ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)263
Vol.1980/0101

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GenerolSecretariatCOM(80)263 final
Brussels,12thMay1980
FOROFFICIAL USEONLY
NEGOTIATIONS FORTHEACCESSION OFSPAIN
TOTHECOMMUNITY
Economicandfinancialaffairs
(Communication fromtheCommission totheCouncil)
C0M(80)263final

negotiationsfortheaccessionofSpaintotheCommunity
\,V \
«
Economice^d__financial_afTairs
Inthecourseofexaminingactsofsecondarylegislationrelatingtoeconomio
andfinancialaffairs,itwasfoundthatsomeoftheacts.inquestionposed
substantiveproblemsandshouldthereforebediscussedinthenegotiations.
Theissuesinvolvedare:
-theinclusionofthepesetaintheEuropeanCurrencyUnit(ECU)basket
-creditfacilities(short-termmonetarysupportandmedium-termfinancial
assistance)andCommunityloans.
TheaimofthisCommissionstaffpaperistoputforwardbasicguidelines
fortheapproaohtobeadoptedtothesequestionsinthecontextofthe
workbeingdonewithSpaintoarriveatanoverallviewoftheissues.
Italsocontainsanumberofobservations bytheCommissiondepartments
concernedonfutureSpanish'participationintheEuropeanMonetarySystem
andthebenefitswhichSpainmightderivefromitbyvirtueofthemeasures
aimedatstrengthening theeconomiesoflessprosperousMemberStateB.
I.InclusionofthepesetaintheECUbasket
TheEuropeanCurrencyUnit(ECU)1isthekeystoneoftheEuropeanMonetary
System,withinwhichitaotsasaourrencyunitintheexchangerate
mechanism,abaseforthedivergenceindicator,adenominatorforvery
short-termfinancingoperationsandameansofsettlementbetweenCommunity
monetaryauthorities.
CounoilRegulation(EEC)3180/78of18December1978*

Given therole oftheECUthere canbenoexcluding anewMember State 's
currenoy from thebasket ,andthepeseta will *have tobebrought in.
»
Theonly point atissue istherefore thepractical arrangements fordoing
so,particularly asitisimportant that theECU'scomposition should not
bealtered too often .
Theapproach adopted inthenegotiations forGreece 'saoce'ssion took this
consideration into aooount byproviding that thedraohma istobe
incorporated before 31December 1985 ifthebasket isreviewed before that
date pursuant totheEuropean Council resolution of5December 1978 onthe
European Monetary System .Inanyevent thedrachma will beincluded in
thebasket by31December 1985 *tthelatest *
Itseems probable that asimilar approaoh will beadopted with Portugal ,
which is*diat that country hasinfact proposed .
Asregards thepeseta ,therefore ,anapproach based ontheprecedent of
Greece could beadopted ,thus making itpossible ,should circumstances
sodictate ,tobring thecurrencies ofthenewMember States into the
basket inasingle operation .
TheCommission will submit adetailed proposal onthis matter atalater
stage inthenegotiations .
II.Credit facilities (short-term monetary support *"andmedium-term financial
assistance )andCommunity loans
When theEuropean Monetary System wassetuptheCouncil Resolution of
5December 1978 stipulated that existing credit facilities would bemaintained ,
with their implementing arrangements ,fortheinitial period ofoperation of
theEMS .Inthefinal stage oftheEMS ,they will beconsolidated toform
asingle fund .Thus ,with theexception ofthevery short-term oredit
facilities which form anintegral part oftheEMSandfall within the
Decision No13/79oftheEMCF Board ofGovernors of13March 1979 »
2Council Deoision of22March 1971 aslast amended byCouncil Decision
78/1041/EECof21December 1978.

-3-
jurisdiction ofthecentral banks ,Spain 'sparticipation inshort-term
monetary support andmedium-term financial assistance isseparate from
itsparticipation intheEMSitself .
Accordingly ,whatever Spain 'sposition regarding participation inthe
exchange rate andintervention mechanism ,itwill beable tobenefit from
thetwotypes ofcredit facility ,which operate bymeans ofaquota
:1 . .2arrangement determining thesupport which each central bank orstate may
receive oragrees tofinance .
Thequotas tobeallocated toSpain andthesums invloved will benotified
totheCouncil after consultations have taken place with theMonetary
Committee atalater stage inthenegotiations .
Withregard toCommunity loans\thesizeoftheguarantee tobeprovided
bySpain forloans issued after itsaccession totheCommunity will be
determined onthebasis ofthequota allocated toitforthepurpose of
short-term monetary support .Therelevant acts cantherefore beadapted as
soon asthat quota hasbeen worked out .
III.Spain 'sparticipation intheEuropean Monetary System
(a)Itistooearly atthis stage ofthenegotiations tospeculate about
Spain 'sfull andeffective participation intheEuropean Monetary System .
Furthermore ,although theEMS isanintegral part oftheacquis communautaire ,
thedecision tooptforfull andeffective participation does notfall within
thescope ofthjaccession negotiations proper .Inaddition ,inaccordance
with theobjectives setintheEuropean Council Deoision of5December 1978 ,
theEMS will have entered anewphase bythetime thequestion arises in
practice .
Asfarascan beascertained from the information available tothe Commission
departments concerned ,Spain 'sparticipation intheexchange rate and
intervention mechanism under theEMS should pose noproblems .Even ifthe
peseta isnotincluded intheECU ,this will nothinder thesmooth operation
ofthedivergence indicator inrelation tothat currency ;itwould retain
^"Short-term monetary support .
^Medium-term financial assistance .
^Council Regulations (EEC)No397/75and398/75of17February 1975 *

itsfull fluctuation margin ,whereas thimargin forthecurrencies inthe
basket isreduced inproportion totheir weight intheECU .
(b)Tostep uptheconvergence ofeoonomio policies ,theEuropean Council
expressed thewish on5December 1978 that measures should betaken tohelp
less prosperous Member States whioh participate fully andeffectively in
theexchange rate andintervention meohani6m .
Inaccordance withtheEuropean Council 'sresolution ,theCouncil Regulation 1of
3August 1979 provided forspecial measures consisting essentially ofthe
granting -forfive years -ofinterest rate subsidies ofupto3onloans
bytheEIBfrom itsownresources andonthose acoorded byvirtue of
Decision 78/870/EEC (NewCommunity Instrument )forinfrastructure projeots in
theless prosperous Member States .
ForSpain tobenefit under this financial instrument ,itwill therefore have to
participate fully andeffectively intheexohange rate andintervention
meohanism andalso bedesignated bytheCouncil asaless prosperous country .
Adesignation decision canbetaken only after Spain 'sacoession totheCommunity
andistherefore notamatter fortheaccession negotiations .
Τ 1
Council Regulation (EEC)No1736/79of3August 1979 *
2ForI+aly andIreland :seeCouncil Decision 79/691/EECof3August 1979 .