageofgovernment
spending,suchsubsidiesvaryfrom±2%to±7%
intheMemberStates.
d)InthereporttheCommissionannouncesaCom­
munitystrategytointroduceaCO^/energytax.If,
afterconsultationswithindustry,thisisshownto
bejustifiableandfeasible,theproceedsfromsuch
ataxcouldbeusedtoreducetaxesonlabouras
advocatedinparagraphc).Thiswouldmakethe
priceoflabourmoreattractiveincomparisonwith
otherfactorsofproduction.
e)TheCommitteesharestheCommission'sviewthat
inaconstantlychangingmarketfurthertraining
andretrainingareanessentialmeansofkeeping
peopleinemployment .Firmsshouldallocatepart
oftheirfinancialresourcestosuchtrainingand
retraining.
f)TheCommitteewouldstressthatbothCommunity
andnationalauthoritiesshouldevolveapolicy
aimedatpromotingemploymentbysupporting
R&D,improvinginfrastructure andupgrading
training.
g)TheCommitteestressesthegreatimportancewhich
itattachestothefurtherdevelopmentofthesocial
dimensionintheCommunity .Apolicyofgrowth,
asproposedbytheCommissionandenlargedupon
bytheCommittee,isonlyattainableifthesocial2.5.Balanceofpaymentsequilibrium
2.5.1.Exportstonon-Community countries
amountedtoapproximately 8,5%ofECGross
NationalProduct(GNP)in1990.Importsfromnon­
Communitycountrieswerearound9,5%ofGNP.
Apartfromsomeslightfluctuationsthispercentagehas
remainedbroadlyunchangedsince1958.
2.5.2.Inthe1980simportsfromnon-Community
countriesgrewmorestronglyinvolumepercentage
termsthanintra-ECimports.Itwouldthereforebe
scarcelyaccuratetospeakofa'FortressEurope'.On
theotherhand,exportstonon-Community countries
havelaggedbehindintra-ECexportsinvolumepercent­
ageterms.Thistrendcouldpointtoaweakeningcom­
petitivepositiononthepartoftheEC.Thishypothesis
isconfirmedbythedeteriorationofthebalanceof
paymentsoncurrentaccountfrom+1,4%in1986
to—1%in1992.TheCommitteeagreeswiththe
CommissionthattheCommunitymustcontinuetopay
closeattentiontoitsabilitytocompetewiththemajor
industrialized thirdcountries .

21.4.92 OfficialJournaloftheEuropeanCommunitiesNoC98/37
2.6.Economicandsocialcohesion 3.CompliancewithEMUcriteria
2.6.1.InitsOpinionof26September1991theCom­
mitteedefinedeconomicandsocialcohesionas:3.1.TheCommitteewouldurgetheCommission
andtheCouncilperiodicallytochart,onthebasis
ofexperienceorreliableforecasts,whatimpactthe
applicationoftheEMUcriteriaarehavingonthesocio­
economicobjectiveslistedin2.3.
3.1.1.TheEuropeanCounciladopted,inadraft
protocolattachedtoArticle109JoftheTreatyof
February1992,anumberofeligibilitycriteriaforpar­
ticipationinEMU.—narrowingthegapbetweenregions,
—integrationofthesocialdimension (see2.3.3),
—developmentofthesocialdialogue.
2.6.2.Narrowingthegapbetweenregions
2.6.2.1.AccordingtoArticle130AoftheTreaty,
oneoftheCommunity'saimsistoreducedisparities
betweentheregions.TheAnnualReportprovidesno
figuresontrendsintheseparateregionsoftheCom­
munity,onlyintheMemberStates.TheCommitteeis
issuinganOwn-initiative Opiniononeconomicand
socialcohesion(doc.ESC226/92of27February1992).3.2.Aninflationratenomorethan1,5%abovethe
averageofthethreemoststablecountries
3.2.1.Fivecountriesweremorethan1,5%above
theunweightedaverage(2,8%forthethreemoststable
countriesin1991—DK,F,IRL).Althoughtherehas
beensomeconvergenceandreductioninrecentyears,
thegaphastobefurthernarrowedandthegeneral
levelofinflationfurtherreduced.TheCommittee is
optimisticabouteventualcompliancewiththiscri­
terion.Thecountrieswhicharestillwellabovethe
averagewill,however,havetomakeconsiderable
additionalefforts.TheCommissionregardsanaverage
inflationrateof2-3%asdesirable,andtheCommittee
endorsesthis.TheCommitteepointsoutthatsince
1960apercentageofthisorderhasbeenachievedin
twoyearsonly(1961:2,8%and1967:2,9%).
3.3.Abudgetdeficitofnomorethan3%andgovern­
mentdebtnomorethan60%ofGDP2.6.2.2.Weareconcernedherewithregionssituated
inMemberStates(Greece,Ireland,PortugalandSpain)
whosepercapitalGNPislowerthantheCommunity
average.WiththeexceptionofGreece,annualGNP
growthinthesecountrieswashigherthanthatofthe
Communityasawhole(2,8%).Thusovertheperiod
1986-1991Spainaveraged4,25%annualgrowth,Portu­
gal4,1%,Ireland3,5%,butGreeceonly1,3%.Per
capitaGNP,asmeasuredagainsttheCommunityaver­
age(100),hasrisentoabout80%inthecaseofSpain,
70%forIrelandand56%forPortugal.Greece'srela­
tiveprosperityhasdeclinedslightly,however,to
52,5%.
2.6.3.TheEuropeanCouncilrecentlydecided,whilst
retainingthestructuralfunds,tosetupacohesion
fundtoconcentrateontheco-financingoftransport
infrastructure andenvironmental projectsinthose
countrieswhichhaveapercapitaGNPoflessthan
90%oftheCommunityaverageandhaveaprogramme
designedtoachievecompliancewiththeeconomiccon­
vergenceconditionssetoutinArticle104Cofthe
Treaty.3.3.1.In1991eightcountrieshadadeficitofmore
than3%.Intheperiod1981-1990therewasoneyear
inwhichanaveragedeficitof3%orlesswasachieved.
In1961-1970and1971-1980anaveragedeficitof3%
orlesswasattainablebythethenCommunityofNine.
3.3.1.1.TheCommitteeconsidersthatinprinciple
allMemberStatesshouldbeabletocomply,bytheend
ofthe90s,withtherequirementofmaximum3%
deficit.
3.3.2.In1991thereweresevencountrieswhichfailed
tomeetthecriterionofagovernmentdebtofnomore
than60%ofGDP,fourofthembyawidemargin.It
wouldnotseempossibleforthesecountriestocomply
withthisreferencevalueeveninthemediumtolong
term.
3.3.2.1.AccordingtotheprovisionsoftheTreaty
(Art.104B),thequestionofwhetherthisreference
valuehasbeenexceededbyanexcessiveamountis
assessedonthebasisofspecificcriteria,withparticular
attentiontowhetherthegovernmentdebtratioisdim­
inishingandhowquickly.TheCommitteeacknowl­2.6.4.TheCommitteeagreeswiththeCommission
thatthebestwayofbridgingthegulfbetweenthese
fourandtheotherMemberStatesisforthecountries
themselvestopursuehealthymacroeconomic policies
withaviewtoimprovingtheirinternalgrowthpoten­
tial.SupportshouldalsobeprovidedatCommunity
level,throughthestructuralandcohesionfunds.

21.4.92 NoC98/38 OfficialJournaloftheEuropeanCommunities
edgesthecorrectnessofthisapproachinthatitdoes
justicetotheparticularsituationinwicheachMember
Statemayfinditself;themostimportantthingisthat
thegovernmentdebtratioofthosecountrieswhich
wishtoenterthethirdstageofEMUmovesufficiently
rapidlytowardsthe60%.tradingbloc—amajorresponsibilityforthesuccessof
theUruguayRound.Disagreement ononeormore
pointsmustnotbeallowedtostandinthewayof
furthertradeliberalization .InthisconnectiontheCom­
mitteewouldalsopointoutthateasiermarketaccess
couldhelptoreinforcetheadaptabilityandefficiency
oftheCommunityeconomiesandviceversa.Seenin
thislightsome'concessions'areinfactblessingsin
disguise.Normustthosecountriesinthethroesof
transitionfromacommandtoamarketeconomybe
facedwithallsortsofbarrierstotheiraccesstoother
markets,includingtheEC.3.4.Nationalcurrencytohaveparticipatedinthenar­
rowbandoftheEMSfortwoyearswithout
devaluation
3.4.1.Since1987therehavebeennorealignmentsof
notewithinthenarrowbandoftheEMS.Thisprovides
groundsforoptimism.Twocountries(GreeceandPor­
tugal)stilldonotparticipateintheEMSexchange
ratemechanism,whileanothertwocountries(UKand
Spain)participate,butinabroaderband.4.2.2.AsuccessfulconclusiontotheUruguayRound
isalsoimportantifnewrulesandagreementsofthe
GeneralAgreementonTariffsandTrade(GATT)are
tobedrawnupwithaviewtoachievinglastinggrowth.
ItistobehopedthattheforthcomingUNConference
onEnvironmentandDevelopment (UNCED1992)will
provideanewimpetusforstrengtheninginternational
environmental policy.Anenvironmentally friendly
adjustmentoftheGATTrulesisimportantinatleast
tworespects.Firstly,fortheincorporationofenviron­
mentalcostsinthepriceoftheproduct.Theideal
situationwouldnot,however,befortheextracosts
arisingfromenvironmental measurestobeequallyhigh
inallcountries,butforuniforminternationalenviron­
mentalqualityobjectivestobeusedand,onthebasis
ofthis,forthesocialcoststobepassedonfullyinthe
costandpricestructureineachcountry.Inthisway
thestructuralelement'environment'worksthrough
intothepatternofacountry'scomparativeadvantages
anddisadvantages .3.5.Long-terminterestratesnomorethan2%higher
thantheaverageofthethreemoststablecountries
3.5.1.Fourcontriesweremorethan2%aboutthe
unweightedaverage(8,6%)ofthethreemoststable
countriesin1991(D,L,NL).
4.Specificquestions
4.2.3.Anotherimportantaspectoftheinternational
trade/environmentrelationshipistheimpositionof
environmental requirementswhengoodsareimported.
InthecontextofGATTitisverryimportanttocover
suchapossibilityandtopreventitsabuse(protec­
tionism).4.1.Savingsandbudgetarypolicy
4.1.1.Forequilibriuminthebalanceofpaymentson
currentaccount,savingsintheECshouldbeonapar
withinvestment .Bearinginmindtheneedforthe
exportofcapital(includingtransferpayments)from
theECtodevelopingcountriesandCentralandEastern
Europe,astructuralbalanceofpaymentssurplusand
henceasavingssurplusisinfactdesirable.Seeninthis
light,theturnaroundinthecurrentaccountbalance
from0,7%in1983-1987to-0,8%in1991and-1%
in1992isamatterforconcern.Thetwinobjectivesof
restoredbalanceofpaymentsequilibriumandhigher
investmentratiocanonlybeachievedthroughasub­
stantialincreaseinsavingsintheCommunity .Thisis
alsotheonlywayofbringingdownrealinterestrates
permanently .TheCommitteeagreeswiththeCom­
missionthatthesinglemostimportantcontribution
toincreasednationalsavingwouldbeasignificant
reductioninpublicdeficitsinmostcountries.TheCom­
mitteewouldalsodrawattentiontotheneedtoencour­
agesavingsbyhouseholdsand,inviewofthedemo­
graphictrends(ageingpopulation/decliningbirthrate),
toputpensionfundingonasoundfooting.5.Conclusionsandrecommendations
5.1.Conclusions
5.1.1.Ofthesocio-economic objectives,thedesired
growthrateisnotbeingachieved,theriseinpricesis
toohigh,unemployment remainsunacceptablyhigh,
thecompetitivepositionremainsacauseforconcern
andthecohesionobjectivehasnotbeenachieved.Not
enoughhasbeendonetomapoutacomprehensive
environmentpolicy.4.2.International tradeandtheenvironment
4.2.1.TheeconomicdevelopmentoftheECisheavi­
lydependentonworldeconomictrends.TheEChas
anespeciallylargestakeinand—astheworld'slargest5.1.2.OftheEMUcriteria,anumberofMember
Stateswillhavetoworkontheirbudgetdeficits,govern­
mentdebtandlong-terminterestrates.

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/39
5.2.Recommendations
5.2.1.CooperationbetweentheMemberStatesisa
preconditionformaintainingtheCommunityecon­
omy'sstrengthsandremedyingitsshortcomings .Whilst
monetarypolicywillinfuturebedeterminedatCom­
munitylevel,theMemberStateswillretaincontrol
ofsocio-economic policy.Astrategywillhoweverbe
developedatCommunitylevelfortheconvergenceof
socio-economic policy,culminatinginaCouncilrec­
ommendationsettingoutthebroadguidelinesofthe
economicpoliciesoftheMemberStates.
5.2.2.TheCommitteemaintainsthattheMember
Statesshouldcontinuetobegivenasmuchresponsi­
bilityaspossibleforsocio-economic policyintheirown
countries,butalsointheCommunity .ByMember
StatestheCommitteeheremeansnotonlygovernments
butalsothevarioussocialinterestgroups.
5.2.3.Apolicyofsystematiccoordinationandcoop­
eration,basedoncommonmedium-termobjectives,is
partandparcelofthisapproach.InitsOpinion(!)of
25September1991theCommitteeformulatedanumber
ofgeneralobjectivesasareferenceframeworkfora
convergencestrategy,andindicatedhowitintendedto
contributetothecovergenceprocessinthefollow-up
tothenationalreports.InitsOpiniononEMU(2)of27February1991theCommitteearguedthatitshould
beconsultedontheperiodicmultiannualeconomic
policyguidelines.
5.2.4.TheCommitteeverymuchregretsthatthe
TreatyofFebruary1992makesnomentionwhatsoever
oftheinvolvementoftheCommitteeinformulating
theeconomicpolicyguidelineswithintheframework
ofEMU.Ontheotherhand,theCommitteeistobe
consultedonindustrialpolicyingeneral[Art.130(3)].
Tobeabletogiveaproperopinion,however,itneeds
tobeconsultedoneconomicpolicytoo.TheCommittee
thereforereiteratesitscallfor:
—(non-mandatory )consultationoftheCommitteeby
theCommissiononthedraftforthebroadguide­
linesofeconomicpoliciesasreferredtoin
Article103(2),firstparagraph.If,despitethis
request,theCommissiondoesnotwishtoconsult
theCommittee,thelatterwouldliketoreceivethe
draftguidelineswellbeforetheirsubmissiontothe
Councilsothatitcanputforwarditsviewsonits
owninitiative,
—submissiontotheCommitteeoftherulesfor'multi­
lateralsurveillance'tobedrawnupbytheCom­
mission[Art.103(5)],
—recognitionbytheCouncilofthesocialandecon­
omicobjectivesdescribedinitsOpinionof
25September1991(*),
—theCounciltotakeapositionontheprocedure
followedbytheCommitteeinconnectionwiththe
nationalreports.(»)OJNoC339,31.12.1991,p.64.
(2)OJNoC102,18.4.1991,p.34.
DoneatBrussels,27February1992.
TheChairman
oftheEconomicandSocialCommittee
MichaelGEUENICH