No C 339/64 Official Journal of the European Communities 31. 12. 91 
November 1990: European Parliament adopts package of measures covering integration of the five new 
Federal Lander into the Community. 
December 1990: EC Council approves the Community measures. 
December 1990: Rome European Council approves food aid worth ECU 750 million to USSR. Aid to other 
Central and Eastern European countries increased. 
December 1990: EC Council authorizes the Commission to initiate association negotiations with Poland, 
Hungary and Czechoslovakia. The negotiations begin in February 1991. 
January 1991: Commission announces that Romania now qualifies for aid under the Group of 24 support 
programme for reformist Eastern European states. 
March 1991: Commission adopts the joint support plan for the new Federal Lander, which will receive 
Community aid totalling DM 6 000 million in the 1991-1993 period. 
June 1991: Council for Mutual Economic Aid (Comecon) disbanded. 
August 1991: Failed putsch in the Soviet Union followed by an acceleration in the process of transforming 
the USSR into a Federation of Democratic States. 
Opinion on the economic situation in the Community in mid-1991 
(91/C 339/13) 
On 26 February 1991 the Economic and Social Committee, acting under the fourth paragraph 
of Article 20 of its Rules of Procedure, decided to draw up an Opinion on the economic 
situation in the Community in mid-1991. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its Opinion on 10 September 1991. 
The Rapporteur was Mr B.N.J. Pompen. 
At its 289th plenary session (meeting of 26 September 1991), the Economic and Social 
Committee adopted the following Opinion by a majority vote in favour and six votes against, 
with 15 abstentions. 
1. Introduction 
1.1. General trends 
Using a number of indicators, this section provides an 
account of economic developments over the six-year 
period from 1989 to 1994 (see Table 1) (2). The projec-
(*) Because of serious statistical problems the economic data for 
the EC and Germany do not include the former GDR. tions for 1991 and 1992 are the European Commission's, 
while figures from the Netherlands Central Economic 
Planning Office (Nederlands Centraal Planbureau) have 
been taken for 1993/1994 in order to broaden the basis 
of the policy assessment. Naturally, these projections 
are fraught with major uncertainties, some of which 
are discussed in 1.4. 
31. 12.91 Official Journal of the European Communities No C 339/65 
Table 1: Key International Indicators 1989-1994 
GDP (volume changes) 
USA 
Japan 
EC 
Domestic demand 
(% changes) 
USA 
Japan 
EC 
Inflation 
(GDP % changes) 
USA 
Japan 
EC 
Unemployment 
(% level) 
USA 
Japan 
EC 
Government budget balance (d) 
(% level) 
USA 
Japan 
EC 
Balance of current transactions 
(% level) 
USA 
Japan 
EC 
Long-term interest rate 
(% level) 
USA 
Japan 
FRG 1989 
2,8 
4,9 
3,3 
2,2 
5,7 
3,7 
3,8 
1,5 
5,1 
5,3 
2,3 
8,9 
-1,7 
1,8 
-3,0 
-1,9 
2,1 
-0,1 
8,5 
5,1 
7,0 1990 
1,0 
5,6 
2,7 
0,5 
5,8 
2,8 
4,1 
1,9 
5,6 
5,4 
2,1 
8,2 
-2,4 
2,2 
-4,1 
-1,8 
1,2 
-0,2 
8,5 
7,4 
8,8 1991 
(a) 
0,3 
4,2 
2,2 
-0,1 
4,2 
2,3 
5,5 
2,1 
5,5 
6,1 
2,2 
8,8 
-2,3 
2,5 
-4,1 
-1,8 
1,6 
-0,8 
— 1991 
(b) 
0,1 
3,8 
1,4 
-0,5 
4,1 
1,4 
4,0 
2,3 
5,5 
6,6 
2,2 
8,7 
-1,8 
1,7 
-4,6 
-0,3 
0,9 
-0,6 
7,75 
6,75 
9,00 1992 
(a) 
1,0 
4,1 
2,5 
0,7 
4,3 
3,0 
5,7 
2,0 
4,8 
6,7 
2,3 
8,8 
-1,9 
2,2 
-3,6 
-1,4 
1,9 
-0,7 
— 1992 
(b) 
1,6 
4,1 
2,3 
1,4 
4,6 
2,7 
4,7 
2,0 
4,8 
6,6 
2,2 
9,2 
-2,4 
2,0 
-4,4 
-0,9 
1,0 
-0,8 
7,5 
6,5 
9,3 1993/1994 
3,75 
4,25 
3,25 
3,25 
4,25 
3,0 
3,75 
2,25 
4,25 
(c) 
5,75 
2,25 
8,75 
(c) 
-1,75 
3,25 
-3,5 
(c) 
-0,5 
1,0 
-0,5 
(c) 
7,5 
6,5 
8,0 
(a) November 1990 projection. 
(b) May 1991 projection. 
(c) 1994 level. 
(d) Lending and borrowing. 
Sources: — EEC Commission (May 1991) for 1989-1992 period. 
— Netherlands Central Economic Planning Office (March 1991) for 1993/1994 period and the long-term interest 
The past year has shown how the economic situation 
and related expectations can change appreciably over 
a relatively short period. This is apparent from Table 1: 
between November 1990 and May 1991, the Com­
mission significantly revised its projections with regard 
to 1991 and 1992 in a number of respects. In the short 
term these modifications indicate lower growth and 
higher unemployment in the Community, although its 
medium term growth prospects are considered to be 
quite favourable. The modifications were partly prompted by a number 
of important developments: 
— the slowdown in both extra- and intra-Community 
growth in 1990 which had a greater impact than 
expected, 
— the temporary oil-price rise and increased economic 
uncertainty resulting from the Gulf Crisis, with only 
a gradual revival of confidence, 
No C 339/66 Official Journal of the European Communities 31. 12. 91 
— a less restrictive trend in US budgetary policy, 
— major growth in the Federal German budget in the 
wake of German unification, 
— the difficult transition to a market economy in the 
Soviet Union and Eastern Europe, in some cases 
involving political and socio-economic disinte­
gration. 
1.2. Outside the European Community 
The Commission expects economic growth of only 1 % 
in non-Community countries of the Organization for 
Economic Co-operation and Development (OECD) this 
year. In 1992, the rate of growth could rise to 2,0/2,5 % 
as a result of lower oil prices and a certain revival of 
confidence. Further recovery is expected in 1993 and 
1994. Results will, of course, largely be determined by 
the USA and Japan. The OECD's Economic Outlook 
No 49 of June 1991 mentions improved growth pros­
pects [volume of the Gross Domestic Product (GDP)] 
for the USA (13,1) and a rather more moderate improve­
ment (3,5) for Japan in 1992. The corresponding 
inflation forecasts (% GDP) are 3,6 and 1,9. One wel­
come forecast is the reduction in the balance of current 
transactions' differences between the major OECD 
countries. 
Overall, US production is expected to fall further in 
1991, essentially as a result of the major uncertainties 
which obtained in 1990. Nevertheless, a recovery seems 
possible in the course of the year—aided by such 
favourable factors as moderate interest rates and rela­
tively low oil prices. The export growth-rate and dom­
estic consumption could increase. The Federal budget 
deficit is expected to fall only gradually, persisting until 
1996 at the earliest. The balance-of-payments deficit 
will be less than 1 % of GDP in 1991 and thereafter. 
Interest rates on the capital market will probably be 
approximately 8,5%. The dollar rate seems likely to 
pick up in the wake of the positive balance-of-payments 
trend. 
Although less optimistic than in previous years, Japan's 
economic development forecasts remain favourable for 
the period 1992-1994. GDP is expected to grow at a 
rate of 4 % and the surplus on current transactions will 
stabilize at around 1 % of GDP. The budget surplus 
will still be approximately 2 % of GDP, inflation will 
fall to 2 % and interest rates will remain around 6,5 %. 
1.3. Inside the European Community 
The European Commission's 1991 and 1992 projections 
for growth, inflation and wage costs, unemployment, government lending and borrowing and current 
accounts are explained and spelt out below. The fore­
casts for 1993 and 1994 are taken from a recent publi­
cation of the Netherlands Central Economic Planning 
Office. 
A mixture of converging and diverging national trends 
forms the basis for the Community economy as a whole. 
Below we shall examine not only the Community aver­
ages but also the sharp divergences from these averages. 
For a more correct assessment, account should be taken 
of differences in Member States' economic structures 
and underlying positions. The distinctive features of 
Member States' economies will be discussed in the 
national reports. The Committee has devised special 
arrangements for delivering Opinions on these reports. 
GDP volume 
GDP in the Community as a whole is not expected to 
grow by more than 1,4% in 1991. The main reason for 
this will be the low growth rate of 0,8 % in the first 
half of the year. In particular, real growth in gross fixed 
capital formation will fall from 6,7 % in 1989 and 4,3 % 
in 1990 to 0,8 % in 1991. In the UK, gross fixed capital 
formation will deteriorate markedly from —1,9% in 
1990 to -10,4% in 1991. The Commission considers 
the underlying climate for growth in Community GDP 
to be basically sound. Growth in GDP will pick up in 
the second half of 1991 and in 1992, reaching an ex­
pected 2,3 %. A further revival to 3,25 % is forecast for 
1993 and 1994. 
While the UK will be the Member State worst hit by 
the recession in 1991 ( — 2,2%), GDP in Germany, 
Spain, Portugal and the Benelux is expected to rise by 
more than 2,5 %. A general upturn is expected in 1992, 
except in Germany and the Netherlands where a slow­
down is forecast. 
Inflation (GDP) and wage costs 
Inflation is expected to fall. However, the fall — which 
will be mainly due to external factors such as the drop 
in oil prices—will be slight (4,8 % in 1992 down from 
5,5% in 1990). The gaps between Member States are 
narrowing. Inflation will level out and then rise slightly 
in those where it is already low (2,5 % to 4%), will fall 
slightly in countries where it is currently running at 
6-7% and is expected to decline in countries with 
high inflation. The picture is somewhat different in 
Germany, where inflation is low at the moment but 
will rise. 
Nominal wage increases will speed up on average in 
1990/1991, with real unit labour costs rising again by 
31. 12. 91 Official Journal of the European Communities No C 339/67 
1%, after falling steadily for years. Wage cost trends 
will also differ sharply from Member State to Member 
State. 
Unemployment 
The Commission expects unemployment in the Com­
munity to rise again in 1992 to 9,2% of the labour 
force. This renewed rise after the steady fall in recent 
years is a serious problem. 
Unemployment is rising most steeply in the UK, increas­
ing from 5,7% in 1990 to 10,8 % by 1992. It will remain 
high (15-16%) in Spain and Ireland. Elsewhere it is 
levelling out or rising slightly. 
Government budget balance 
Italy and Greece still have large deficits (at least 10% 
of GDP), while Germany will have a 5% deficit in 
1991 owing to the costs of unification. The UK budget 
balance will also deteriorate from +1 % of GDP in 
1989 to -2% in 1991. 
Current accounts 
The Community's current account will register small 
deficits in 1991 (0,5% of GDP) and 1992 (0,8%). The 
disappearance of Germany's traditional surplus will 
weigh heavily. The relatively highest surpluses will be 
in Luxembourg (25% of GDP) and the Netherlands 
(4% of GDP), while Greece will have the relatively 
highest deficit (4% of GDP). 
1.4. Uncertainties 
Because of their major repercussions, such imponder­
ables as oil prices, the dollar rate and world trade 
developments warrant special attention. Oil prices are 
expected to remain around 20 US dollars/barrel. At the 
same time, it seems likely that oil supplies will be more 
plentiful than estimated because of the Middle East's 
great need for foreign currency earnings and internal 
disagreements within the Organization of the Petroleum 
Exporting Countries (OPEC) on strategy. This will 
push oil prices down, perhaps to 15 US dollars/barrel. 
For oil-consuming countries, this means an improve­
ment in terms of trade, greater purchasing power, 
reduced inflation and increased production. 
The dollar rate is also an imponderable. An increase in 
the value of the dollar would lead to reduced inflation, 
lower growth in production and higher unemployment 
in the USA. It would also push up the government 
deficit along with the deficit on the balance of current transactions. This would strongly revive the prospect 
of the so-called double deficit. 
Whilst the expansion of world trade is expected to 
decline to 3,5% this year, the Netherlands Central 
Economic Planning Office thinks that a return to the 
1989 level (7%) is possible in 1993/1994. Nevertheless, 
unforeseen economic developments in the industrialized 
countries, or the failure of the Uruguay Round could 
lead to very different results which would, in turn, have 
a major impact on the Community's economy. 
2. The European Community on the threshold of 1993 
2.1. Historical background (l) 
The Community now stands on the threshold of a new 
phase in its still young existence. A brief look at the 
past can help to put this new phase in its historical 
perspective and clarify its significance. 
The Benelux Union, which was a forerunner of the 
Community, was created in 1944, and now numbers 
20 million inhabitants in three countries. 
The European Community was established in 1957 by 
the six founder members (Benelux, Germany, France, 
Italy) with a total population of 180 million. 
In 1972, the Community expanded northwards (to 
include Denmark, Ireland and the UK), bringing its 
total population to 260 million. 
Greece acceded in 1981 followed by two southern 
countries, Spain and Portugal, in 1986. This produced 
a total Community population of 320 million, a figure 
since increased to 336 million by German unification 
in 1990. 
The Community's objectives are equally significant. 
Economic cooperation leading to the creation of a 
common market was the idea from the very start. Many 
instruments have been devised and deployed to serve 
this end. Economic and Monetary Union has gradually 
emerged as the goal. In a parallel development, objec­
tives of a political nature have been mentioned in the 
Treaty and elsewhere. Recently, these objectives have 
been incorporated in plans for Political Union. It is now 
possible to speak of a kind of European legal order 
with its own objectives, its own powers and decision­
making procedures and its own administrative, super­
visory and legislative bodies. The Community is based 
on the principles of human rights, pluralism, regular 
(l) The data in 2.1 and 2.2 are taken from Economics of European 
Integration — Theory, Practice and Policy by W.T.M. Molle 
(Dartmouth, Aidershot, UK) and from the Economisch Statis-
tische Berichten (December 1989, pp. 1271-1273) Netherlands 
Economics Institute, Rotterdam. 
No C 339/68 Official Journal of the European Communities 31. 12. 91 
elections, the market economy as the principal form of 
economic organization and an allocation of common 
functions based on the principles of checks and bal­
ances. 
The division of responsibilities between the Community 
and the Member States must be based on the principle 
of subsidiarity in areas which do not fall within the 
former's exclusive jurisdiction. 
This historical sketch reveals a remarkable regularity 
in the enlargement of the Community at approximately 
14-year intervals (1944, 1958, 1972, 1986). Article 237 
of the Treaty entitles any European State to apply for 
membership. The accession of the countries of the 
European Free Trade Association (EFTA) with a total 
population of 30 million seems possible before the year 
2000. The longer-term could see the accession of the 
countries of Central and Eastern Europe (excluding the 
USSR: 120 million inhabitants). It seems desirable in 
extending the Community's internal structure, with its 
specific objectives, divisions of power and types of 
institutions to bear in mind its projected longer-term 
size. 
The results of a study conducted by Eurodata Survey 
in March 1991 may help to shed light on this brief 
account of the Community's internal and external 
development. Among European citizens (EC-EFTA), 
68% favour closer union and 60% a single Community 
currency and foreign policy, with only 14% being 
opposed to the accession of Eastern European countries. 
2.2. Freedom of movement 
If, in accordance with the objectives of the Treaty, 
the free movement of individuals, goods, services and 
capital has become a reality by 1 January 1993, the 
volume of these movements seems likely to increase 
substantially over the next decade. 
Thus, it is forecast that intra-Community trade in goods 
wil increase from 8% of GDP in 1970 to 20% by the 
year 2000, and that intra-Community trade in services 
will grow from 4% of GDP to 20%, too, over the same 
period. 
The proportion of Community nationals employed in 
another Member State has remained at approximately 
2% for 30 years. There is no indication that the number 
of Community nationals with a permanent residence in 
another Member State is likely to increase significantly. 
Immigration into the Community could, however, 
increase. This topic will be dealt with in a separate 
Opinion. The share of investment in other Member States has so 
far been relatively slight. Between 1970 and 1985, the 
share of foreign investment by and in Member States 
fluctuated around 1% of total investment, and in recent 
years income from investment in other Member States 
has represented 2% of GNP. These percentages are 
expected to shoot up in the coming decade. 
The further development of such movements will 
depend on the establishment of the requisite conditions 
in good time. Specifically, this means that the 283 
proposals in the White Paper must be enshrined in 
European regulations or transposed into national legis­
lation on the basis of directives, thereby becoming 
applicable in the Member States. 
Some 213 of these proposals have already reached this 
stage at Community level. The remaining 70 are await­
ing further examination or final Council approval. If 
1993 is to constitute a genuine departure, the new 
Community decision-making procedure must be agreed 
in 1991. 
In this connection, the Community fully endorses the 
call made at the Rome European Council on 14-15 
December 1990 for every effort to be made to ensure 
that all measures necessary for the completion of the 
internal market are adopted in time to be operational 
by 1 January 1993. 
The Committee is particularly concerned about pro­
gress with regard to: 
— the harmonization of indirect taxes, following the 
agreement in principle reached by the ECOFIN 
Council on 24 June 1991, 
— the free movement of persons, 
— transport, 
— veterinary and plant-health measures. 
If restrictions necessitating intra-Community border 
checks still exist in any one of these areas, a free internal 
market will be out of the question. 
2.3. European Political Union 
2.3.1. Balance between economic andpol-
itical status 
European Political Union is important for the Com­
munity's relations with third countries as an indepen­
dent entity. The Community's increasing economic 
importance in the world context and in international 
organizations [General Agreement on Tariffs and Trade 
(GATT), International Monetary Fund (IMF), Inter­
national Labour Organization (ILO)] is producing a 
31. 12. 91 Official Journal of the European Communities No C 339/69 
corresponding increase in its political significance. The 
Gulf Crisis, the stance taken on agricultural policy 
during the Uruguay Round and the recent events in 
Yugoslavia revealed the need for the Community to 
improve its decision-making. This makes it absolutely 
essential to strike a balance between the Community's 
economic and political unity. 
This balance is all the more necessary against he back­
ground of the sweeping political and economic changes 
now taking place in the wider European context. A 
European Community with recognizable features and 
identifiable objectives is an essential element in the 
context of efforts to guide the future development of 
this part of the world. 
2.3.2. The role of the Economic and 
Social Committee 
The form and substance of the democratic allocation 
of powers and responsibilities within the Community 
is of great importance to the Committee. The Com­
mittee also thinks it important to have efficient and 
transparent decision-making machinery, especially at 
the Council. The economic and social sectors must 
know which rules they have to observe and how these 
rules are conceived. 
At present, the Committee is purely an advisory body. 
It is not seeking to expand this function with a view to 
participating in decision-making, since it thinks that, 
in accordance with the tradition of parliamentary 
democracies in the Member States, the European Parlia­
ment should be the body to participate in decision­
making. 
The Committee does, however, think that it should be 
an independent, fully-fledged advisory body. This view 
is based on the following considerations: 
— the advisory function involves social and economic 
interests which play an extremely important part in 
policy implementation and in the formulation of 
that policy, 
— the advisory function makes it possible to exploit 
the knowledge and expertise of the groups con­
cerned, 
— the advisory function creates a European forum in 
which representatives of the different economic and 
social interest groups can hold a regular and system­
atic exchange of views on important economic and 
social questions. 
The implementation of these functions increases the 
effectiveness of policies, enlarges their European basis 
and promotes mutual understanding between economic 
and social interest groups. In this connection, the Committee would draw atten­
tion to the many elements in the Community's existing 
socio-economic advisory structure (ESC, consultative 
committees, joint committee, direct advice from the 
Committee of representatives of European employers' 
and workers' organizations). The main resultant prob­
lems are a lack of cohesion, co-ordination and the 
absence of procedural transparency of the whole struc­
ture. The Committee would warn against proliferation 
in this respect and is concerned that this lack of co­
ordination and transparency may lead to a duplication 
of activity or the exclusion of individual socio-economic 
advisory bodies. 
2.4. Economic and Monetary Union 
2.4.1. Main objectives of economic and 
social policy 
In its Opinions of 9 October 1989 and 27 February 
1991 (Doc. ESC 1135/89 and Doc. ESC 273/91), the 
Committee commented in detail on economic and mon­
etary union. All Member States should participate in 
the work of the European Central Bank System (itself 
responsible for regulating the ECU money supply and 
formulating a common monetary policy) and should be 
involved in the co-ordination of economic and budget­
ary policies. As was the case with the exchange-rate 
mechanism after its introduction in 1979, waivers could 
be provided for at the beginning of the third stage 
whereby the exchange rates of Member States failing 
to attain the requisite convergence would be allowed 
to go on fluctuating against the ECU. 
The Committee continues to regard the completion of 
the internal market and full Economic and Monetary 
Union as two sides of the same coin and as conditions 
to be satisfied by the Community itself. 
Nevertheless, it wishes to give more detailed consider­
ation to one key aspect, namely the co-ordination or 
'convergence' of national/social and economic policies. 
The 1990/1991 Annual Economic Report states that 
while economic convergence has significantly improved 
since the beginning of the Eighties, it fared badly 
between 1988 and 1990. However, according to the 
Commission, convergence requirements will be tight­
ened in the context of multilateral surveillance. 
The Committee fully recognizes the difficulties sur­
rounding economic policy convergence in the twelve 
Member States, each with its own history and unique 
circumstances. The necessary convergence can, how­
ever, be achieved more easily the higher the rate of 
No C 339/70 Official Journal of the European Communities 31. 12. 91 
sustained economic growth in the EC, provided that 
price stability is maintained. 
Inadequate progress towards convergence could delay 
the introduction of Economic and Monetary Union or 
implementation of the proposed timetable. 
The Committee seeks to contribute to the establishment 
and maintenance of economic and social policy co­
ordination in the Member States. 
It does this by examining the major economic and social 
policy objectives and considering the role it might play 
in their implementation. 
Point 4 of the Opinion of 27 February 1991 covers many 
aspects of convergence and, in particular, calls on the 
Member States to agree on the main economic and 
social policy objectives. The Committee therefore calls 
for the general objectives of Community economic and 
social policy to be clearly spelt out in their relationship 
to each other. These goals can serve as a Community 
reference framework. They can also be used to test the 
multi-annual guidelines periodically laid down by the 
Council of Economic and Finance Ministers. 
These major objectives are set out in a number of EC 
Treaty articles. Article 2 refers to a continuous and 
balanced expansion, an increase in stability and an 
accelerated raising of the standard of living. Article 104 
mentions the equilibrium of the Member States' overall 
balance of payments, a high level of employment and 
a stable level of prices. Articles 130 A and 130 B are 
concerned with economic and social cohesion, whilst 
Article 130 R covers environmental protection and 
improvement. 
If these widely scattered objectives can be clearly 
collated and brought to the attention of Europe's citi­
zens or at least of the economic and social interest 
groups representing them, the Community's central 
goals should gain greater recognition beyond the circle 
of policy-makers directly involved. This should enhance 
the Community's social acceptability among its citizens. 
Agreement on such objectives is also extremely 
important for the discussion of economic policy, where 
the emphasis can shift from arguments about irreconcil­
able ideological differences to the objective testing of 
potential measures. These central objectives are therefore summarized in 
this Opinion. 
In the Committee's view, the main goals of economic 
and social policy include: 
a) Sustained and balanced economic growth, i.e. econ­
omic growth which ensures the earth's survival and 
continuing productivity. 
b) Full employment, i.e. work for all who are willing 
and able to work. This goal should not be confined 
to giving individuals a better chance to participate 
in the productive process but should also be aimed 
at giving them opportunities to better themselves. 
c) Price stability. Attainment of this objective is the 
principal task of the European System of Central 
Banks in the context of Economic and Monetary 
Union. In its Opinion of 27 February 1991, the 
Committee defined the objective even more pre­
cisely as 'price level stability' or 'stability in the 
value of money'. 
d) Balance of payments equilibrium. This requirement 
is important for the Community's overall position 
in relation to third countries. 
e) Economic and social cohesion. This essentially con­
cerns the definition of the concept of European 
citizenship in the social and economic sense. Exam­
ination of this topic has identified the following 
factors: 
— the spread of affluence: Treaty Articles 130 A 
to 130 E inclusive establish a Community frame­
work for this objective, inter alia by stressing 
the need to develop backward economic regions, 
— integration of the social dimension in the 
Internal Market through the acceptance by 11 
of the 12 Member States of the Community 
Charter of Fundamental Social Rights and its 
implementation in an action programme, 
— development of the social dialogue, in which 
workers' and employers' organizations can con­
tribute to Community development in line with 
their important positions in society. 
The question of economic and social cohesion was 
discussed in detail in the Committee's May 1991 
Opinion on Social Developments in the Community in 
19901}). 
2.4.2. Role of the ESC in the context of 
convergence 
As already indicated in point 2.4.1, the convergence of 
Community socio-economic policy is a very difficult 
(!) OJ No C 191, 22. 7. 1991, p. 10. 
31. 12. 91 Official Journal of the European Communities No Q339/71 
undertaking. It must proceed from differences in the 
socio-economic history and present situation of the 
Member States. It also involves a re-allocation of 
responsibilities between the Member States and the 
Community on monetary/economic matters, whilst the 
Member States must eventually be prepared to give up 
such an important right as the control of exchange 
rates. 
The Committee thinks it can play a part in promoting 
the co-ordination of social and economic policies. 
As is well known, the Committee represents a variety 
of social and economic interests within the Community. 
These interests give the Committee numerous func­
tional contacts with the Member States. On the other 
hand, by virtue of operating in the European context, 
in which many social and economic questions are dis­
cussed, the Committee and its members appreciate the 
Community implications of social and economic policy. 
In its dual capacity as a representative of national 
interests and an advisor on Community policy, the 
Committee can fulfil a consultative function in the co­
ordination of economic and social policy. 
The Committee has already commented on this involve­
ment in the co-ordination of economic and social policy 
in its Opinion on Economic and Monetary Union in 
which, in particular, it asked to be consulted on pro­
jected multi-annual guidelines and national reports. It 
repeated this request in its Opinion on the 1990/1991 
Annual Economic Report. The Committee would also 
like this functional involvement to be formally recog­
nized by means of a Council decision. In the meantime, 
it will seek to make a concrete contribution in the 
follow-up to Member States' economic reports. 
In this context, its aim will be to discuss the national 
reports with economic and social interests groups in 
the countries concerned. 
The Committee intends to conduct this exchange of 
views with national representatives in the context of 
its six-monthly Opinions on the social and economic 
situation in the Community. 
The Committee hopes that these periodic contacts will 
have a favourable impact on mutual attitudes, and ( 
trusts that this will further social and economic policy 
co-ordination in the Member States. 3. Particular economic and social considerations 
3.1. German unification (*) 
In its Opinion of 20 November 1990 (Doc. ESC 1378/ 
90), the Committee dealt fully with the expected social 
and economic implications of unification. The causes 
of the problems which are now coming to the fore are 
identified in that Opinion. 
In the former GDR industrial plant and equipment is 
obsolete and the environmental situation is cata­
strophic; major sales outlets have been lost in the Soviet 
Union and Eastern Europe; the population prefers 
Western products, infrastructure is grossly inadequate 
and neither the authorities nor the private sector are 
professional enough to operate a social market econ­
omy; the question of ownership remains uncertain in 
some respects, and productivity is low. 
However, despite the terrifying increase in unemploy­
ment to 2 million, there have been some positive devel­
opments. 
Thus, many new businesses are being established 
every month; more than one million new jobs have 
been created since 1 July 1990; business will invest 
DM 26 million in the new Lander in 1991; Federal 
government aid totalled DM 50 000 million in 1990, 
will rise to roughly DM 100 million in 1991 and, on 
present estimates, will amount to approximately DM 
400 000 million over the period 1990-1994; DM 50 000 
million is to be invested in the rail network and the 
same amount in telecommunications by 1994; money is 
earmarked for 280 000 jobs in the health and social 
services sector and a retraining programme for 550 000 
individuals is planned. 
Germany should take responsibility for further action 
in the new Lander. The Committee is authorized to 
comment only in the context of the rules governing 
Community policy (e.g. the structural funds). Nonethe­
less, the consequences of unification for Federal 
Government policy will also clearly affect the economic 
situation in the Community. 
3.2. European Economic Area (EEA) 
The establishment of the European Economic Area can 
be regarded as both a goal in itself and as an interim 
stage in the enlargement of the Community to include 
all or some EFTA countries (Austria and Sweden having 
applied for membership in the meantime). The EEA 
deserve support in either case. The EFTA countries 
operate on the same political and socio-economic bases 
as the Community. As a Community trading partner, 
EFTA is as large as Japan and the USA combined. 
(') The information given in 3.1 is taken from a press conference 
given by the German Parliamentary State Secretary, A. Pfeifer, 
on 4 June 1991. 
No C 339/72 Official Journal of the European Communities 31. 12. 91 
The Committee is aware that a number of issues remain 
open. These concern aspects of competition and agricul­
tural policy, the protection of fishing grounds, transit 
traffic, aid to less-developed regions and influence on 
Community decision-making. In view of the common 
history and interests, the Committee feels confident 
that agreement can be reached on these issues. 
3.3. Central and Eastern Europe i1) 
After the dreams and ideals of the 1989 revolution, 
Central and Eastern Europe is now facing harsh sober­
ing reality. The transition to a market economy is 
coupled with negative economic growth for the time 
being. Because of the financial and economic crisis in 
the Soviet Union, the Central and Eastern European 
nations are being forced to speed up their quest for 
other export markets. Transforming State enterprises 
into market-oriented businesses is also difficult. Unem­
ployment is rising significantly, foreign trade is declin­
ing, inflation rising, debts increasing and productivity 
falling, while technology is obsolete, the infrastructure 
neglected and the environment polluted. There is also 
great concern about the preservation of social stability. 
During these times of change, these countries are look­
ing to Western Europe, and in particular, to the Euro­
pean Community from which they are seeking a favour­
able response and a constructive contribution. 
The Committee welcomes the Community's rapid 
adoption of numerous initiatives and measures in 
response to events in Central and Eastern Europe, and 
would mention the following in particular: 
— the Commission's coordinating role in establish­
ing and implementing the aid programme for 
24 countries, 
— the establishment in May 1990 of a European Bank 
for Reconstruction and Development with an initial 
capital of ECU 10 000 million, 
— the adoption of an action plan totalling up to ECU 
500 million in 1990, ECU 900 million in 1991 and 
more than ECU 1 000 million in 1992, 
— the establishment of a European Training Foun­
dation, 
— the rapid conclusion of trade and cooperation agree­
ments and the application of the most favoured 
nation clause to the countries concerned, 
— the opening of discussions on so-called association 
agreements, 
(J) Point 3.3 is based on a speech given by Commission Vice-
President F.H.Y.Y. Andriessen in The Hague on 21 March 
1991. — commitments totalling ECU 27 500 million (March 
1991), including ECU 5 700 million in subsidies, 
9 000 million in loans and 8 000 million in capital 
from the European Investment Bank, the World 
Bank and the European Coal and Steel Community, 
— the proposed Pan-European Energy Charter. 
The Committee thinks that the Community must con­
tinue to give this positive response and make this con­
structive contribution. In this context, the general objec­
tives should be greater access to Western markets, sup­
port for improved standards of training and education 
and for environmental and infrastructure measures and 
economic reorganization based on market economy 
principles. The Committee would stress that the course 
now being pursued in Central and Eastern Europe must 
be supported and safeguarded. 
The overriding consideration, however, must be that 
these countries must in the final analysis solve their 
own problems, giving priority to the establishment of 
a sound infrastructure and the creation of legal certainty 
and political stability. This would encourage Western 
businesses to invest in these countries. In view of its 
possible expansion, the Community must stress the all-
embracing need for human rights to be respected, the 
rule of law acknowledged, a variety of political parties 
permitted, and the market economy accepted, that is for 
acceptance of the values forming part of the democratic 
heritage. The Committee is preparing a separate 
Opinion on the Community's relations with the 
countries of Central and Eastern Europe. 
The present Opinion takes no account of the conse­
quences of the recent events in the USSR. The moves 
towards democracy and a market economy appear to 
have been reinforced rather than undermined so that 
additional Community efforts are both necessary, and 
justified as a means of helping to ensure their continu­
ation. 
3.4. GATT 
The results of the eighth round of GATT negotiations 
are of particular importance for the Community's 
longer-term future. 
GATT exists to reduce tariffs and other trade barriers 
and end discrimination in international trade. 
Free international trade is of major concern to the 
Community, which must remain an active participant 
on the world market as both an importer and exporter. 
31. 12. 91 Official Journal of the European Communities No C 339/73 
The free movement of goods and services is also one 
of its internal objectives. Free trade promotes world 
prosperity and the international development of more 
backward countries. The Committee therefore thinks 
it essential for the eighth GATT round to produce 
positive results. 
A variety of topics are on the agenda for these nego­
tiations. In addition to the attainment of such general 
objectives as the reduction and elimination of tariffs 
and non-tariff measures and the greater freedom of 
trade, discussion will cover the inclusion of the textiles 
and clothing sectors within the GATT, revision of the 
safeguard rules, improved arbitration procedures, the 
commercial aspects of intellectual property rights, the 
inclusion of services within the GATT and the 
reduction of all forms of agricultural support. 
The discussions have so far been blocked by failure to 
agree on arrangements for trade in agricultural prod­
ucts, which is so far only partially covered by the GATT 
rules. 
It is clear from the agenda that a variety of Community 
interests are at stake in different sectors. In this general 
Opinion on the economic situation the Committee 
would therefore stress that the consequences for the 
Community of the success or failure of these nego­
tiations must be assessed in this broad context, within 
which agricultural policy forms a significant but not 
dominant element. 
The Committee will deliver separate Opinions on the 
results of the GATT negotiations and the agricultural 
policy to be implemented in and by the Community. 
3.5. Developing countries 
The external position of many (oil-importing) 
developing countries deteriorated significantly in 1990. 
The causes for this were: falling demand for raw ma­
terials, worsening terms of trade due in part to higher 
oil prices and high international interest rates. These 
countries' real export earnings are hardly expected to 
increase this year, and more cash will flow from 
developing to industrialized countries than vice-versa. 
In some cases, the huge foreign debt is also a major 
obstacle to social and economic development. Develop­
ments in Africa are a particular source of concern. 
Making co-operation with and support for the 
developing countries a Community policy objective 
seems increasingly necessary. This will require: — the assignment to the Community by the Treaty of 
joint responsibility for co-operation with and aid to 
these countries, 
— the coordination of this policy in the Member States, 
— the reduction and, if necessary, writing-off of 
developing countries' debts if they are prepared to 
carry out economic reforms and policy adjustments, 
— reforms of the Generalized System of Preferences to 
allow the developing countries broad access to the 
internal market. 
3.6. Demographic trends 
Demographic trends over the next 20 to 30 years will 
be extremely important for the social and economic 
development of the Community. 
In absolute terms, the world's population is still increas­
ing and will rise from 2 500 million in 1950 and 5 000 
million in 1990 to 8 000 million by the year 2020. 
Relatively speaking, however, and notwithstanding an 
increase in average life expectancy, the rate of growth 
will decline—from 100% in 1950-1985 to 65 % in 1985-
2020. This slowdown is a virtually universal demo­
graphic phenomenon, caused by the general tendency 
for women to have fewer children. At present, the 
average is Europe 1,5, Far East (including Japan) 2,2, 
South America 3,5 and the Indian sub-continent 4,7. 
Africa, where the average is approximately 6, is the 
only continent defying the trend. 
In 1950, 35% of the world's population lived in the 
USA, Japan and what is now the EC; in 2010, this 
figure will be 15 %. By the latter date, Africa's present 
population of 650 million will be the same as China's, 
i.e. 1 250 million. 
The principal consequences of these far-reaching devel­
opments will be: 
— migratory movements, with Europe being particu­
larly affected by influxes from African countries 
bordering on the Mediterranean, 
— the formation of new world-power centres in such 
areas as China, India, Indonesia, Brazil and Mexico, 
— environmental damage resulting from increased 
C02 emissions, deforestation and water pollution. 
The Community will face the major challenge of an 
ageing population, a phenomenon affecting nearly all 
the Member States, though at different rates. 
No C 339/74 Official Journal of the European Communities 31. 12. 91 
This development will essentially affect: 
— the labour market: although the labour force will 
continue to account for the same share of the total 
population for the time being, this share will eventu­
ally shrink. The increasing average life expectancy 
of the working population will make it essential for 
countries to devise new schemes for the discharge 
of tasks, keep people at work for longer, tap new 
sources off labour or replace the factor labour by 
capital, 
— the financing of pensions: whilst the proportion of 
pensioners will eventually double, the number of 
employed persons responsible for generating 
society's wealth will decline, 
— new patterns of consumption: older people's needs 
will become increasingly important, in particular 
through a growing demand for health services and 
special accommodation. 
The decreasing numbers of young and increasing num­
bers of old people will oblige the Member States to 
introduce a number of economic and social measures 
which ought to be coordinated at Community level. 
4. Conclusions and recommendations 
4.1. Conclusions 
The Committee notes that: 
a) the Commission's analysis shows that the marked 
slowdown in economic development in the second 
half of 1990 and the first half of 1991 is now being 
reversed but that the gap on the US and Japan will 
not be closed; 
b) there are great differences from country to country, 
and the national reports remain extremely 
important; 
c) after falling for several years, unemployment will 
rise to 9,2 % in 1991/1992. This level is unacceptably 
high, both in itself and in relation to the USA 
(6,6%), Japan (2,2%) and the EFT A countries 
(2,5%); 
d) real unit labour costs rose by a total of 1 % in 1990/ 
1991 after falling between 1982 and 1989; 
e) the growth in investment will fall from 6,7% in 
1989 and 4,3% in 1990 to 0,8% in 1991. 4.2. Recommendations 
The Committee makes the following recommendations: 
4.2.1. As regards the Community 
a) The principal goals of economic and social policy 
should be set out in relation to each other so as to 
provide a reference framework for Member States 
in their efforts to achieve the convergence sought in 
Economic and Monetary Union. 
b) The Committee should be involved in shaping this 
convergence. 
c) The promotion of employment opportunities and 
steps to reduce unemployment should be given top 
priority in Community and Member States' policies. 
d) Attention should be given to fighting inflation and 
curbing production costs. The profitability and 
growth of investment and the improvement of pro­
ductivity are matters which call for a sustained 
effort. 
e) The consequences of the demographic process in 
the Community should be dealt with at a policy 
level. 
4.2.2. As regards relations with non-
Community countries in Europe 
f) The Community should, in principle, remain open 
to new members. Nevertheless, it must first develop 
a democratic and efficient decision-making process 
which takes account of many more members. In 
addition, candidates must accept the status quo in 
the internal market and the results of the current 
Intergovernmental Conference and be able to con­
tribute to their implementation. 
g) The European Economic Area should be regarded 
as a form of co-operation per se but also as a stage 
on the way to a fully-fledged Economic Community. 
Implementation thereof in the short term should be 
given support. 
h) A positive attitude towards the countries of Central 
and Eastern Europe should be maintained and 
actively strengthened. The recent historical develop­
ments should be supported. 
4.2.3. As regards non-Community 
countries inside and outside 
Europe 
i) An enormous effort should be made to secure a new 
GATT agreement. GATT is very important for the 
Community as the world's largest trading entity. 
31. 12. 91 Official Journal of the European Communities No C 339/75 
j) The Community's joint responsibility for cooper­
ation with and aid to developing countries should 
be recognized in the Treaty. 
k) Steps should be taken within the framework of 
international monetary organizations (IMF, G 7, 
etc.) to initiate an analysis and possible reform of 
Done at Brussels, 26 September 1991. 
I. INTRODUCTION 
1. Support for a global policy 
1.1. Adjustment 
1.1.1. The Committee welcomes the Commission 
Communication and its intention to bring the Common 
Fisheries Policy (CFP) into line with the new situation. 
1.2. Consultation 
1.2.1. The Committee stresses that the Commission 
document takes the form of a Communication, and will the existing international monetary system, which 
many see as contributing to the world's, and thus 
to the Community's, present economic difficulties. 
1) Consideration should be given to the likely influx of 
immigrants, in particular from Central and Eastern 
Europe and North Africa. 
be followed by a report which the Commission is to 
submit to the Council by 31 December 1991. The Com­
mission wishes to weigh up its stance against that of 
the Member States' authorities and of those involved 
in the sector at national and EC level. 
1.3. A global policy 
1.3.1. The fisheries sector as a whole is highly com­
plex. For this reason, a global policy is to be preferred 
embracing all aspects (stocks, prices and markets, struc­
tures, social aspects). The Chairman 
of the Economic and Social Committee 
Francois STAEDELIN 
Opinion on the Communication from the Commission to the Council and the European 
Parliament on the Common Fisheries Policy 
(91/C 339/14) 
On 11 January 1991 the Commission decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
Communication from the Commission to the Council and the European Parliament on the 
Common Fisheries Policy. 
The Section for Agriculture and Fisheries, which was responsible for preparing the Commit­
tee's work on the subject, adopted its Opinion on 5 September. The Rapporteur was 
Mr Silva. 
At its 289th plenary session (meeting of 26 September 1991), the Economic and Social 
Committee adopted the following Opinion nem. con. with two abstentions.