ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(78)35
Vol.1978/0014

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COMMISSION OFTHEEUROPEAN COMMUN1TIE
COM(78)35 final
Brussels,3February1978
Proposalfora.
COUNCILREGULATION (EEC)
amendingRegulation (EEC)No2305/70onthe
financingofintervention expenditure inrespect
ofdomesticmarketinbeefandveal
(submittedtotheCouncilbytheCommission )
C0M(78)35final

EXPLANATORY MEMORANDUM
Expenditure financedbytheGuaranteeSectionoftheEAGGFinrespect
ofthebuying-in,storageandresaleofagricultural productsbythe
intervention agencies,so-calledsecondcategoryintervention ,are
presentedinafinancialaccountbyagriculturalproducton31December
ofeachyear.
Thisbalancesheetincludesthevaluationofend-of-yearstocks.
Ingeneral,,thevaluationofend-of-yearstocksismadeonthebasisof
theintervention priceorofanotherpricefixedwithinthecommonorga­
nizationofmarketsandvalidonthefirstdayofthefollowingfinancial
year,i.e.1January.However,1January1978alsosignalsthefinal
stageofthealignmentofagricultural pricesinsomenewMemberStates.
Consequently,accordingtotherulesinforce,theintervention agencies
concernedmustrevaluethestockstobecarriedforwardto1978,wiiich
therebygaininvalue.Ofcourse,thisgainwillonlymaterializeas
profitonresale,andmeanwhilethefundstiedupinthevalueofthe
productareincreased,resultinginhigherinterestcosts.Thispheno­
menonisofsomeimportanceinthebeefandvealsectorduetothesize
ofbeefandvealstocksinIreland.

RecentlytheCommission presentedtotheCouncilaRegulation laying
downgeneralrulesforthefinancingofintervention inrespectof
buying-in„storageandresale(C0MC77)723).Toeliminateupvaluation
ofstockscarriedforward,thisproposalprovidesthattheybevalued
atthebuying-inprice.However,itcanonlybegintoapplywith
respecttothestockstobecarriedforwardattheendof1978.
Consequently andadhocsolutionshouldbesoughttodealwiththe
substantial upvaluation ofend-1977carry-forward stocksinthebeef
andvealsectorandtheconsequential additiontointerestcharges
(seeFinancialStatement).Itisthereforeproposedthatthestocks
bevaluedatthepricesvalidon31.12.1977 .

ProposalforaCouncilRegulation amendingRegulation (EEC)N°2305/70
onthefinancingofintervention expenditure inrespectofthedomestic
marketinbeefandveal
TheCounciloftheEuropeanCommunities,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtoCouncilRegulation (EEC)N°729/70of21April1970onthe
1financingofthecommonagricultural policy,aslastamendedbyRegulation
(EEC)N°2788/72^,andinparticularArticle3(2)thereof,
HavingregardtotheproposalfromtheCommission,
WhereasCouncilRegulation (EEC)N°2305/70of10November1970onthe
financingofintervention expenditure inrespectofthedomesticmarketin
3 . .....beefandveal,aslastamendedbyRegulation (EEC)N°565/77,provides
forintervention expenditure arisingoutofthebuying-in,storageand
resaleoftheproductsinquestiontobedetermined bymeansofannual
accounts;whereastheseaccountsincludethevalueofthestockstobe
carriedforwardtothefollowingyear;
WhereasthesameRegulationprovidesthatthevalueofthestockstobe
carriedforwardtothefollowingyearistobedetermined onthebasisofth
guidepricevalidonthefirstdayofthefollowingfinancialyear;
whereasthisdatecoincideswiththelastalignmentofpricesprovidedfor
intheActofAccession,entailinganincreaseinvaluewhichisnotrea­
lizeduntilthestocksinquestionareresold,butwhichhastheeffectof
increasingthefundstiedupinthevalueoftheproductfromthebeginning
ofthefinancialyearwithaconsequential additiontointerestcharges;
0JN°L94,28.4.1970,p.13
20JN°L295,30.12.1972,p.1
30JN®L249,17.11.1970,p.1
40JN°L72,19.3.1977,p.3

-2-
Whereas,topreventthissituationarising,intervention agenciesshould
usetheguidepricevalidon3")*12.1977tocalculatethevalueofthe
stockscarriedforwardtothe1978financialyear,
HASADOPTEDTHISREGULATION :
SoleArticle
Thefollowingsubparagraph isaddedtoArticle3(1)(a)ofRegulation (EEC)
N°2305/70:
"However,forpurposesoftheaccountasof31„12„1977theIrishintervention
agencyshallusetheguidepricevalidon31.12.1977forthecalculation
referredtoabove",-
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicable in
allMemberStates.
Doneat For
ThetheCouncil
Président

FINANCIAL STATF.MFfIT r.m*i "iw*u
datet4.1.78
1.budgetlxnsconcerned »Article651-Item6511
2.actioniProposalforaCouncilRegulationamendingRegulation (EEC)N°2305/70
onthefinancingofinterventionexpenditureinrespectofthedomesticmarket i
inbeefandveal.
3.legalbasis:Regulation (EEC)N°729/70-Article3(2).
4.objectives:Topreventagaininvalueofend-of-yearintervention stocksinthe
beefandvealsectorowingtothefinalstageofalignment .ofagriculturalpricesinthenewMemberStates.
5.FINANCIAL CONSEQUENCE
5.0EXPENDITURE
-CHARGEDTOTHEECBUDGET
(x»»xj*/interve;/tiohs)
-CHAHGEDTONATIONALADMINISTO.1)
■KXATCCKDC 5KXSTOCKXX'KXJMLXQRRUHB
5.1RGSBMflCX
J0X.-X*Î*X>5M«£3C»KM»*«
ΚΧΒΒβΚί5ΤβΙΧ3«·ΧΧΠϋΧίΕΒΧ
-ΝΧΚ&ΧΜ,FORTHEKARKETINa YEAR FINANCIAL YEAH
LZZJ
+8FOLLOhl»!3j::iAÎJCIALYEAR
LJ.2L
-8
~0,32
-8.32
YEAR YEAH
5.0.1pluma-vnualpattermcfexpenditoretheproposedmeasureconcernsthe1977and1978
5.1.1koj*MXMAXspcsgctzm financialyears.
206Mu.a.
198Mu.a.5.2METHODOFCALCULATION
Valueofstockstobecarriedforwardcalculatedaccordingtothe 206Mu.a.existingrules
Valueofstockstobecarriedforwardcalculatedaccordingtothedraft198Mu.a.
proposal
Difference 8Mu.a.
Theproposedamendmenthastheeffectofforegoingagaininvalueontheend-of-
yearstockandtherebycreatessupplementary expenditureof8Mu.a.underthe1977
Budget.Ontheotherhanditwillleadtoasimilarreductioninexpenditureinre­
lationtoestimatesat"thetimeofsale.Inaddition,forthe1978Budget,thepro­
posalwillmeanareductionininterestchargesonthefundstiedupinthevalueo-f-thogoeda ■Onjiij.u.p^i).a.l|(8Mmatwfr-Kw0.5)■
6.0FINANCINGPOSSIBLEWITHCREDITSINSCRIBEDINRELEVANTCHAPTEROFC0X0E8XBUDGET?YES/MÔ
6.1røse*sutxorxIMXATXXaxwxatxbhutjesxMxsøxaeotxsaaocK*
6.2JÈXOtX:»***»* mXXXX?
6.3CREDITSTOBEWRITTENINTOFUTUREBUDGETS?YES/NO
COHŒNTSI
1)DuetothefactthatintheMemberSta-'
forthefundstiedupinthevalueof'■.<
financedbytheEAGGF,theproposalwiI
160000u.a.concernedtherateofinterestpaid
?goodssignificantly exceedsthe8'/.
avoidnationalexpenditure ofabout