ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(75)436
Vol.1975/0167

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(75)436 final
Brussels ,23July 1975
COMMISSION COMMUNICATION TOTHE COUNCIL
onthenegotiation ofanewFinancial
Protocol with Greece
I _ ; .
''// •')• ';-
. •' \
COMC75 )H36 final

Introductory Memo
ThepurposeofthisCommissioncommunication istheadoption
bytheCouncilofnegotiatingdirectivesfortheconclusionofaFinan­
cialProtocolwithGreecefollowingtheCommunitydecisiontoreactivate
theAssociation ,whichwascommunicated totheGreekGovernmentinthe
autumnof1974*Giventhis"background,thecommunication isoutside
thestudyofGreece'sofficialapplicationforaccessionof12June,1975
butisinlinewiththepolicyadoptedsincethefallofthedictatorship
inAthens.InanyeventtheCommissionconsidersthatthemannerin
whichtheGreekauthoritiesplantoallocatetheresourcesprovidedby
aidfromtheCommunityoritsMemberStatesisentirelyappropriatefor
thepurposeofsolvingtheproblemslinkedwiththeimplementation of
theharmonization ofagricultural policiesasforeseenintheAthens
Agreement.Intheeventofaccession,asdesiredbyGreece,before
thefinancialprotocolexpires,thequestionmightariseconcerning ,
anysumsnotusedbythetimeofaccession.However,thatwouldbe
atechnicalproblemwhichcoulddoubtlessbesolvedwithoutserious
difficultyinthenegotiations .

Commission communication totheCouncilonthe
negotiationofanewFinancialProtocolwithGreece
t
1.Immediately democracywasrestoredinGreecetheCommunityindicatedits
willingnesstoreactivatetheAssociation,whichhad"beenonicesince1962.
AccordinglyitinformedtheGreekGovernmentofitsreadinesstonegotiatea
newFinancialProtocol,fbrfinancialcooperation wasoneofthesectorswhere
therepercussions ofthefreezingoftheAssociation had"beenmostmarked,
withthedecision "bytheCommunitytosuspendapplicationoftheFinancial
Protocolinforceatthetimeofthecoup.
Actingonthisapproach "bytheCommunity,theCouncilofAssociation meeting
of2December1974decidedthatthenegotiations onfinancialcooperation
shouldstartatanearlydate*Itisinpreparationforthesenegotiations ,
whichshould"beginassoonaspossible,thattheCommissioniscommunicating
itsobservations andsuggestionstotheCouncil.
#If♦•

2.Inpreparationforthesenegotiations ,Greecehassubmittedtothe
Community'srequestsettingoutclearlythetotalamountaskedfor,whatthe
sumsinvolvedaretobeusedforandwheretheyaretocomefrom.
Thetotalamountwouldbe400millionu.a.,thefigureofficiallystatedat
theCouncilofAssociationmeetingof28AprilbytheHeadoftheGreek
Delegation ;hewas,moreover,onlyconfirmingtheindications givenatall
levels,fromtherepresentatives oftherelevantdepartmentsoftheAdministra­
tionrightthrough ,totheGreekGovernment.Thelatterhasinfactclearly .
expresseditspositiononthissubjectonanumberofoccasions,inparticular
viatheMinisterforEconomicCoordination .
The400millionu.a.wouldbegrantedforaperiodoffiveyears.Asumof
250millionu.a.wouldcomefromEIBloans(withthemaximumpossibleamount
onspecialterms,150millionu.a.beingearmarkedforagriculture)and
150millionu.a.wouldbeintheformofgrants' and
wouldbeusedtoreorganizeGreekagriculture byeliminatingcertaintypes
ofproductionorcertainqualitiesorvarietiesofproductswhichmightcause
disturbances ontheCommunitymarketorwhichcannotbemarketedunder
Communityregulations (theseareoperationsofatypenotnormallyfinanced
bytheEIB).
3.TheCommunitymustthereforeassessthisGreekrequestinthelightof
itsagreementinprinciple,communicatedtotheGreekGovernmenton3October
1974,totheconclusion ;withGreeceofanewFinancialProtocol,andonthe
basisofArticle2(2)(c)oftheAthensAgreementwhichlaysdownasan
objectiveoffinancialaid"themakingavailabletotheGreekeconomyof
resourceswhichwillassistittodevelopatahigherrate".
ToassesstheGreekrequest,theCommissionconsidersthatanumberoffactors
shouldbetakenintoaccount.Thereareeconomicfactors,naturally,butalso
politicalfactors,sincethesecondFinancialProtocolmustclearlyconstitute
enessential,ifnotfundamental,elementInthenormalization ofrelations

-3-
betweenGreeceand.theEEC.Thisistruewhateverthedirectiontobe
followedandtheobjectivetobeattainedinthenextfiveyears,which
istheproposed(andindeedtraditional)durationoftheFinancial
Protocol.
4.Ofthe250millionu.a.intheformofEIBloans,150million
u.a.wouldbedevotedtoGreekagriculture ,thatisforsoilimprovement
work(mainlyirrigationprojects).ThisisthefirsttimethatGreece
haslinkedtheFinancialProtocolwithagricultural policy.Theaimof
thisaidwouldbetohelpdiversifyGreekproduction,inparticularby
developingcropswhichtheCommunityisshortof,oneoftheprincipal
objectivesbeingtomaketheagricultural systemscomplementary rather
thancompetitive.InthiscontextitmustbeadmittedthatGreece's
needsareverygreatbutthatitisintheinterestsofboththeAssociat­
ionandtheCommunity .thatGreeceshouldbesuccessfulinthemeasures
itintendstotakeinthisfield.
Toappreciatetheseneeds,sufficeittorecallthattheGreek
publicinvestmentprogrammesprovideforworkinvolving400,000hectares
atanestimatedcostofapproximately 0413millionbetweennowand1980
-atcurrentpricesofcourse.Ifthepublicparticipation intheirri­
gationworkcarriedoutbytheprivatesectorisadded,thesuminvolved
isconsiderably higher,perhapsamountingtosome800millionu.a.,which
theGreekbudgetwillhavetobearbetweennowand1980.
TheCommissionthereforeconsidersthattheuseGreeceintends
tomakeofthebulkofEIBloansdeservestobeenoouragedbytheCommu­
nity.Asregardstheremaining100millionu.a.,whichGreeceplansto
allocatemainlytoinfrastructure projeotsinsectorsotherthanagricul­
ture,nospecialcommentiscalledfor.
5>InevaluatingtheamountinvolvedinthispartoftheGreek
requesttheCommissionconsidersthat,inadditiontothecountry's
economicneedsinthecontextoftheharmonization ofitsagricultural
policywiththatoftheCommunity,thefollowingfactorsshouldbetaken
intoconsideration :theamountcoveredbythefirstFinanoialProtocol
(0125millionofloansfromtheEIBequivalentto125-millionu.a.at
-4-

-4-
thattime,thatistosayfortheCommunityofSix);therateof
inflationsince1962;theenlargementoftheCommunity,andalso
-afactorthattheGreeksareboundtostress-thesevenyears
duringwhichtheAssociation wasonice,thusdeprivingGreeceof
financialaidfromtheCommunity.Itshouldbepointedout,more­
over,thattheCommunityofferforthesecondFinancialProtocol,
whichwasnegotiatedduring1967butwasunabletobeconcluded
beforethecoupd'etat,was100millionu.a.intheformofEIBloans;
thisamountwasnotacceptedbyGreece,however.
6.Moreover,intheframeworkofthisnegotiation ,theEEC
hadproposedaidintheformofagrantof20millionu.a.for
restructuring Greekagriculture .Thisofferwasnotacceptedby
Greeceeither.
Inrelationtothisitshouldberememberedthattherestruc­
turingofGreekagriculture ,theconversionofcertainlinesofproduct­
ion,andtheeliminationofcertainvarietiesareverycloselyboundup
withthesuccessoftheharmonization effortandconstitutetheessent­
ialtechnicalbasisforitssuccess.
Oneofthemainstumblingblocksinthenegotiations on
theharmonizationofagricultural policiesconductedduringthe
period1962-1967wasGreece'spositiononitsshareinthebenefits
ofthefinancingofthecommonagricultural policyanditsparticipat­
ioninthebodiesadministering theCAP,particularlytheEAGGP.Aware
oftheneedforsuccessinthecomingnegotiations andthefactthat
maintainingtheirpositiononthisquestion,wherethepoliticalimplicat­
ionsareverydelicate,wouldproducethesameresultsasin1967?the
Greekauthorities nowintendtodealwiththeeconomicproblemsthey
areconfrontedwithinthisfieldinthepragmaticwaysuggestedbythe
EECin1967,thatistosaybyrecoursetofinancialaidfromtheCommu­
nityaimedathelpingthefinancingofanagricultural guidanoefund-
Thisiswhythey
areaskingfor150millionu.a.,anamountoffinancingwhichcorres­
pondstotheirownassessmentoftheiragricultural requirements witha
viewtoharmonization withtheCommunity.
-5-

-5-
7.Sincethisobjectivewouldhelpconsiderably onthetechnical
leveltowardssolvingthedifficulties encounteredinthepastbetween
GreeceandtheCommunityintheagricultural sector-whichbothsides
fearmayrecurinthefuture-andwouldalsopreventpoliticaland
institutional disputes,itmust,intheCommission'sopinionbeshared
bytheCommunity.
8.Itisnownecessarytoconsidertheamountanticipatedfor
Greecefromaneconomicaswellaspoliticalpointofview.
ThesituationofGreekagricultureisbelowtheaverageforthe
variousregionsoftheCommunity(productivitybeingapproximately one
thirdandlandareaperfarmlessthanaquarteroftheCommunityaverage).
ItshouldalsobepointedoutthatGreece'seconomicsituationmeansthat
itcannotdevotethesameeffortsastheCommunities' countriestoimprov­
ingitsagriculturalstructures(percapitaGDPisapproximately 75$of
theaverageGDPfortheCommunity).OnthebasisoftheforegoingGreece
maybeputonaparwiththeCommunityregionsinwhichthegreatestefforts
needtobemadeasregardsstructures.
Politically }evenifthenegotiations relatingtothefinancial
protocolliewithintheprocessofAssociation ,itshouldnotbeforgot­
tenthattheAssociation agreementexpresslyopensuptheprospectof
accessionwhichGreecemoreoverofficiallyrequestedon12Junelast.
Thesefactorsjustifysignificantaid,withoutactuallyreaching
asmuchastheamountrequestedbyGreece,whichseemsexcessiveand
whichoughttobebroughtdownto120millionu.a.forthefiveyears
whichtheprotocolistocover.
9.WithregardtotheGreekrequestfordirectaccesstotheEIB
resources,arequestwhichconsistsofobtaining,inadditiontothe250
millionu.a.requestedinotherrespects,freeandundetermined access
toloansfromtheEIB,underconditionsaccordeduntilnowtotheMember
Statesalone,theCommissionconsidersthatsuchfacilitiescanbegranted
onlytoMemberStatesoftheCommunitysincetheyaloneareboundbythe
obligationswhichaccesstotheBank'sresourcesentail(inparticular
participation inthe^capital).

-6-
TheCommissionthereforeconsidersthatitisnotpossible
tomeettheGreekrequestonthispoint.
10.Onthequestionofinterestratesubsidies,Greecehasmade
itsrequestspecific.IfProtocolno.19annexedtotheAthens
Agreementistakenasaprecedent,two-thirdsoftheloanstobegrant­
edbytheEIBshouldqualifyforinterestratesubsidies.Onthebasis
oftheamountrequestedbyGreecethisoperationwouldinvolveacost
ofapproximately 33to41millionu.a.(assuming,asin1962,aninter­
estratesubsidyof3amortization over15'to20yearsandagrace
periodof3yearsasaverageterms).In1967theCommunityhadpro­
posedinterestratesubsidiesonaquarteroftheamountoffered.This
wouldreducetheabove"costbracket",againonthebasisoftheamount
requestedbyGreeceandofaninterestratesubsidyof3approxi­
mately12.5to15.5millionu.a.Althoughnodetailshavebeengiven
here,itseemsclearthatGreecedoesnotexpectthecostoftheinterest
ratesubsidiestobedeductedfromtheamountswhich,ifitsrequestis
met,willbebornebytheMemberStates.
11.Inconclusion,theCommissionwouldliketostresstheimport­
anceofthenegotiations onagricultural harmonization andtheFinancial
ProtocolwhicharetobeopenedwithGreeceverysoon,twoquestions
which,asappearsfromwhathaspreceded,areintimatelylinkedtogether.
Itisimportantthenegotiations becarefullypreparedandapproached
withanopen-minded andrealisticattitudeinviewofwhatisatstake.
ThatiswhytheCommissionconsidersthatitmustsuggesttheretention
oftheGreekplanfortheallotmentofthefundsgrantedintheframe­
workofthefinancialprotocolinasmuchastherequestisajudicious
oneintermsofitsobjectivesfromboththetechnical/economicand
political/institutional angles.
12.Asregardstheamounts,theCommissionsuggests:
-forEIBloans,alevelofbetween200and250millionu.a.
dependingonthepercentageofthesumwhichwouldqualifyforan
interestratesubsidy,therateofthatsubsidyanddependingupon
whetherornotthatsubsidyisappropriated fromtheoverallsum
agreedupon: -7-

-7-
-forthegrantsamongstwhichspecialloanswouldpossibly
"beincluded(takingintoaccountothefactorsmentionedaboveinpoint8)
anamountof120millionu.a.forthe5yearswhichtheprotocolisto
cover,•
AccordinglytheCommissionproposesthattheCounciladoptthe
recommendation foradecisionannexedtothiscommunication .
TheopinionoftheEuropeanInvestment Bank:shouldofcourse
besoughtbeforeanyfinaldecisionistakeninconnectionwiththe
drawingupoftheFinancialProtocol.

Recommendation foraDecisionof"theCouncilandofthe
Representatives oftheGovernments oftheMemberStates
meetinginCouncilonthenegotiation ofaNewFinancial
ProtocoltotheAgreementestablishing anAssociation
"betweentheEuropeanEconomicCommunityandGreece '
THECOUNCILOFTHEEUROPEAN COMMUNITIES ANDTHEREPRESENTATIVES OFTHE
GOVERNMENTS OFTHEMEMBERSTATESMEETINGINCOUNCIL.
/
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunityf
Havingregardtotherecommendation fromtheCommission;
Whereastheopeningofnegotiations fortheconclusionofanewFinancial
ProtocoltotheAgreementestablishing anAssociation "betweentheEuropean
EconomicCommunityandGreeceshould "beauthorized ;
,HAVEDECIDEDASFOLLOWS:
SoleArticle
TheCommissionisherebyauthorized,on"behalfoftheEuropeanEconomicCommunity
anditsMemberStates,toopennegotiations withGreecewithintheCouncilof
AssociationfortheconclusionofaFinancialProtocoltomakeresourcesavailable
totheGreekeconomyinordertofacilitateitsaccelerated development.
TheCommissionshallconductthesenegotiations inconsultation withthe
Representatives oftheMemberStatesandonthebasisoftheDirectives
annexedhereto*

ANNEX
1.TheCommissionshall,on"behalfoftheEuropeanEconomicCommunity
and.itsMemberStates,opennegotiations withGreecewithintheCouncil
ofAssociation fortheconclusionofaFinancialProtocoltomakeresour­
cesavailabletotheGreekeconoiqyinordertofacilitateitsaccelerated
development .
2.TheFinancialProtocolshallestablishtheprojectstobefinanced,
andthevariousforms,generaltermsanddetailsofthefinancialaidto
begrantedtothatcountrywithreferencetotheobjectivesoftheAthens
Agreement.
3.Thefinancialassistance wouldontheonehandtaketheformofEIB
loans,agreatpartofwhichcouldbedevotedtoinfrastructure projects
(especiallyinagriculture)andsupplementedwithinterestratesubsidies,
and,ontheotherhand,ofgrantstobeearmarkedforthereorganization
ofGreekagriculture ,inparticularwithaviewtomakingGreekandCommu­
nityproduction morecomplementary .