ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(75)410
Vol.1975/0158

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(75)410 final
Brussels ,23July 1975
r
PROPOSAL FOR AREGULATION
SETTING UPAFINANCIAL MECHANISM
(submitted bytheCommission t«theCouncil ;
COM(75 )410final

PROPOSAL FDRAREGULATION
settingupafinancialmechanism
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle235thereof;
HavingregardtotheproposalfromtheCommission ;
HavingregardtotheOpinionoftheEuropeanParliament ;
Whereasconditionsincompatible withtheproperfunctioningoftheCommunity
couldarisefromtheeconomyofaMemberState's"beingobliged,whenina
specialsituation,tobearadisproportionate burdeninthefinancingof
theCommunitybudget;
Whereas,inaccordancewiththeguidelineslaiddownbytheHeadsofGovernment
atParison10December1974andfurtherdevelopedbytheminDublinon10
and11March1975»suchconditionsshouldbepreventedfromarisingduringthe
processofconvergenceoftheeconomiesoftheMemberStatesbyprovidingfor
apaymentfromthebudgetoftheCommunitiestotheMemberStateinquestion;
WhereastheTreatydoesnotprovidespeoifiopowersforcreatingsucha
mechanism;whereasArticle235mustthereforebeusedforthispurpose;
HASADOPTEDTHISREGULATION :

Article1
Afinancialmechanismisherebysetup,undertheconditionssetout
below,consistinginpaymentsfromthebudgetoftheCommunitiestoMember
Statesinaspecialeconomicsituationwhoseeconomiesbearadisproportionate
burdeninthefinancingofthatbudget.
Article2
Uponapplication fromaMemberState,submittednotlaterthan
30Junewithastatementofreasons,theCommissionshallassessthefacts
ofthesituationhavingestablishedthatallthefollowingcriteriawould
bemet:
(a)thepercapitagrossdomesticproduct(GDP)intheMemberStatein
questionislessthan85i°oftheaveragepercapitaGDPinthe
Community ;
(b)therateofgrowthofpercapitaGDPinrealtermsislessthan120$
oftheaveragerateintheCommunity ;
(0)thepaymentsbytheMemberStatetotheCommunityforthecurrent
financialyear,pursuanttotheDecisionof21April1970onthe
replacementofFinancialContributions fromMemberStatesbythe
Community'sOwnResources,^exceedbymorethantenpercent(10%)
theamountwhichitwouldhavetopayifthebudgetoftheCommunities
wasfinancedbytheMemberStatesbyreferencetotheshareoftheir
GDPinthetotalGDPoftheMemberStatesinthesamefinancialyear.
Thefiguresreferredtoin(a)and(b)shallbecalculated,asmoving
averages,fromtheresultsforthepreviousthreeyears.
Thecalculations providedforinthisArtioleshallbemadeusing
currentmarketexchangerates.
1OJNoL94,28April1970,p.19-

-3-
Article3
WhentheCommissionhasassessedthefactsofthesituation,it
shall,ifnecessary,enterinanappropriatesubdivisionofthe"budget
fortheyearfollowingtheyearinwhichtheMemberState'sapplication
wasmadeanappropriation totheamountoftheprovisional payment,
calculated asfollows:
(a)theexcessamountcalculatedasprovidedinArticle2(c)shall"be
dividedintostepseachequaltofivepercent(5$)oftheamount
referredtoinArtiole2(c)infine:
(b)asapercentageofeachstep,thepaymentshallhegraduatedas
follows:
Step Percentage payment
from0to5$ nil
from5.0001$to10$ 50$
from10.0001$to15$ . 60$
from15.0001$to20$ 70$
from20.0001$to25$ 80$
from25.0001$to30$ 90$
above30$ 100$
(c)innocircumstances maythepaymentexceedeither:
(i)thenettransfersmade"bytheMemberStateinquestion
duringthecurrentfinancialyearunderArticle38ofthe
FinancialRegulationof25April1973»*notallowingfor
paymentsmadetothatStateunderthisRegulation,
(ii)or:thetotalpaymentsmadebythatStatetothebudgetof
theCommunitiesforthecurrentfinancialyearinrespectof
VATorpursuanttoArtiole4(2)and(3)oftheDecisionof
21April1970,whicheveristheless.
1OJNoL116,1May1973,p.l

Article4
WherethecurrentaccountofthebalanoeofpaymentsoftheMember
Stateinquestion,calculatedfromamovingaverageofthethreeyears
precedingthecurrentfinancialyear,.atcurrentmarketexchangerates,
showsasurplus,theamountsto"bereferredtoinrespectofthecurrent
financialyearforcalculatingtheexcessamountreferredtoinArticle2(c)
forthepurposesofimplementing Artiole3shall "bereplacedrespectively "by:
-thepaymentsmadebytheMemberStatetotheCommunityinrespectofVAT
orpursuanttoArticle4(2)and(3)oftheDecisionof21April1970;
t
-theamountwhichthatStatewouldhavehadtopayonthebasisofthe
proportionofitsODPinthetotalGDPoftheMemberStatetofinance
thepartofthebudgetnotcoveredbytheOwnResourcesreferredtoin
Article2oftheDecisionof21April1970.
Article5
Thepayments,calculatedatcurrentmarketexchangerates,shallbe
convertedintothebudgetaryunitofaooountinforce.
Article6
Thetotalamountofthepaymentswhichmaybegrantedinrespectof
agivenfinancialyearshallnotexceedthreepercent(3%)ofthetotal
expenditurechargeabletothatfinancialyearunderArticle17of
RegulationNo2/71of2January1971implementingtheDeoisionof21April
1970ortwohundredandfiftymillionunitsofaccount,whicheveris
thegreater.
1OJNoL3»5January1971»p.l

Shouldthetotalpaymentscalculatedaslaiddownmthis
Regulationexceedtheabovelimit,thepaymentsshallbereduced
proportionately .
Article7
AttherequestoftheMemberStateconcerned,a75f°advanceagainst
theprovisional paymentshallbemadeatthebeginningoftheyear
followingtheyearoftheapplication.
Aftertheaccountforrevenueandexpenditure hasbeendrawnup,
andoncefinalfiguresforthedatareferredtointhisRegulationare
available)theCommissionshall,onthebasisofthosefigures,calculate
thefinalamountofthepaymentandmakeanyadjustmentsnecessary.
Article8
WhereaMemberStatehasreceivedpaymentsunderthisRegulationfor
threeconsecutiveyears,theCommissionshallundertakeaspecialexamination
ofthesituationofthatStateandshalltakeallsuitablestepsreflecting
Communitysolidarity,onthebasisofitsassessmentoftheconvergenceof
economicsituationsandpolicies.
Article9
GrossdomesticproduotforthepurposesofthisRegulationshallbe
definedbyreferencetotheEuropeanSystemofIntegratedEconomioAccounts.
ForthepurposesofArticle4thecurrentaccountofthebalanceof
paymentsshallbetakentocovergoods,servicesandunrequiredtransfers
asdefinedbytheStatisticalOfficeoftheEuropeanCommunities.
Artide10
ThisRegulationshallenterintoforceon1January1976*Itshallbe
applicableforatrialperiodofsevenyears.Notlaterthantheendofthe
sixthyear,theCommissionshallreporttotheCounoilontheapplicationof
thefinancialmechanismandifnecessarymakeappropriateproposals.

ThisRegulationshallbebindinginitsentiretyanddirectly -
applicableinallMemberStates.
BoneatBrussels,