24. 4. 89 Official Journal of the European Communities No C 102/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the proposal for a Council Decision empowering the Commission to borrow 
under the New Community Instrument to stabilize the level of debt outstanding for the 
purpose of promoting investment within the Community (l) 
(89/C 102/01) 
On 14 December 1988 the Council decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Economic, Financial and Monetary Questions, which was responsible for 
preparing the Committee's work on the subject, adopted its Opinion on 7 February 1989. 
The rapporteur was Mr Drago. 
At its 263rd plenary session (meeting of 22 February 1989, the Economic and Social Committee 
unanimously adopted the following Opinion. 
1. General comments 
1.1. In endorsing the proposal, the Committee is 
pleased to note that the new Decision incorporates 
certain key principles and objectives proposed in earlier 
Committee Opinions on the New Community Instru­
ment (NCI). 
1.2. Prolonged use of the NCI, targeted on priority 
Community objectives and now backed by 'parallel 
action' from the European Investment Bank using its 
own resources, has provided significant help for the 
investment schemes of small firms in a variety of manu­
facturing sectors. 
1.3. Assistance for small firms under NCI IV—which 
has cost the Community budget nothing—has been 
pooled together with the other financial instruments 
to support the cooperative growth strategy for more 
employment and extend the economic opportunities 
and development potential of small businesses. The Committee therefore welcomes the fact that small 
firms will continue to have general priority for NCI 
loans. It also endorses the introduction of new comp­
lementary objectives and a new method. 
1.4. The Committee endorses the extension of the 
NCI to cover the safeguarding of rural areas and helping 
small firms with innovation and new technologies. 
The need to safeguard rural areas should be met by 
supporting all activities which, by diversifying the econ­
omies of rural areas throughout the Community, boost 
employment and regional product in a way which 
should also be beneficial for environment protection. 
Support should therefore be extended to individual 
entrepreneurs, cooperatives, and associations of small 
firms (including craftsmen) engaged in agriculture and 
its various subsectors (including tourism), as well as to 
economic initiatives by workers made redundant by 
rationalization or restructuring. 
(]) OJ No C 335, 30. 12. 1988, p. 8. 1.5. The Committee also approves the fact that NCI 
financing for technology and innovation is to include 
No C 102/2 Official Journal of the European Communities 24. 4. 89 
loans for a wide range of materials and products, as 
well as the financing of specific applications of research 
findings. 
The assistance complements that granted under individ­
ual Community programmes over an extended period, 
and justifies the decision to accept educational and 
training costs as intangible investments. 
1.6. The Committee supports the change of method, 
making the NCI a 'revolving fund' empowered to bor­
row and lend up to a ceiling formed by the amount of 
debt outstanding. 
This ceiling—currently 5 865 million ECU—will allow 
new borrowings ranging from 500 million to 1 000 
million ECU per year. As a result the Commission will 
no longer have to apply for renewed authorization and 
will be able to meet further requests. 
The Committee considers that the Council's powers of 
information and monitoring are adequately guaranteed. 
However, the Committee should receive the same infor­
mation as the European Parliament and, after three 
years, should also receive the Commission report and 
any new guidelines. 
1.7. The Committee endorses the use of global loans, 
and agrees that the presence of intermediaries offers a 
useful guarantee which can encourage the use of finan­
cial engineering techniques. However, it feels that the 
interaction between the use of the 'rural' NCI and 
the Community structural funds is not defined clearly 
enough. 
Done at Brussels, 22 February 1989. 1.8. Furthermore, given the important role which 
cooperatives and other similar associations play in the 
expansion of small firms and craft businesses, the Com­
mittee asks the Commission to consider the potential 
for extending the role of bodies like the Italian consorzi 
fidi and consorzi di garanzia (associations of small firms 
who provide mutual guarantees for loans taken out 
by their members) in connection with the role of the 
financial intermediaries in the provision of global loans. 
Lastly, the Committee asks the Commission to see that 
the financial intermediaries always highlight the fact 
that their loan operations involve the NCI, thus helping 
to spread awareness of this instrument. 
2. Specific comments 
2.1. Article 2 
On the question of 'the priorities to be applied', the 
Committee asks the Commission to make an explicit 
reference here to the procedure outlined in Article 9. 
The Committee also requests the deletion of the words 
'where appropriate' in the second paragraph. This 
expression is inconsistent with the objectives, letter and 
spirit of the proposal. 
2.2. Article 6 
Although the formulation of the final paragraph is 
correct from the viewpoint of respect for Member 
States' monetary policies, it might appear inconsistent 
with the general Community interest and with the spirit 
of liberalization of the capital market. 
The Committee suggests that the Commission redraft 
this paragraph. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE