ARCHIVES HISTORIQUES
DELACOMMISSION
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DOCUMENTS "COM"
COM(79)587
Vol.1979/0202

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OFTHEEUROPEAN COMMUNITIES
COM(79)587 final
Brussels.5thNovember 1979
COMMISSION COMMUNICATION TOTHECOUNCIL
ONEXPEDITED IMPLEMENTATION OFTHEFINANCIAL
PROTOCOL BETWEENTHECOMMUNITY ANDPORTUGAL
v</
P:
V
COM(79)587final

Commission Communication totheCouncil
onexpedited implementation oftheFinancial Protocol
between theCommunity andPortugal
1.Todate ,theCommunity hasundertaken twofinancial support operations to
assist Portugal tocope with necessary restructuring andeconomic andsocial
development :these operations were theemergency financial aidgranted in
1975^tosupport Portugal 'sefforts tomodernize itseconomic structures and
theFinancial Protocol negotiated in1976 totake over from theemergency aid
in1978 .
2.TheFinancial Protocol with Portugal wasconcluded foraperiod offive
years from itsentry into force ,even though foralmost alltheprotocols
with theMediterranean countries that were negotiated atthesame time (Maghreb )
,orsubsequently (Mashreq ,Israel )aless distant scheduled completion date
wasset ,namely 31October I98I .Itwasforthat reason that Portugal requested
during thenegotiations ontheFinancial Protocpl that itshould receive as
substantial aspossible aproportion ofthevolume offinancial aidduring
theearly years oftheProtocol 'sapplication .Inanexchange ofletters
dated 17September 1976 ,theCommunity Delegation hadreplied that aneffort
would bemade tomeet this request .
Thedelay intheratification ofthese Financial Protocols bytheCommunity meant
that they entered into force oneyear later than (planned ,postponing thecompletion
date inPortugal 'scase to31October 1983 .
3.Atthemeeting oftheEEC–Portugal Joint Committe on23January this year >
thePortuguese Delegation reminded theCommunity oftheobjectives setfor
financial cooperation during the1976 negotiations andrequested that all
thefunds under theProtocol should bemade available toPortugal before
31October I98I inthesame wayasforother countries with which theCommunity
hasconcluded financial protocols .
EIBloan of150million EUAwith a2>Jointerest rate subsidy (30million EUA).
^EIBloanof200million EUAincluding 150million EUAwitha3$interest rate
(30million EUA).

-2-
Insupport ofitsrequest ,thePortuguese Delegation stressed theinvestment
that wasneeded inorder tomake Portugal more prepared foraccession and
tofacilitate theadaptation ofitseconomic structures with aview to >
Portugal 'sintegration into theCommunity .
I , _ '
1 "1 - , ' ' ( •-
4.Some ofthedelay inratification referred toabove hasbeen made upby
,Portugal 'srapid andcomprehensive presentation ofinvestment projetsto the
European Investment Bank .TheEIBhasalready been able tosign contracts
involving 81million EUA ,andprojects worth 40inillion EUAarescheduled
forconclusion bytheendofthis year orearly in1980 .Asregards the .
balance of79million EUA ,Portugal hasalready indicated sixprojects which
theEIBwill beable tosubject totechnical examination inthenear future
' (seeAnnex I).
1 v
Asregards theavailability offunds forinterest rate subsidies theCommission
proposals already envisage making 30 ,million EUAavailable totheElBduring
theyears 1979/1980/1981 .(*)
5.Atthetechnical andfinancial levels ,there "does notappear tobeany '
particular obstacle toexpedited implementation oftheFinancial Protocol
with Portugal .
Insofar astheterms oftheProtocol itself isconcerned ,Articles 2and 3
provided foraperiod ofapplication offive years from thedate ofentry
into force (i.e. from 1November 1978 "to31October 1983 )andstipulate
that theamounts tobecommitted each year must bedistributed asevenly as
possible throughout theperiod ofapplication oftheProtocol .TheCommission
considers ,however ,that these provisions donotrepresent anobstacle to
faster orslower implementation fortechnical reasons orfor economic and
political motives .
Anumber offactors have arisen since thesigning oftheProtocol yith Portugal
which argue infavour ofitsexpedited implementation . .
•••i■■•
(*)Inthefirst draft ofthebudget for1980 ,theCommission hadproposed the
,inscription of12MUA (instead of6MUA asretained for1978 and1979 )in
order that only 6MUAwould remain forthe1981 budget .TheCouncil ,however ,
atitsfirst examination decided toinscrive only 9MUAinstead ofMMUA

-3-
Firstly,thereisthedelayintheentryintoforceoftheProtocol,whichhas
accentuated ,thedifferenceinthetreatmentgiventoPortugalcomparedwith
theMediterranean countries.Secondly,accountshould "betakenofPortugal's
currenteconomicsituation,inwhichthereislittlepropensitytoinvest
andCommunityactionisallthemorenecessary.'Lastly,since1977relations
withPortugalhavehadto"beviewedinthecontextofitsintegrationinto.
theCommunity,whichimpliesthatjointpreparations haveto"becarriedout
withoutdelay.
6.TheCommissionthereforeproposestotheCouncilthatapplication ofthe
FinancialProtocolwithPortugalheexpedited..Tothatend,theEuropean
InvestmentBank'smanagementofinvestments underthisProtocolshouldhe
carriedoutinsuchawaythatthetotalsumiscommitted "by31-October1981
atthelatest.TheCouncilshouldthussendalettertothiseffecttothe-
EuropeanInvestmentBank.AdraftofthisletterwillhefoundinAnnexII
tothisCommunications -

[Annex1
IMPLEMENTATION OFTHEFINANCIAL PROTOCOLBETWEENTHECOMMUNITYffl)PORTUGAL
1.Loanssigned .' MillionEUA
Non-subsidized loantothefirmCimentosdePortugal^s"'
toincreaseproductioncapacityatSouselas 10
Non-subsidized loantothefirm^aimigalforthe
productionofmaterialsusedinthemanufacture
ofreinforcedplasticandpolyurethane products
atBarreiro ',, .„ 8
Non-subsidized loantothefirmQuimigalforthe
-replacement ofplantproducingammoniaandnitrio
•/.acidforthemanufactureoffertilizers 17
Subsidizedloanforelectricity transmission ,
(SetubalII) . 20
Globalsubsidizedloanforsmallandmedium-sized
industriesandtourismprojects .15
1;Subsidizedloanfortheimprovementoftheair
safetyinstallations atMadeiraairport 11
' ■■81
2.Loansscheduledforsigning
Non-subsidized loan(No2)toincreasecement;-'< 1
productionatSouselas -,15
LoanfortheimprovementoftheportofAveiro 25
, - ■,i ■ ■ ,
3.ProjectsunderexaminationattheEuropeanInvestmentBank„
GeneralDepositsFund(credit-forsmallandmedium-sized ,
enterprisesandtourism) _."
-ThePortugueseelectricity company "< '
MadeiraAirport r
LisbonAirport
IrrigationinVillafranca
NationalDevelopment BankIV(creditforsmalland
medium-sizedenterprisesandtourism)
'' • ' '
Total200millionEUA

AnnexII
letterfrostheCounciltotheEuropeanInvestmentBank^
TheFinancialProtocolwithPortugalprovidesfortheestablishment offinancial
cooperation overaperiodoffiveyearsfromitsentryintoforceandstipulates
thattheamountsto"becommittedeachyearmust"bedistributedasevenlyas
possiblethroughouttheperiodofapplication.
Ihave"thehonourtoinformyouthatinordertoassistPortugalinitsefforts
toadaptitseconomy,particularly withaviewtoitsaccession "totheCommunities ,
theCouncilhasagreed,onarecommendation fromtheCommission,torequestthe
EuropeanInvestmentBanktotakethenecessarystepstoexpediteimplementation
oftheFinancialProtocolsothatallthefundscanbecommittedbefore
31October1981.

FICHEFINANCIERE
Enjuin1976,LorsdeLarédactiondeLaproposition deLaCommission
auConseiLconcernant LeprotocoLefinancieravecLePortugaL,aucune
fichefinancièren'aétéétabLie(COM(76)349finaldu30.6.1976)
L-'accéLération proposéeci-avantnecomporteraaucunemodification
budgétaire.Eneffet,encequiconcerneLes30MioUCdebonifications
d'intérêts : -
.'6MioUContétéinscritsaubudgetde1978;
.6MioUC,ontétéinscritsau-budgetde1979;
.12MioUContétéinscritsaubudgetde1980.
CommedéjàprévudansLesprévisionsfinancières'triennaLesdeLa
Commission,i-Lresteraàinscrire6MioUCaubudgetde1981.