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DOCUMENTS "COM"
COM(80)334
Vol.1980/0120

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)334final
Brussels,11June1980
Proposalfora
COUNCILREGULATION (EEC)
amendingRegulation (EEC)No1172/76of17May1976
settingupafinancial mechanism
(submittedtotheCouncilbytheCommission )
XrV.\
l<r.•
V;
COM(80)334final
I/

EXPLANATORY MEMORANDUM
1.Aspartofthediscussion onconvergence and"budgetaryquestions
withintheCommunityInstitutions ,theCouncilofMinisters(Foreign
Ministers),meetingon29and30May1980»agreedthatpaymentsbemade
totheUnitedKingdomsoastoreduceitsnetcontribution tothe
CommunityBudget,Oneofthemeasurestobetakensoastoachieve
thisaim,whilecomplyingwiththeCommunity'sownresourcesarrangements ,
isthesetting-upofanalteredfinancialmechanismbyamending
Regulation(EEC)No1172/76of.17May1976settingupafinancialmechanism.
2.ThedraftRegulationamendingtheRegulationreferredtoaboveconfirms
theaimprovidedforwhenthefinancialmechanismwassetupin1976,
whichwastopreventasituation–incompatible withtheproperfunctioning
oftheCommunity–fromarisingwherebytheeconomyofaMemberState,
whilstinaspecialsituation,wouldbeobligedtobearadisproportionate
burdeninthefinancingoftheCommunityBudget.However,asimplification
ofthemethodsofcalculating thepaymenttobemadetotheMemberState
applyingisprovidedfor,inparticulartheabolitionoftheprovisions
whichhadtheeffectofpreventingthemechanismfromentirelyfulfilling
itsintendedrole.
AnalysisoftheamendmentstoRegulation No1172/76
1.Amendmentsconcerningthemethodofdetermining theamountofthe
payment
AfeatureoftheoldRegulation wasthatArticle3providedforthe
4
divisionintotranchesoftheexcessamount–determinedinaccordance with
Article2(c)–oftheapplicantMemberState'scontributiontotheCommunity
Budget._ .•-
Thisdivisionintotranches,whichresultedinaconsiderable reductionof
thepayment,hasbeendeletedintheCommission'sproposal.

In"thelightof"thedeoisionstakenbytheCouncilon29and30May1980,
Article4»whiohlimitedpaymentsintheeventofapositivebalanceof
payments,willalsohaveto"bedeleted.Similarly,itisnecessaryto
removethelimittotheamountofthepayment,whichwasthehigherof
thefollowingamounts:25Omillionu.a.or33$ofthetotalexpenditure
chargeabletothefinancialyeartowhiohtheMemberState'sapplication
refers.
2.Technicaladjustment
However,someoftheamendmentstoRegulation No1172/76aredesignedto
solvetechnicalorpracticalproblemswhichhavecroppedupduringthe
periodinwhichtheRegulationhasbeeninforoe. 1
Thesemainlyconcerntheconsequences ofusingtheEuropeanunitofaccount
intheBudget,whichraisestheproblemoftheratetobeappliedforthe
variouscalculationsprovidedforbytheRegulation(see,inparticular,
theamendedversionofArticle2(c)).Inaddition,theterm"grossdomestic
product"shouldreplacetheterm"grossnationalproduct",aconceptno
longerusedinstatistical and-economio analysis.Otherwise,thisfigure
wouldhavetobereconstituted eachtimetheRegulation wasapplied.It
wasalsonecessarytospecifythatthestatisticstobeusedaretobethe
mostrecentonescompiledbytheStatistical Offioe.Theseamendmentshave
beenincorporated inparticularinArtiole7»whichsetsouttheprocedure
forcalculatingthefinalamountofthepayment.

COUNCILREGULATION(EEC)No.,of 19§Qamsrvding
Regulation(EEC)NoH72/76of17May1976Bettingup&financial
mechanism
THECOUNCILOPTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomio
Community,andinparticularArticle235thereof.
/
HavingregardtotheproposalfromtheCommission,
HavingregardtotheopinionoftheEuropeanParliament^,
2HavingregardtotheopinionoftheCourtofAuditors,
Whereasconditionsincompatible withtheproperfunctioning ofthe
CommunitycouldariseifaMemberState'seoonomy,whilstinaspecial
situation,isforcedto"bearadisproportionate "burdeninthe
financingoftheCommunity "budget;
Whereas,inaccordancewiththeguidelineslaiddown"bytheHeadsof
GovernmentinParison10December1974andmademorespecificin
Dublinon10and11March1975»andinordertopreventsuchconditions
fromarisingduringtheprocessofconvergenceoftheeconomiesofthe
MemberStates,CouncilRegulation(EEC)NoII72/76of17May1976setting
upafinancialmechanism^provided«forapaymentto"bemadefromthe
"budgetoftheCommunitiestotheMemberStatesinquestion;
Whereastheseguidelineshavesinoebeenconfirmedonseveraloccasions
bytheEuropeanCouncil,andwhereastheCouncilagreedon29and
30MayI98Othatchangesshouldbemadetothisfinancialmechanismso
thatitcanentirelyfulfilitsintendedrole.
WhereasthesechangesmusttakeaocountofexistingCommunityactsand
Communitysolidarity,
- /
HASADOPTEDTHISREGULATION :
-Article1
CouncilRegulation(EEC)No1172/76of17May1976isherebyamendedas
follows:
2fojsW
■*0JL131.20.5.1976",p.7.

-2-
1.InArticle :
(i)Theterms"grossnationalproduct 'V2J7P)"and"G1TP"in(a),("b)
and(c)shall"bereplaced "by"gr-.'ssdomesticproduct(GDP)"and
"GDP"respectively .
(ii)Thesecondparagraphshallhereplaced "bythefollowing:
"Thefiguresreferredtoin(a)and(b)shallhecalculated,as
movingaverages,fromtheresults .fortheprecedingthreeyears
andonthebasisofthemostrecentstatisticscompiled "bythe
Statistical OfficeoftheEuropean .Communities."
(iii)Thethirdparagraphshall"bereplaced "bythefollowing:
"Thecalculations providedforinthisArticleinrespectof
theGBPandpercapitaGDPreferredtoin(a)and(b)shallhe
madeonthe"basisoftheaverageannualvalueoftheEuropeanunit
ofaccount(SUA).Thepaymentsmade"bytheMemberStatesreferred
toin(c)aretakento"betheEUAestimatesgivenintheBudget
forthecurrentfinancialyear.TheGDPsforthecurrentfinancial
yearshall"bethemostrecentestimatesworkedout"bythe
CommissioninEUA."
2.Article3shall"bereplaced "bythefollowing:
Onassessingthefactsofthesituation,theCommissionshall,if
necessary,enterinanappropriate subdivision ofthepreliminary
draft"budgetfortheyearfollowingtheyearinwhichtheMemberState's
application wasmadeanappropriation equaltotheprovisional amount
ofthepayment.
Theamountofthepaymentshallbetheexcessamountestablished under
Article2(c),butitmayinnocaseexceedthesmallerofthefollowing
amounts:
–thenettransfersfromtheMemberStateduringthecurrentfinancial
yearunderArticle31oftheFinancialRegulationof21December1977?
regardlessofnetpaymentsmadetothatStateunderthisRegulation ;
transfersreceivedbytheMemberStateduringthecurrentfinancial
yearshallincludepaymentsmadeonitsbehalfbyotherMemberStates
asmonetarycoraensatory amountspaidpursuanttoArticle2aof
CouncilRegulation(EEC)17o974/7112Kay1971certainmeasures

ofconjunctural policytobetakeninagriculture followingthe
temporarywideningofthemarginsoffluctuationforthe
currenciesofcertainMemberStates*;
–thepaymentsbytheMember .Statetothebudgetofthe
Communitiesforthecurrentfinancialyearafterdeductionof
thecustomsdutiesandagriculturalleviesdefinedinArticle2(a)
and(b)ofDecision70/243/ECSC,EEC,Euratom."2
3.Articles4,5and6shallbedeleted.
4.ThesecondparagraphofArticle7shallbereplacedbythefollowing:
"Aftertherevenueandexpenditure accounthasbeendrawnup,andassoonas
ithasthefinaldatareferredtointhisRegulation,theCommissionshall,-
onthebasisofthisdata,calculatethefinalamountofthepaymentand
settlethebalance.Theabove-mentioned GDPdatashallbethefirstfigure
publishedbytheStatistical OfficeoftheEuropeanCommunitiesafterthe
revenueandexpenditure accounthasbeendrawnup.
ThepaymentsmadeunderthisRegulationshallbeexpressedinEUAandpaid
inthecurrencyoftheMemberState.Theexchangerateusedshallbethat
ofthedaytheCommissionreceivedtheapplicationreferredtoinArtiole2.
5.Articles8and9shallbedeleted.
Article2
ThisRegulationshallenterintoforceonthedayofitspublicationinthe
OfficialJournaloftheEuropeanCommunities.Itshailapplyfromthe
Financialyear1980. N
ThisRegulationshallbebindinginitsentiretyandcTii-ic^lyapplicablein
allMemberStates.
/
20JïïoL94,28.4.1970,p.19.

FINANCIAL ,RECORD
DATE :6June 1980
1."Budget heading :Chapter 41:Application ofthe "financial mechanism "pursuant
totheCouncil Decision -of^7May1976 "
2.Title ofmeasure :Proposal foraRegulation amending Regulation .(EEC)
NoH72/76of17May1976 setting upafinancial mechanism
3.Legal "basis :Article 235oftheEECTreaty
4.Aims ofmeasure :Alteration ofthefinancial mechanism setupin1976 inthe
light oftheCouncil meeting of29and30May .
5.Financial implications
5.0 Expenditure
-Charged totheEEC
Budget
(Refunds /Intervention )
5.1 RevenuejPeriod of
12monthsCurrent financial
year (80)Following financial
year (81)
280mEUA
*
1982 andsubsequent years
5.0.1 Estimated expenditure -Itisimpossible toestimate what appropriations will
"berequired infuture budgets until itisknown how
much each Member State will contribute towards the
5.1.1 financing ofthebudgets andeach Member State 'sshare
oftheCommunity GDP forthe financial years in
question .
5.2 Method ofcalculation : ..
Payment totheUnited Kingdom under the present Regulation
Payment totheUnited Kingdom under theproposed amendment187mEUA
467mEUA
280
Theestimated payment isbased ontheNewBudget Proposal for1980 ,taking into
account the Letter ofAmendment and the Commission 'slatest national GDP estimates .
6.0 Canthemeasure befinanced from appropriations intherelevant
chapter ofthecurrent Budget ? (Noappropriation required in
1980 ) , ' .YES/NO
6.1 Canthemeasure befinanced bytransfer between cha.pters of
thecurrent .Budget ? ,
6.2 Will asupplementary budget benecessary ?lES/NO
Xi£5 /N0
b.3 >Will future "budget appropriations benecessary'