ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(76)585
Vol.1976/0182

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(76)585final
f ■
Brussels/11November1976
Proposalfora
COUNCILREGULATION (EEC)
ontheentriesintheBudgetoftheCommunities
relatingtothefinancialeffectofthedifferent
/conversionratesappliedformeasuresfinancedby
theGuaranteeSectionoftheEAGGF
(submittedtotheCouncilbytheCommission)
.
C0M(76)585final

EXPLANATORY MEMORANDUM
1.Since representative exchange rates were introduced in1973 within the frame­
work ofthecommon agricultural policy ,there hasbeen afinancial effeot due
totheapplication ofdifferent conversion rates .This iscaused "bythe fact
that theamounts expressed inunits ofaocount (u.a .)inagricultural measures
areconverted into national currencies attherepresentative rates "before being
granted tooperators ,,After theMember States hasrecorded theexpenditure in
national currency itisconverted atCommunity level into u.a .atthebudgetary
conversion rates sothat itmaybecharged up.Since therepresentative rates
tend tofollow theactual market exchange rates while thebudgetary conversion
rates remain thesame astheparvalues declared totheIMP ,theapplication of
these different conversion rates isproducing afinancial effect which isof
increasing significance forthebudget .
2.This financial effect increases progressively aschanges inthereal rates of
exchange arefollowed bychanges intherepresentative rates .Following the
changes inthelatter and intherelative share ofeach Member State intotal
EAGGF expenditure ,thefinancial effect hasentailed additional expenditure whic ^
wasrelatively minor in1973 buthasgrown year byyear endwhich isestimated
at377million u.a.for1976 ax>d538million u.a«in1977 *
»«/••

-2-
3.TheCommissionhasproposedthataseparateheadingbecreatedinthe1977
"budgetinordertoisolatethisphenomenonandthisproposalwasaccepted "by
theCouncilwhenthedraftbudgetwasapprovedon22July1976.
4.Asthepayingagencies(pursuanttoArtiole4ofRegulation729/70)keep
theiraccountsinthenationalcurrency,theCommissionhastoconvertthis
expenditureintobudgetaryunitsofaccount.Iftheeffectofdifferentcon­
versionratesweretobeisolatedinaccountingterms,therewouldhavetobe
separateaccountingforagriculturalexpendituredependingontherepresenta­
tiverateapplied;thiswouldobligethe42payingagenciesandtheirbran­
chestorevisetheiraccountingsystem.Suchachange-overatshortnotice
wouldcauseadministrative complications whichallagencieswouldfinddiffi­
culttoovercome.
5.As"theseparationofexpendituretakesplacebetweenheadingswithinthesame
budgetandhasnogeneralfinancialeffect,theCommissionproposestoavoid
administrative complications byseparatingthefinancialeffectsofdifferent
conversionratesatCommunitylevelaccordingtoamethodtobeimplemented
undertheprocedureprovidedforinArticle13ofRegulation729/70(Commission
DecisionafteranOpinionfromtheEAGGFCommittee).Thismethodwouldconsist
ofarrivingataseparationbyapplyingweightingsperMemberStatetoallthe
expenditurenotifiedbythe®.Theseweightingswouldbefixedinthelightof
theeffectofdifferentexchangeratesforeaohcurrencyandtheperiodof
paymentineachMemberState*Iftherepresentative conversionrateswerechan­
ged,theseweightingswouldbeadjustedaccordingly.

PROPOSAL
FOR
COUNCILREGULATION
onentriesintheBudgetofthe
Communitiesrelatingtothefinancial
effectofthedifferentconversion
ratesappliedformeasuresfinanced
bytheGuaranteesectionoftheEAGGF*
THECOUNCILOFTHEEUROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,andin
particularArticle43and209thereof,
HavingregardtotheproposalfromtheCommission,
HavingregardtotheOpinionoftheEuropeanParliament,
WhereastheBudgetoftheCommunitiesprovidesthatfrom1January1977aseparate
headingshall"beusedforexpenditureresultingfromtheapplication ofdifferent
conversionrates,namely,therepresentative ratesusedtoconvertintonational
currenciestheamountsrelatingtooperationsfinancedbytheGuaranteeSectionof
theEAGGFandthebudgetaryratesusedtoconvertexpenditure expressedinnational
currenciesforthepurposeofchargingittotheBudget;
Whereasthepayingauthorities andbodiesreferredtoinArticle4ofCouncilRegu­
lation(EEC)NO729/70of21April1970onthefinancingofthecommonagricultural
lastamendedi)YRegulation ,(EEC)2783/72(2)...policy^1;donotIngeneralTceejrseparateaccountsaccordingtotherepresentat
rateapplied;whereastheintroduction ofseparateaccountsatthislevelwould
leadtomajoradministrative complications ;whereasthereforeamethodshouldbe
usedwhichtakesaccountofthefactorsdeterminingthelevelofsuchexpenditure .
sothatseparateacoountsceilbekeptatCommunityISTSIoftheexpenditureresul­
tingfromdifferentconversionrates;
HASADOPTEDTHISREGULATION
••/«9
(1)OJNoL94,28.4.1970,p.13
(")n.lMn! 19??.n1

Article 1
1,Theentries intheBudget oftheCommunities relating tothefinanoial effect
ofapplying ,ontheonehand,therepresentative rates toconvert into
national currencies theamounts relating tooperations financed bythe
Guarantee-:SectionoftheEAGGF ,and,ontheother hand ,thebudgetary rates
toconvert expenditure expressed innational currencies forthepurpose
ofcharging ittotheBudget oftheCommunities ,shall "bemadeinacoofdanoa
withamethod to "beadopted under theprocedure provided forinArticle 13of
Regulation (EEC)No729/70*
2.Themethod referred .toinparagraph 1shall ,inthecaseofeach
Member State ,takeparticular account ofthebudgetary rate ,thevarious re­
presentative rates ,theperiod oftheir application andthe
customary inerjod ofjpayi^en£r~ .. ■
Article 2
ThisRegulation shall enter intoforce onthethird dayfollowing itspublication
intheOfficial Journal oftheEuropean Communities# Itshall apply witheffect
from the1977 finanoial year .
ThisRegulation shall bebinding initsentirety anddireotly applicable inall
Member States *
Bone atPor theCounoil
ThePresident ,