22.1.  76 Official  Journal  of the  European  Communities No C 15/11 
which  are drawn  up, 'in the fourth  quarter'  (Article  1 of the Proposal)  or 'on the third  Monday 
of November'  (Explanatory  Memorandum),  can  no  longer  have  any  useful  influence  on 
parliamentary  discussion  of the  budgets  in the  abovementioned  countries.  The  Commission 
proposal  is thus  at variance  with  Article  5 of the Council'  Decision  of 18 February  1974,  which 
lays down  that  account  should  be taken  of the 'guidelines'  in the parliamentary  discussion. 
The 15 October  deadline,  on which  the comments  in item  1.2 of the draft  opinion  are based,  is 
only  mentioned  in the  non-binding  explanatory  memorandum  preceding  the  Commission 
proposal  as a guide  for 1975. 
Voting: 
For: 7, against:  34, abstentions:  9. 
Opinion  on the annual  report  on the economic  situation  of the Community 
The text  referred  to the Committee  has not yet been  published  in the Official  Journal 
of the European  Communities. 
On 27 October  1975,  the Council  decided  to request  an opinion  of the Economic  and 
Social  Committee  on the above  report  according  to Article  4 of the Council  Decision 
of 18 February  1974  on the attainment  of a high  degree  of convergence  of the economic 
policies  of the Member  States  of the European  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
134th  plenary  session,  held  in Brussels  on 29 and 30 October  1975. 
The full  text of the opionion  is as follows: A. LEGAL  BASIS  FOR  THE  OPINION 
Having  regard  to Article  4 of the Council  Decision  of 
18 February  1974  on the attainment  of a high  degree 
of convergence  of the  economic  policies  of the 
Member  States  of the European  Community, THE  ECONOMIC  AND  SOCIAL  COMMITTEE, Having  regard  to the decision  taken  by the Bureau  of 
the Committee  on 24 June  1975  instructing  the 
Section  for  Economic  and  Financial  Questions  to 
draw  up an opinion  on the above  matter, 
Having  regard  to the  oral  report  made  by the 
Rapporteur,  Mr Margot,  and  the opinion  adopted  by 
the Section  at its meeting  on 22 October  1975, 
Having  regard  to the request  made  by the Council  of 
the European  Communities  on 27 October  1975  for an 
opinion  on the annual  report  of the Commission  on 
the economic  situation  of the Community, Having  regard  to the proceedings  of its 134th  plenary 
session  held  on 29 and  30 October  (meeting  of 30 
October), 
No C 15/12 Official  Journal  of the  European  Communities 22. 1. 76 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 57 votes  in favour,  24 against  and  15 abstentions: 
1. Preliminary  comments 
1.10.  Since  the  annual  report  on the  economic 
situation  of the  Community  was  only  received  a 
fortnight  before  the  Economic  and  Social  Com-
mittee's  Plenary  Session,  the Committee  did not have 
an opportunity  to study  it in depth.  This  opinion  was 
prepared  in the  light  of oral  statements  made  by 
Commission  representatives  and  was  updated 
following  a rapid  examination  of the report  itself. 
1.20.  The  annual  report  differs  somewhat  in 
layout  from  previous  reports. 
1.21.  In  the chapters  on the current  situation  and 
the outlook  for 1976,  the report  concentrates  on the 
Community's  situation  and  prospects.  The  explicit 
accounts  given  in the  past  of the  international 
context  and  the  international  outlook  have  been 
omitted. 
1.22.  In  view  of the international  scale  of current 
economic  problems,  it would  have  been  preferable  to 
have  continued  the  practice  of setting  out  the 
international  background  to  the  Community's 
problems. 
1.30.  The  Committee  has  only  considered  the 
general  guidelines  for economic  policy.  As far as the 
guidelines  for  the  individual  Member  States  are 
concerned,  it has not had  time  to form  an opinion  on 
the basis  of the  views  expressed  and  the  data 
available  in the Member  States. 
1.31.  The  Committee  refrains  from  commenting 
on the  recommendations  and  extremely  succinct 
assessments  made  in respect  of each  Member  State.  It 
notes,  however,  that  by and  large  the report  sets  out 
the broad  lines  of the  policies  pursued  by  the 
individual  governments.  These  policies,  incidentally, 
do not  have  unanimous  support  in the  respective 
countries,  and  they  form  the  subject  of discussions 
between  governments  and  representatives  of the two 
sides  of industry  and  the various  sections  of society. 
2. Scale  of the recession 
2.10.  The  annual  report  confirms  that  there  has 
been  a further  deterioration  in the level  of economic 
activity  in 1975.  The  picture  has continued  to be one of inflation  coupled  with  unemployment,  thus 
bearing  out  the  fears  expressed  in the  previous 
annual  report. 
2.20.  It  is stated  that  all  Member  States  find 
themselves  in more  or less  the same  situation.  But  it 
is emphasized  elsewhere  in the report  that  inflation 
rates  and  reductions  in exports  vary  considerably 
between  certain  Member  States.  For  example,  the 
annual  inflation  rate  ranged  from  6-5  % in West 
Germany  to 22-23  % in  the  United  Kingdom. 
Unemployment  is highest  in Ireland,  where  the 
budget  deficit  was  as high  as 16 % of GNP. 
2.21.  The  Committee  agrees  that  in the  last  few 
months  inflation  has  eased.  But  it nevertheless 
considers  that  the level  of inflation  is still  disquieting. 
2.22.  The  report  quite  rightly  emphasizes  the 
alarming  growth  in  unemployment,  and  draws 
attention  to the Member  States'  large  budget  deficits 
and the marked  drop  in real  GNP. 
2.23.  The  Committee  notes  that  there  is still  no 
convincing  sign  of  economic  recovery  in  the 
Community.  Orders  and  investments  are still  falling, 
while  there  has been  a marked  rise  in unemployment 
in the  Community  as a whole.  The  number  of 
unemployed  was  getting  on  for  five  million  in 
September;  many  of these  are  young  people.  There 
are also  fewer  immigrant  workers.  Generally 
speaking,  the  extent  of short-time  working  is not 
apparent  from  unemployment  figures.  This,  plus  the 
under-utilization  of productive  capacity  and  the  real 
reduction  in hours  worked,  suggest  that  an economic 
recovery  will  not  have  an immediate  impact  on 
employment. 
2.30.  The  recession  which  took  hold  in 1974,  and 
which  the  Commission's  annual  report  for  1974 
believed  would  pass  in the course  of 1975  is still  very 
much  with  us.  This  recession  has  led  to a rapid 
decline  in world  production  and  trade,  and  it is still 
hard  to say when  it will  end. 
2.31.  The  Committee  notes  that  in  most 
industrialized  countries  the economy  has stagnated  or 
gone  into  recession,  and  unemployment  has 
increased.  The  economic  situation  of the developing 
countries,  particularly  those  without  indigenous 
energy  sources,  has further  deteriorated. 
2.40.  Particular  concern  is felt  about  the fact  that 
signs  of economic  recovery  in the United  States  and 
Japan  have  not  been  enough  to restore  confidence. 
22.1.  76 Official  Journal  of the European  Communities No C 15/13 
The rise  in industrial  output  and  the  increased 
demand  for consumer  goods  in the United  States  has 
not had  much  effect  on the  — still  considerable  — 
level  of unemployment.  Although  a hefty  rise in GNP 
was initially  forecast  for  1975,  there  will  in fact 
probably  be a slight  fall  over  the  year  as a whole 
despite  the  recent  increase.  It also  looks  as if the 
inflation  rate  will  go up again.  The  recovery  appears 
to the Committee  much  more  clear-cut  in Japan,  but 
a revival  of the  Japanese  economy  will  have  little 
direct  impact  on the Community. 
2.50.  Regarding  balance-of-payments  problems,  it 
is noted  that  balances  of  payments  in  the 
industrialized  countries  are  moving  into  the  black, 
but any  surpluses  are generally  due  to the decline  in 
economic  activity,  the  fall-off  in demand  for 
petroleum  products  and  the  slump  in commodity 
prices.  On the other  hand,  developing  countries  have 
gone  even  further  into  the  red,  largely  because 
commodity  prices  have  fallen  and  demand  has 
weakened  in the industrialized  countries. 
2.60.  The  Committee  believes  that  the  present 
economic  trend  is determined  to a large  extent  by 
structural  difficulties  and  the  general  climate  of 
unease,  which  has  not  made  it any  easier  to analyse 
and assess  purely  cyclical  factors. Committee  considers  that,  when  surveying  the 
economic  policies  of 1975,  the  Commission  should 
have  mentioned  that  Member  States  have  not 
coordinated  their  reflationary  policies  to a greater 
extent  than  in the past. 
3.21.  The  Committee  is pleased  that  a number  of 
the Member  States  have  announced  their  reflation 
programmes  at more  or less  the same  time.  But  the 
Committee  also  notes  that  this  has  not been  the case 
with  all Member  States.  The  mere  fact  that  measures 
are announced  concurrently  does  not  necessarily 
mean  that  policy  is coordinated  to the degree  desired. 
3.30.  The  Committee  has  expressed  its views  on 
the need  for a realistic  approach  to the convergence 
of economic  policies,  and  the  Committee  wishes  to 
repeat  in this  opinion  that  policy  coordination  does 
not imply  that  all  the  Member  States  should 
introduce  identical  measures  and  apply  them  in 
exactly  the  same  way.  Rather,  each  Member  State 
should  tackle  the particular  problems  facing  it with 
the means  at its disposal.  The  aim  of each  Member 
State  should  not  only  be to improve  its individual 
situation  but also  to prevent  the economic  disparities 
between  the Member  States  from  increasing. 
3. Economic  policies  in 1975 
3.10.  The  Committee  is aware  that  Member  States 
have  felt  it wise  to apply  reflationary  measures  with 
considerable  caution,  so as not  to negate  their 
respective  anti-inflationary  policies.  Both  inside  and 
outside  the  Community,  it is proving  extremely 
difficult  to adopt  the right  measures  at the right  time. 
As a result,  either  the  steps  taken  do not  have  the 
results  hoped  for,  or their  impact  is only  short-lived. 
The Committee  shares  the  Commission's  view  that 
the failure  of economic  policy  to achieve  many  of its 
targets  is due  to  structural  rigidities  and  the 
substantial  time-lag  before  measures  work  through. 
Furthermore,  economic  operators  have  often  reacted 
in an unexpected  manner.  Generally  speaking,  the 
policies  pursued  have  not made  sufficient  allowances 
for these  factors. 
3.20.  The  annual  report  refers  to the  economic 
interdependence  of Member  States  and,  later,  when 
dealing  with  the  general  guidelines  for  economic 
policy  in 1976,  to the  absolute  necessity  of coordi-
nating  Community  economic  policies  more.  The 4. Outlook  for 1976 
4.10.  Prospects  must  be seen  in the  international 
context.  Consequently,  the Commission's  hypothesis 
depends  on other  factors  in addition  to the  two  it 
mentions.  These  factors  are  i.e.:  (i)  economic 
recovery  in  the  major,  non-EEC  industrialized 
countries,  primarily  the United  States  and  Japan;  (ii) 
improvement  of  the  financial  situation  of  the 
non-coinmodity  producing  developing  countries. 
4.20.  It  is, however,  very  difficult  to make  reliable 
forecasts  because  of the many  uncertainties  involved 
and the  undeniable  impact  of structural  problems. 
The much-heralded  upturn  in the  economy  has  not 
materialized  so far.  It is still  too early  to say whether 
the recession  has  bottomed-out  or not.  It is also 
doubtful  whether  the recovery  will  be strong  enough 
to bring  down  unemployment,  and  we do not  know 
whether  there  will  subsequently  be a new  recession. 
4.21.  The  Committee  is therefore  surprised  to note 
that,  although  the  Commission  acknowledges  in the 
first chapter  that  its predictions  in previous  annual 
No C 15/14 Official  Journal  of the European  Communities 22. 1. 76 
reports  were  considerably  wide  of the  mark,  the 
views  it expresses  on the scope  and  the timing  of the 
economic  revival  are  still  not  very  cautious.  The 
Commission  assumes  that  there  will  be a combined 
stimulus  from  four  developments,  namely:  expansion 
of world  trade,  positive  impact  of the  reflationary 
measures  adopted  by the  governments,  spontaneous 
internal  factors  making  for recovery  and  restoration 
of confidence.  We  cannot,  however,  be certain  that 
these  developments  will  materialize. 
4.30.  A  comment  should  be made  on the  more 
specific  issue  of the  dependence  of the  Community 
economy  on the  international  economic  situation. 
The Committee  is convinced  that  the boost  given  to 
the Community  economy  by economic  recovery  in 
the leading,  non-EEC  industrialized  countries,  i.e., 
primarily  the  United  States  and  Japan,  will  not 
depend  solely  on the  scale  and  duration  of that 
recovery.  Exchange  rate  fluctuations  will  also  play  a 
role. 
4.31.  The  Commission  thinks  that  the  volume  of 
world  trade  will  probably  expand  by about  5 % in 
1976.  The  Committee  hopes  that  this  forecast  will 
prove  correct. 
4.40.  As  pointed  out  above,  the  Committee 
believes  that  the recovery  originally  forecast  for 1975 
may materialize  in 1976,  but no one  can  say for sure 
how vigorous  or how  extensive  it will  be. The  impact 
of the  — sometimes  drastic  — measures  taken 
recently  in the  different  Member  States  cannot  be 
gauged  until  the  end  of the  year.  In the  past, 
measures  to stimulate  the economy  have  not had  the 
anticipated  effect  because  businesses  were  not  ready 
to invest. 
4.41.  As  regards  the  1 % increase  in GNP  that 
could  come  from  the  reconstitution  of stocks,  the 
Committee  would  point  out  that  this  figure  will 
depend  on a number  of factors,  in particular  the rate 
of restocking,  the  level  of inflation  and  the  general 
economic  context. 
4.50.  The  Committee  recognizes  that  increased 
consumer  spending  and  a reduction  in excessive 
saving  is necessary  and  will  hinge  on the restoration 
of confidence,  given  the effects  of the uncertainty  in 
the area  of  employment  and  the  fact  that 
psychological  factors  have  a considerable  influence 
on consumer  behaviour. 4.51.  It  is recommended  in the annual  report  that 
the two  sides  of industry  cooperate  closely  on 
incomes  policy,  employment  policy  and  social  policy. 
Such  cooperation  will  be forthcoming  only  when  all 
economic  interest  groups  and  all sectors  of society 
recognize  the  gravity  of the  situation  and  their 
responsibilities,  and  when  the  Governments  of the 
Member  States  create  a climate  favourable  to 
cooperation. 
4.60.  The  Committee  endorses  the  Commission's 
views  on private  investment.  Reluctance  to invest  is 
likely  to persist  in the months  to come. 
4.70.  The  Commission  says  that  the  gradual 
upturn  which  it forecasts  will  lead  firstly  to an 
increase  in the  number  of hours  worked  and  less 
short-time  working  and  only  later  to  lower 
unemployment.  This  scenario,  which  may  be 
regarded  as realistic,  should  prompt  the  authorities 
and all parties  concerned  to intensify  the fight  against 
unemployment  and  to take  the  requisite  social 
measures  to alleviate  its effects. 
4.71.  In  any  event  it is doubtful  whether  the 
economic  recovery  in 1976  will  be strong  enough  to 
stop unemployment  rising. 
4.80.  An  upsurge  in demand  coupled  with  the rise 
in the cost  of oil and  other  commodities  could  also 
mean  that  the tempo  of consumer  price  increases  will 
continue  almost  unchecked  in 1976. 
4.81.  The  Committee  endorses  the  Commission's 
forecast  of unfavourable  balance-of-payment  trends 
and further  budget  deficits  in 1976. 
5. Guidelines  for economic  policy  (IV.A) 
5.10.  The  Committee  views  with  astonishment  the 
statement  in  the  annual  report  that  a deep 
depression  has  been  avoided.  In its view,  the present 
recession  is the worst  since  the Second  World  War.  In 
the present  circumstances,  the prime  aim  of economic 
policy  must  be to combat  effectively  the high  rate  of 
unemployment  associated  with  the  recession,  and 
bring  about  an economic  situation  where  there  is 
stability  and  full  employment. 
22. 1. 76 Official  Journal  of the  European  Communities No C 15/15 
5.11.  The  Committee  would  endorse  the 
Commission  statement  that  national  policies  should 
be coordinated  at Comrriunity  level,  in order  to 
reduce  disparities  between  the Member  States  which 
are liable  to compound  the  difficulties  of backward 
areas  and  ailing  industries.  Such  coordination  must 
take place  in an international  context  in which 
non-commodity-producing  DC's  are increasingly  able 
to finance  their  own  development. 
5.12.  Since  structural  problems  play  such  an 
important  role  in current  economic  trends,  short-term 
economic  policy  must  not  be  divorced  from 
medium-term  policy.  In  this  connection  the 
Committee  would  recall  the recommendations  made 
in the Economic  and  Social  Committee's  opinion  on 
restructuring  of the  economies.  It is regrettable  that 
the Annual  Report  does  not stress  this  aspect  more. 
5.20.  As  regards  budgetary  policy  the  Committee 
would  emphasize  that  the economic  situations  of the 
various  Member  States  differ,  in particular  as regards 
inflation  rates.  They  are  therefore  obliged  to pursue 
diverging  policies  and,  at all events,  to take  measures 
of varying  rigour.  Throughout  the  Community,  a 
cautious  course  must  be plotted  between  inflation  and 
recession. 
5.21.  This  means  that  those  Member  States  with  a 
high inflation  rate  should  steer  clear  of measures 
which  would  fuel  inflation.  Similarly,  those  Member 
States  running  a particularly  large  budget  deficit 
should  avoid  measures  which  would  increase  this 
deficit. 
5.22.  The  Committee  completely  agrees  that  any 
tax relief  measures  recommended  by the Commission 
for 1976  should  be designed  mainly  to offset  the 
impact  of inflation  on the tax burden. 
5.23.  The  Committee  also  agrees  with  the 
Commission  that  a cautious  approach  should  be 
adopted  in this  field,  especially  where  stimulating 
consumer  demand  is concerned.  Account  should  also 
be taken  of  structural  difficulties  and  of  the 
inflexibility  of tax relief  measures. 
5.24.  The  Committee  considers  that  the 
stabilization  or  reduction  of  net  borrowing 
requirements  recommended  in the  annual  report 
depends  on business  picking  up.  The  Commission 
considers  that  such  an upturn  is possible. 
5.25.  The  Commission's  forecasts  take  account  of 
the risk  of a further  upsurge  of inflation.  The Committee  regrets,  however,  that  the  economic 
policy  guidelines  do  not  stress  the  need  for 
anti-inflation  measures  and  would  refer  to the 
Economic  and  Financial  Questions  Section's  Infor-
mation  Report  on Inflation,  adopted  on 29 January 
1975. 
5.26.  Anti-inflation  policy  must  deal  with  the 
various  relevant  domestic  factors,  such  as the money 
supply,  public  spending  and  the  costs  and  prices.  It 
must,  however,  be  remembered  that  there  are 
external  factors  which  the  Member  States  and  the 
Community  cannot  influence. 
5.27.  If  an anti-inflation  policy  is to be acceptable, 
increases  in incomes  and  prices  must  be kept  within 
the limits  imposed  by the  need  to maintain  and 
promote  business  profitability,  employment  and 
consumers'  purchasing  power. 
5.28.  In  keeping  with  the specific  situation  of each 
Member  State,  economic  activity  should  be 
stimulated  either  by  increasing  the  number  of 
government  contracts  and  public  sector  schemes,  or 
by encouraging  private  consumption  and  investment, 
or by a combination  of these  measures. 
5.30.  The  Committee  agrees  with  the  Commis-
sion's  approach  to monetary  policy,  and  with  the 
need  to coordinate  interest-rate  policies.  Like  the 
Commission,  it stresses  the need  to exercise  a certain 
degree  of caution,  so as to avoid  an  excessive 
expansion  of liquidity. 
5.31.  As  far  as  balances  of  payments  are 
concerned,  the Committee  notes  that  the Commission 
lays down  no particular  guidelines.  In its view,  those 
Member  States  running  balance-of-payment  deficits 
must  launch  an export  drive  in order  to reduce  their 
deficits.  Those  States  with  a balance-of-payments 
surplus  should  place  the  emphasis  on stimulating 
domestic  demand. 
5.40.  The  Committee  is very  interested  in item  4.4 
of the annual  report,  because  it is there  in particular 
that the  Commission  calls  upon  socio-economic 
groups  and  the public  authorities  to help  restore  the 
confidence  necessary  for any  economic  recovery.  The 
Committee  believes  that  the  economic  and  social 
aspects  of the  present  situation  are  indivisible,  since 
the aims  of any  reflation  must  be to eradicate 
unemployment  and  to maintain  and  improve  living 
standards  in the Community. 
No C 15/16 Official  Journal  of the  European  Communities 22.1.  76 
5.41.  The  Committee  shares  the  Commission's 
view  that  an  economic  upturn  and  a fall  in 
unemployment  are  contingent  on  speedy 
re-establishment  of confidence.  In this  context, 
particular  importance  attaches  to a return  to more 
stable  economic  conditions  at Community  and 
international  level. 5.48.  The  Committee  would  stress  the  need  to 
have  a government  credit  policy  for  small-  and 
medium-sized  businesses  so  as  to enable  such 
businesses  to carry  out investment  projects. 
5.42.  It  therefore  agrees  with  the Commission  that 
representatives  of economic  interest  groups  and  the 
various  sections  of society  should  play  a part  in 
creating  a climate  of confidence  which  would 
generate  public  support  for the measures  to be taken 
by the Member  States,  and  encourage  investors  and 
consumers  to  help  bring  about  the  necessary 
economic  recovery. 
5.43.  In  this  connection,  the  Committee  observes 
that temporary  measures  introduced  as a part  of 
short-term  economic  policy  have  frequently  proved 
ineffective.  Such  temporary  measures  simply  do not 
have  the  anticipated  effects,  particularly  in the 
spheres  of investment  promotion,  the encouragement 
of consumption  and  the  drive  against  inflation. 
Contributing  factors  include:  (i)  the  time-lags 
between  the  moment  when  decisions  are taken  and 
their  implementation;  (ii) the  fact  that  the  effect  of 
the measures  may  disappear  as soon  as they  are 
discontinued.  At all events,  the  result  is that  the 
problems  are left  unresolved,  and  the climate  created 
is not conducive  to their  solution. 
5.44.  The  Committee  stresses  that  measures  to 
improve  the economic  situation  must  form  part  of a 
coherent  medium-term  policy. 
5.45.  Steps  should  also  be  taken  to  foster 
investment.  In  view  of  the  present  level  of 
unemployment,  encouragement  should  be given  in 
particular  to investments  which  will  create  jobs. 
5.46.  The  Committee  would  point  out  that 
investment  promotion  should  involve  more  than  tax 
concessions  and  counter-cyclical  bonus  payments. 
5.47.  There  are two  pre-requisites  for investment. 
Firstly,  market  conditions  must  be such  that  investors 
can reasonably  expect  that  goods  produced  (or 
services  provided)  by the concern  in which  they  have 
invested  are  likely  to find  a buyer;  secondly,  firms 
must  have  the requisite  capital  at their  disposal,  and 
decide  to use it. 6. Conclusions 
6.10.  The  annual  report's  conclusions  are cautious 
in tone.  Considering  how  far previous  annual  reports 
were  out in their  assessments  of the situation,  caution 
seems  called  for when  predicting  the  bottoming-out 
of the  recession  and  the  onset,  amplitude  and 
duration  of the recovery. 
6.11.  The  need  to see  the  seriousness  of the 
situation  realistically,  so that  the  public  appreciates 
the importance  of the measures  that  are to be taken, 
must  not lead  to panic  or fatalism.  Neither,  however, 
must  a spirit  of moderate  optimism,  encouraging 
governments  to pursue  a forceful  policy,  result  in the 
real difficulties  being  glossed  over. 
6.12.  In  paragraph  1.3  of the  annual  report  it is 
stated  that  'the  recession  .. . (began)  ... in the United 
States  and  Japan  ...  (and)  ...  spread  to all the 
industrialized  countries  and  the  non-oil  developing 
countries'.  In  its  conclusions,  however,  the 
Commission  says:  'The  Community  should  not in the 
immediate  future  count  too  much  on a boost  to 
economic  activity  from  third  countries.  Its weight  in 
international  trade  forces  the  Community  itself  to 
contribute  to the recovery  of the world  conjunctural 
situation. 
6.13.  Given  the  unstable  state  of the  world 
economy,  the European  Economic  Community  must 
ensure  that  it can  assume  its full  responsibilities  in 
respect  of the new  problems  facing  the industrialized 
nations.  The  Committee  deplores  the  fact  that  the 
annual  report  does  not  go more  deeply  into  this 
aspect.  In addition,  the  international  context  of 
economic  trends  must  be monitored  more  closely 
than  ever. 
6.14.  The  Committee  endorses  the annual  report's 
conclusion  that  the Member  States,  who  after  all are 
jointly  responsible  for  economic  recovery  in the 
Community,  must  hold  frequent  consultations  and 
coordinate  their  policies  closely. 
22. 1. 76 Official  journal  of the European  Communities No C 15/17 
6.15.  The  annual  report  proposes  guidelines  to be Council  has  taken  its  decision,  the  individual 
followed  by the  individual  Member  States  in their  governments  will  be capable  of implementing  it in 
economic  policy.  The  Council  is asked  to approve  such  a way  that  the  results  will  this  time  exceed 
these  guidelines.  The  Committee  trusts  that  once  the expectations. 
Done  at Brussels,  30 October  1975. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the  proposal  for a Council  Directive  amending  Directive  72/464/EEC  on 
taxes  other  than  turnover  taxes  which  affect  the consumption  of manufactured  tobacco 
The text  referred  to the Committee  was  published  in Official  Journal  of the European 
Communities  No  C 150  of 5 July  1975,  page  4. 
On 27 June  1975,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  100  of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
134th  plenary  session,  held  in Brussels  on 29 and  30 October  1975. 
The full  text  of the opinion  is as follows: A. LEGAL  BASIS  FOR  THE  OPINION 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, Having  regard  to earlier  Committee  opinions  on the 
harmonization  stages  for  indirect  taxes  on 
manufactured  tobaccos, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  100  thereof, Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr O'Ceallaigh, 
Having  regard  to the request  for an opinion  made  by 
the Council  on 27 June  1975, Having  regard  to the  opinion  issued  by the Section 
for Economic  and  Financial  Questions  at its meeting 
on 30 September  1975, 
Having  regard  to the decision  taken  by its Chairman 
on 24 June,  instructing  the Section  for Economic  and 
Financial  Questions  to draw  up an opinion  on the 
matter, Having  regard  to the discussions  at its 134th  plenary 
session,  held  on 29 and  30 October  1975  (meeting  of 
29 October),