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COM (83) 115 
 
 
 
Vol. 1983/0035 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), t his file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 v om 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION  OF THE  EUROPEAN  COMMUNITIES 
COM(83)  115 final 
Brussels,  1 march 1983 
INTERIM REPORT  FROM THE COMMISSION TO THE  COUNCIL 
on enlargement  : internal  measures  in the two  applicant countries 
in particularly  sensitive  sectors 
C0M(83) 115 final 

COMMISSION 
OF THE 
EUROPEAN COMMUNITIES 
Internal  measures in the two  applioant countries  in particularly  sensitive  
sectors 
1. At its meeting in Copenhagen on 3 and 4  December  1982, the European 
Council welcomed  the inventory presented  by the Commission and, 
inter alia, called on the Commission to  explore with  the two  applicant 
countries  the introduction  of a number of internal  measures  before 
accession with  a view to  preparing  particularly  sensitive sectors  of 
their economies for  accession. 
2. The Commission is  herewith presenting  to the  Council  an initial 
report on these exploratory talks  and an amplified version  of the 
proposals sketched  out in the  inventory  of 12 Hovember  1982. If the 
Council is in agreement, the Commission  will pursue  its exploratory 
talks with the two  applicant countries  on this basis. 
3. Exploratory talks 
Initial contacts with  the Spanish Government  took place in 1982. It 
emerged that Spain  is basically  prepared  to envisage  the introduction 
of - as yet  undefined  - pre-accession  measures to smooth the  path to 
accession  for particularly  exposed  sectors  of the  Spanish economy, 
as soon as the  negotiations  have made sufficient 
progress for accession  to represent  a practical  prospect. 
Provisional  address:  Rue de la Loi 200, B-1040  Brussels  - Telephone 35 00 40-35 80 40 - Telegraphic  address:  «COMEUR  Brussels.  -
Telex:  eCOMEURBRU  21 877  » 

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The Commission  is aware that an essential  criterion  for the 
Spanish Government  in this respect is that substantive negotiations 
should have begun on a realistic  basis, in  chapters  where thiB 
stage has not yet  been reached,  in particular the agricultural 
sector. During  the exploratory contacts, the  Spanish  Government 
stressed the  need for the Community  to provide aid within the 
framework  of the Spanish  effort to introduce the  abovementioned 
internal  measures. 
Following the  Government  crisis that arose in Portugal at the end 
of 1982/beginning  of 1983, the  initial  contacts  with the 
Portuguese  Government  have been slightly  delayed.  They are now 
scheduled  for the  beginning  of March. 
4. Elaboration of inventory proposals 
A. Industry 
Current situation 
Industrial  consultations  were established  between  the Commission  and 
the Spanish  Ministry of Industry in 1978  with a view to setting up 
an exchange  of information  aimed at improving  each side's knowledge 
of the other's industry.  However,  in 1982 it  became impossible to 
continue  the meetings,  as the most sensitive  industrial  sectors in 
Spain were being restructured, the  first results of  which are not 
yet available. 
Pjrojposal£ 
As soon as the new  Spanish  Government  was formed,  contacts  were renewed 
with the Spanish  authorities  which welcomed  the principle of  starting 
up the consultations  again.  The Commission feels that from now on the 
meetings  should be  more than just information  exchanges and  become 
consultations in the  true sense of the  term, particularly  in the case 
of sectors  which,  as a result of  accession,  will create problems for the 
Community  of Ten and/or the  applicant  countries,  depending on whether they 
are sectors  where the Community  already  has an accepted  policy or sectors  where 

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only Commission  proposals  exist or a particular  situation  means that 
new measures  are likely to be necessary.  Moreover,  the Rome and 
Paris Treaties  impose  certain  constraints  on the action  which might 
be envisaged,  particularly  where restructuring  is accompanied  by 
economic  measures  (financial  or fiscal)  in connection with state  aids. 
For example,  as the  Commission  mentioned  in its inventory  and 
proposals  on the problems  of enlargement,  the Spanish  steel industry, 
like the Community's,  has been hit by the consequences  of the 
recession.  The Spanish  Government  has adopted  several decrees  aimed 
mainly at easing the  financial  burden on undertakings, promoting 
investment in  rationalization  and, in  certain  cases, providing for 
subsidies  in the event  of capacity cutbacks.  So far the Commission 
has not been informed  of the  measures  already taken  or envisaged  in 
Spain pursuant  to these decisions,  but the  Spanish  authorities  have 
indicated  that all  the plans for  industrial  redevelopment  were being 
examined  by the new Government  with a view to defining fresh 
priorities. 
When the Commission  next meets the Spanish  authorities  for industrial 
consultations,  the various  disciplines  governing state aids  and the 
placing of goods on the market  in trade  between  the Community  and Spain 
will be examined  in detail. The  steel sector  will be the main seotor 
concerned  but the  Commission  intends  to ask  Spain to pursue the 
consultations  in other sensitive  sectors such  as textiles,  shipbuilding, 
the motor industry  and any  other sectors  which may be  identified. 
The accession  of Portugal should  not create any more specific 
difficulties  in the  sensitive  sectors  of the  Community  of Ten, except 
for trade in  textile  products,  where post-accession  arrangements 

4 
have already  been adopted.  However,  Portuguese  industry requires 
pre—accession aid  to lessen the blow at the  time of accession, 
particularly  in the  motor industry. 
Finally,  the Community  could enlist or encourage  the participation  of 
the applicant countries  in R&D  activities. 
B. The aJgri£u]1tural_s_ctior 
Present situation 
It has been decided,  in the  context of the  Negotiating  Conference,  to 
draw up an annual comparison  of prices in the  applicant countries  and 
the Community  and an  annual  report on the  aids granted  in the  applicant 
countries.  Both the comparison  and the  report  will be published  as 
official  documents  of the  Conference. 
As regards  secondary  legislation,  a detailed  examination  of all 
Community  agricultural  legislation  has already  been carried  out, over 
three sessions, with  the administrations  of the  applicant countries. 
This exercise  will continue with  the necessary  updatings. 
Within the Consultation  framework: 
(i) the Commission  forwards  to the  applicant countries all proposals 
that are likely to "be of  particular  interest  to them (for example 
the proposals concerning  the review of the  Mediterranean  accrois ) 
at the same  time as it forwards  them to the  Council. This  is 
followed  by in—depth contacts  at departmental  level between  the 
Commission  and the  applicant countries,  at the  request of the 
latter, for any nececsary  clarifications  and exchanges  of views; 

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(ii) technical  meetings  concerning  the various  agricultural  sectors  are 
organized  periodically  for an exchange  of information  on developments 
in the Community's  and the  applicant countries*  legislation  in the 
sector under consideration. 
Proposals 
(a) The annual  reports  on prices and aids, besides  being published  as part 
of the Proceedings  of the  Conference,  should be followed  up by a  formal 
Opinion, on the  basis of a Commission  proposal, delivered  by the  Council to 
each of the  applicant countries. 
This Opinion  should underline  in particular,  with a view to the  formulation 
of future decisions  by the  applicant countries,  the points of convergence 
which could help  to facilitate  and prepare  for integration,  and any  point 
of divergence  from the policy which should be followed. 
(b) The applicant countries should  forward  to the  Commission  their proposals 
concerning: 
(i) any basic policy  guideline  and any amendment to  their agricultural 
policy; 
(ii) irrigation  plans for  agricultural  purposes  and the  objectives being 
pursued; 
(iii) any action that could bring  about an appreciable increase  in 
production  in a sector under consideration  (redevelopment, 
restructuring,  etc.); 
(iv) any measure  likely  to bring about a better control  over productions 
with a tendency  to surplus.  _ 
Where appropriate,  the Council,  on a proposal  from the Commission,  should 
deliver an opinion  on the  project in question. 
(c) As the  substantive  agricultural  negotiations  are getting  under way, 
the applicant countries should  begin to establish,  wherever  possible,  the 
machinery  and resources  needed  to facilitate  the adoption  of the  acquis  
communautaire  in the  various sectors. 
In this context,  priority  should be given to the  measures  already  in force 
in the Community  which are designed  to bring under control  lines of production 
that are in  surplus or in danger of becoming  so. 

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This concerns in  particular: 
01iye_ oil_ 
Limitation  at the  earliest  possible date of any state production aids to 
areas planted with  olive trees* 
Wine 
(i) Ban on any new plantings of  wine grape vines, with a possible derogation 
for areas where quality  wines produced  in specified  regions  (quality 
wines p.s.r.) are  grown; 
(ii) Encouragement  for the  grubbing-up  and definitive  termination of 
production in  certain  areas producing  inferior quality  wine. 
Fruit_ and vegetables 
(i) Ban on any  measure  designed to  encourage  directly  or indirectly  the 
establishment or extension of apple,  pear or peach orchards; 
(ii) Encouragement  for the conversion of apple,  pear and peach orchards 
to varieties  of these  fruit which do not present any marketing 
difficulties. 
The Commission  and the  Member  States should be able to  assist  the applicant 
countries,  at their request, with the adoption of the  Community  machinery 
and legislation. 

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C. Financial  and b'udgetar^  ^sjsi^tance 
In the context  of its proposals regarding  certain  pre—accession 
commitments  on the part  of the applicant countries, the  Commission 
suggested in the inventory  of problems  connected with  enlargement  that 
increased  financial  and budgetary  assistance  be provided,  primarily  in 
order to help the applicant countries  meet their commitments  by 
speeding up the process  of adjusting and  diversifying  their economies. 
Present  situation 
The Commission  would  first of all draw attention to the scale  of the 
grants and loans accorded  to the two applicant countries to help 
prepare them for accession, and to  their requests for the operations 
in question to  be continued  up to accession. 
(a) In the  case of Portugal, the pre-accession aid accorded in  1981 
consists of 150  million ECU in the form of loans from the EIB and 
125 million ECU in the form of grants from the Community  budget, 
including  25 million ECU for interest  rate subsidies.  In 
September  1982 Portugal  asked that the EIB aid  be extended  for  1983, 
following  the exhaustion  of the resources  allocated  under the  1981 
agreement.  The Commission  agreed to this request and  proposed  that 
the Council ask the EIB to  make loans of up  to 150 million ECU 
available  to Portugal in  1983 1 
When making  its request in  September  1982 for the continuation of the 
financial  aid, Portugal also stated that there  were grounds  for 
maintaining the favourable  terms for loans  from the Bank and proposed 
to return to the matter  of interest  rate subsidies  at the appropriate 
time. In  this connection the  Commission  intends to present proposals: 
1. when it has received  more precise  details  from the Portuguese 
authorities; 
. 1C0M(82)845  final. 

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2. in the  light of the discussions within  the Community  and with the 
applicant  countries  on the inventory  of problems  connected with 
enlargement. 
(b) In the  case of Spain, financial  cooperation authorized  in  1981 in 
the form of EIB  loans covers  a maximum  amount of 200  million  ECU, it 
being understood that actual  commitments  would not exceed  100 million ECU 
in any period of twelve consecutive  months. 
Early in February  1983» Spain asked  for an extension  of the  financial 
cooperation.  The Commission  has not yet  taken a decision  on this 
request,  which relates  to a credit volume of around  25O million ECU 
for each twelve-month  period,  starting  on 1 July  1983. 
Prop£sals 
Portugal 
(a) Volume of loans 
By comparison  with the scale of the loans granted  as pre—accession  aid 
(150 million  ECU, which was used in  1981, 1982  and the  first quarter  of 
1983), the amount involved  in Portugal's raquest  of September  1982 
The Ccssissicn  considers  the sum of 150 million  ECU p.a.  compatible with 
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grants chargeable  to the  budget arc comparable  to projects financed  by 
loans from the Bank. 

9 
In view of this, and pending  further discussion with Portugal on 
production sectors in  which the reciprocal  pre—accession  commitment 
could apply pursuant to the  December  European  Council  mandate,  the 
Commission  is amending  its proposal of  17 December  1982 (COM(82)  845 
final) and proposing the  temporary  continuation of the present  level 
of aid (averaging c.  75 mn ECU p.a.)  updated  to allow for  inflation, 
while reserving the  right to propose  higher  levels  of aid (up to 
150 mn ECU) with  interest  subsidization  once the pre-accession 
commitments  are established. 
(b) Fields  of operation 
The Commission  proposes  that the  same fields  of operation be  adopted 
as under the  1981 pre-accession  agreement.  The agreement  provides 
for examination of the  admissibility  of projects, in the  case of 
unsubsidized loans, in  accordance  with the  arrangements  and conditions 
stipulated  by the Statute of the EIB. 
The Commission  might feel it necessary to  re-examine  the question of 
fields of operation in the  light of the content and  scope of 
pre-accession  commitments. 
Spain 
(a) Volume  of loans 
As with Portugal,  until it has gone further  into the fields of  application 
of the reciprocal  pre-accession  commitments  the Commission  can only 
propose  the temporary  continuation of the  level of financial  cooperation 
(see p.  8, (b)) updated  to allow for  inflation,  reserving the  right to 
put forward proposals  later for higher  levels  of aid. 

10 
(b) Fields of operation 
The priority  areas adopted  hithertho, could be maintained,  namely 
regional  infrastructure and infrastructure  relating  to communications 
with the  Community,  the restructuring and modernization of small 
businesses, and  energy  saving. 
The Commission  might feel it necessary to  re—examine  the question of 
the fields  of operation in the  light of the content and  scope of 
pre-accession  commitments. 
Final remarks 
The foregoing  Commission  guidelines for the extension of  total financial 
assistance  to the two applicant countries at present involve an  annual 
amount of around  175 nn ECU,  updated.  Adoption by the  Community  of this 
amount would necessitate  raising  the ceiling  laid down by the EIB for 
loans outside the  Community,  and a decision to  this effect  will have 
to be endorsed  by the Board of Governors  of the Bank. The current 
practice  of fixing  an absolute  ceiling  for loans on a country basis 
could be replaced by the establishment of an  annual  indicative  rate, 
which could be subject to review so as to  make the system more flexible. 
The question of  budget  aid unconnected  with loans involves a  political 
decision  and depends  on the negotiations with the applicant countries. 
An approach  tc this question  will have to take  into account  the vcin­
different  standards of  living  in Spain and Portugal.