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Vol.1982/0231

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)767 final
Brussels,17November1982
COMPENSATION FORTHEUNITEDKINGDOM:THESUBSEQUENT SOLUTION
(Communication fromtheCommission totheCouncil)
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Vti
CcmpensationfortheUnitedKingdom:thesubsequentsolution
Communication fromtheCommission totheCouncil
I.Paragraph 7oftheConclusions oftheForeignAffairs
Ministers oncompensation fortheUnitedKingdomfor1982states:
"TheMinisters undertaketotakeadecisionbeforetheendof
November1982onthesubsequentsolution".Thepresent
communication setsouttheCommission'sbasicapproachfor
thissubsequent solution.
II.TheCommission recognisesthatthereasonswhich
ledtothebudgetaryarrangements of1980and1982infavour
oftheUnitedKingdomwillcontinuetoexistafter1982.
Itbelieves,asitstatedinitsMandateReport,thatthis
problemshouldberesolvedinthelongrunbythedevelopment
ofCommunitypoliciesinthenon-agricultural fieldwhich
wouldintroduce abetterbalanceofexpenditure intothe
Community'sBudget.IntheMandateReporttheCommission
madeproposalsforsuchpolicies,includingforexample,
forthesubstantial development oftheRegionalFund.
TheCommissionbelievesthatinanyeventitisimportant
thattheprocessofdeveloping newpolicieswhichtheMandate
Reportsetinactionshouldcontinue.Itshouldbepushed
aheadinitsownrightandintheinterestoftheCommunity
asawhole.

-2-
Asacomplement toitsproposalsintheMandateReporton
theexpenditure sideoftheBudget,theCommission nowintends
toconductathoroughreviewoftheCommunity'sfinancing
system.Thistooisa.matterofgeneralCommunityinterestandshouldbe
conductedonthatbasis.InthelightofthisreviewtheCommissionwill,
inthespringof1983,presentproposalsdesignedto:
a)providetheCommunitywiththenecessary resources
andwith"thenecessaryfinancialflexibility and
autonomytorespondtotheincreasing budgetary
demandsofitspolicies;
b)developtheCommunity'sfinancing systeminsuch
awayastostimulatethefurtherdevelopment
ofthesepolicies;
c)establish afinancial framework whichallows
9
enlargement bySpainandPortugaltotakeplace
withoutprejudicetotheacquiscommunautai re
asitnowexistsandastheCommission hasproposed
itshouldbedevelopedinthecontextofenlargement ;
d)reinforcetheCommunity'sinternalcohesionand
solidarity .
Itiswithinthecontextofthisnewfinancing system,and
thedevelopment ofCommunitypolicieswhichitshouldgenerate,
thattheBritishbudgetaryproblemmusteventually beresolved.
III.Meanwhile,untiltheprocessofdeveloping theCommunity's
Budgetyieldstangibleresults,thetimingofwhichislikely
inpracticetocoincidewiththatoftheCommunity'sthird
enlargement ,theCommission proposes,inthelightofthe
conclusions ofForeignMinistersregardingthe1982solution,
afurtherinterimadhocarrangement fortheUnitedKingdom.

-3-
Suchanarrangement shouldbeprovidedonthebasiscfa
newagreementattheCommunity Level.Itshouldcover
aperiodoftwoyears(1983and1984).Inthelightofthe
developments intheCommunityreferredtoaboveitcould
beextendedtoathirdyear(1985).Inthiscase,the
arrangement forthethirdyearshouldfollowthesame
principles asthatfor1983and1984.
Thearrangement mustalsotakeintoaccountparagraph 2ofthe
conclusions oftheForeignAffairsMinisters about
corrections tobemade.
Thearrangement shouldbebasedonasimplesystem.Inits
MandateReporttheCommission proposed amechanism whichdirectly
reflectedtheproblemofthelowleveloftheUnitedKingdom's
receiptsfromEAGGFGuaranteeexpenditure .TheCouncilwas
howevernotdisposedtofollowthisapproach.Hencethis
interimarrangement isbasedontheunderstanding that,as
inpreviousyears,theUnitedKingdom'scontribution tothe
CommunityBudgetwillbereducedbythefinancingthroughthe
CommunityBudgetofabasiccompensation totheUnited
Kingdom,plusarisk-sharing adjustment .
Morepreciselythearrangement shouldintheCommission's
viewcontainthefollowingelementsrelatingtoeachofthe
yearsinquestion:
a)asbasereference afigureonthecontribution
oftheUnitedKingdom;
b)inrespectofthisbasereferencefigure,anamount
ofcompensation whichtakesaccountofcorrections
tobemadefor1980and1981inthelightofthe
actualfigures;

-4-
c)arisk-sharing adjustmcnt(upwardsanddownwards )
intheeventthattheactualfigureturnsout
tobesignificantly different fromthebase
reference;
d)thelevelofappropriations tobeenteredinthe
Community Budgetinordertoimplementthis
compensation .
IV.Inaccordance withparagraph 2oftheconclusions
oftheForeignAffairsCouncilof26October1982,"corrections
tobemadefor1980and1981inthelightoftheactualfigures
willbetakenintoaccountwhennegotiating thesubsequent
solution".
Asimplecomparison betweenthefigurescontainedinthe
30May1980agreement andtheactualfiguresdoesnotprovide
anysingleorclearbasisfordetermining thepossiblemagnitude
ofthesecorrections .Thisappreciation isapolitical,
notalegalone.
Infact,ifontheonehandthe1980agreement hasbeen
carriedoutinstrictaccordance withitstext,
ontheotherhandithasnothadthegenerally
expectedoutcomethattheUnitedKingdom,after
compensation ,wouldstillsustainacertainlevelof
contribution .
./.

TheCommission wouldpreferthattheCouncilshould
firstenterintoadiscussionofthemethodofafurther
compensatory arrangement fortheUnitedKingdom,andthen
dealsimultaneously withthelevelofsuchcompensation and
thelevelofthecorrections tobeappliedtoit.The
Commission hopesthat,atanappropriate moment,anoverall
settlement,encompassing bothelements,couldbereached
onthebasisofapoliticalunderstanding acceptableto
allMemberStates.TheCommission mayinduecourse
provideareasonedviewonwhatconstitutes afairoverall
levelofcompensation inthelightofboththeseelements.
V.Insomerespectsthereforethefurtherinterimarrange­
mentinfavouroftheUnitedKingdomwouldfollowthepattern
oftheagreements of1980and1982.ButtheCommission
believesthatitshouldbeeffectedinaformcorresponding
morecloselytotrueCommunitypolicies.
VI.Inmakingthesesuggestions ,theCommission isconscious
ofthecriticisms whichhavebeenexpressed,notleastby
theEuropeanParliament,ofthesystemofspecialmeasures
established undertheagreementsfortheyears1980to1982
whosegenuineCommunitycharacter hassometimesbeenquestioned .

-6-
Forthisreason,theCommission isoftheview
thatthisfurtherinterimarrangement shouldhelppromote
thedevelopment oftrueCommunitypolicies .TheCommission
wouldnotliketoseeanyfurtherprolongation beyondthe
presentproposedarrangement ofadhocsolutionsofthis
kind.ButthismeansthattheCommunity mustmakemore
strenuouseffortstodevelop awiderarrayofpoliciesat
theCommunitylevelandmustbepreparedtodiversify and
extenditsfinancing systemalongthelinesdescribed
inparagraphIIabove.