3.12.  77 Official  Journal  of the European  Communities No C 292/13 
Whereas  the  market  does  not  warrant  an increase  in the  number  of Community  haulage 
permits  at the  present  time, 
HAS  ISSUED  THE  FOLLOWING  OPINION: 
1. The  Committee  does  not  think  it would  be wise  to follow  the Commission's  proposal. 
2. The  proposal  seeks  a 100  % increase  in the  number  of permits  for  1978,  but  does  not 
give the traffic  and  other  statistics  on which  the figure  was  arrived  at. 
3. Also,  the  Council  has  still  not  taken  a decision  on the  overall  organization  of the 
market  in freight  transport  between  Member  States,  on which  proposals  were  submitted  on 
1 October  1975. 
4. It  would  therefore  be premature  to allot  quotas  to the  Member  States  at this  stage 
using  as the  basic,  statistics  which  are  (a) out  of date  and  (b)  unsuited  to the  system  of 
market  monitoring  proposed  by the  Commission. 
5. The  Committee  therefore  asks  the  Council  to defer  consideration  of the  present 
proposal,  and  instead  to take  up (from  among  the  Commission's  1 October  1975  batch  of 
proposals  on the  overall  organization  of the  freight  market)  the  proposals  that  provide  the 
basis  for a Community  system  of capacity  regulation  in road  haulage'. 
Voting: 
For: 18 
Against:  50 
Abstentions:  10 
Opinion  on the European  Regional  Development  Fund  second  annual  report  (1976)  and 
summary  of the annual  information  for 1977 
The opinion  of the Committee  is not based  on any  published  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 146th  plenary  session  held  on 23 and  24 February  1977  the Committee,  acting  on 
a proposal  from  the  Bureau,  decided  to deliver  an opinion  on the  abovementioned 
subject  on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
151st  plenary  session,  held  in Brussels  on 28 and  29 September  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 
of the Rules  of Procedure  of the Committee, Having  regard  to its decision  of 23 and  24 February 
1977  to charge  the Section  for Regional  Development 
with  the  drawing  up of an opinion  on the  second 
annual  report  (1976)  of the  European  Regional 
No C 292/14 Official  Journal  of the European  Communities 3. 12. 77 
Development  Fund  and  the  summary  of the  annual 
information  for 1977, 
Having  regard  to earlier  work  of the Committee,  and 
in particular  the  study  on the  regional  development 
problems  of the  Community  during  the  period 
1975/77  and  the establishment  of a common  regional 
policy  as well  as the  opinion  on the  first  annual 
report  on the European  Regional  Development  Fund 
1975  and  the  summary  analysis  of  annual 
information  (1976)  (*), 
Having  regard  to the  opinion  issued  by the  Section 
for Regional  Development  at  its  meeting  on 
14 September  1977, 
Having  regard  to the  oral  report  made  by  the 
rapporteur,  Mr Loughrey, 
Having  regard  to the discussions  at its 151st  plenary 
session  of 28 and  29 September  1977  (meeting  of 29 
September  1977), 
HAS  ADOPTED  UNANIMOUSLY  THE  FOLLOWING 
OPINION: 
1. General  observations 
1.1. The  Committee  approves  the  report  on the 
activities  of the  European  Regional  Development 
Fund  1976  and  notes  with  satisfaction  that  the 
operation  and  management  of the  Fund  in a large 
measure  reflect  viewpoints  and  principles  already 
advocated  by the Committee. 
1.2. The  summary  of the  annual  information  for 
1977  was  not  issued  simultaneously  with  the second 
annual  report  as was  the  case  of the  summary 
analysis  of annual  information  in the previous  year.  It 
is recalled  that  the annual  information  shall  take  the 
place  of  the  national  regional  development 
programmes  until  such  programmes  are available  by 
the end  of 1977.  The  annual  information  should 
have  been  available  to the  Commission  at the 
beginning  of the year  (2). 
1.3. The  delay  in the issue  of the  summary  could 
indicate  a repetition  of the  failure  of some  Member 
States  to comply  fully  with  the  obligations  of the 
Regulation.  The  second  annual  report  refers  to 
difficulties  with  the statistical  summaries  due  in 1976 
but omits  reference  to those  due  in 1977  although 
the report  is dated  17 June  1977. 
n OJ  No C 56, 7. 3. 1977. 
(2) OJ  No  L 73, 21. 3. 1975,  Article  6 (6). 1.4. The  'Introdution'  to the  summary  quotes  in 
detail  the  provisions  of Article  6 (6) of the  Fund 
Regulation  but  omits  the subsequent  paragraph,  viz. 
-They  (Member  States)  shall  also  provide 
annually,,  at the  latest  by 1 April,  an overall 
statistical  summary  indicating  by  region  the 
results^  achieved  during  the  previous  year  as a 
result  of action  taken  in each  region.  Those 
results  to which  the Fund  has contributed  shall  be 
indicated  separately'. 
The Committee  shares  the Commission's  concern,  as 
expressed  in paragraphs  69 and  70, regarding  delays 
in the  submission  by some  Member  States  of these 
statistical  summaries  and  the  frequent  lack  of 
uniformity  in the  data  contained  in them.  This 
discloses  the existence  of a problem  in the practical 
compliance  with  the  Regulation  and  the  Committee 
notes  that  the  problem  is  currently  under 
examination  by the Regional  Policy  Committee. 
2. Allocation  of ERDF  resources  in 1976 
2.1. In  the  summary  of  annual  information 
(Chapter  2, page  26) some  significance  is attached  by 
the Regional  Policy  Committee  to the  fact  that  an 
average  of 75 % of the total  grants  was  allocated  to 
investment  in infrastructure  which  represents  55 % 
of the total  investment  on projects  assisted  during  the 
year.  The  comment  suggests  that  infrastructure  has 
increased  in importance  as compared  with  1975  and 
(quote)  'the  trend  is probably  due  to the effects  of the 
crisis  on the  propensity  to invest  of manufacturing 
industry  and  may  eventually  affect  the Fund's  success 
in creating  jobs'. 
2.2. The  Commission  questions  this  conclusion 
and an examination  of Table  IX,  page  27 would 
support  the  contention.  The  Regional  Policy 
Committee's  observation  is based  on  an average 
figure  but  analysis  of the  main  categories  of 
investment  in each  of the  eight  Member  States 
participating  in 1976  discloses  divergent  tendencies. 
Undoubtedly,  the  regional  policy  preference  for 
infrastructure  projects  in Italy  accounts  for  almost 
half of the  grants  allocated  to infrastructure  in the 
Community.  However,  if the average  is based  on the 
total  grants  to the  five  States  (Belgium,  Germany, 
France,  Ireland  and  the  United  Kingdom)  where 
3.12.  77 Official  Journal  of the European  Communities No C 292/15 
industrial  investment  exceeds  infrastructure  in every 
case,  the average  is 62 % on 37-5  % of total  invest-
ments  in that  group  of countries.  The  Committee 
must  therefore  interpret  the statistics  as indicating  a 
priority  by the Commission  in the allocation  of grants 
for infrastructure  investment  imposed  by the limita-
tions  of the Fund  available.  While  aids  for infrastruc-
ture schemes  must  certainly  not  be neglected,  never-
theless,  the Committee  is keen  on expansion  of aid to 
directly  productive  activities  which  tend  to create 
more  permanent  jobs. 
3. Loan  interest  rebates 
3.1. The  Committee  agrees  with  the  Commission 
in deploring  the failure  of Member  States  to utilize 
the loan  interest  rebate  facilities  for  infrastructure 
projects  and  welcomes  the  proposed  extension  of 
these  facilities  to industrial  and  service  projects  within 
the scope  of Article  4.1.  (a) of the Fund  Regulation. 
3.2. The  annual  report  of the European  Investment 
Bank  for  1976  refers  in some  detail  to the  Bank's 
contribution  to regional  development  activity  in the 
Community  and  specifically  mentions  that  those 
Member  States  which  have  received  the largest  finan-
cial assistance  have  arranged  cover  for the exchange 
risks  involved  by their  respective  national  govern-
ments.  Among  the  recommendations  of the  Com-
mittee  in its opinion  on the first  annual  report  of the 
Fund  was  the promotion  of EIB  loans  at reduced  rates 
of interest  with  protection  against  exchange  risks.  The 
Committee  urges  the  Commission  to encourage 
recourse  to this  source  of finance  with  the support  of 
similar  cooperation  from  the  governments  of other 
Member  States. 
4. Complementary  effect  of Community  regional  aid 
4.1. The  Committee  approves  the vigilance  of the 
Commission  in ensuring  that  there  is a visible  impact 
of the  Fund  contributions  on the  extent  of national 
regional  activity.  Apart  from  normal  project  identi-
fication  and  budgetary  acknowledgements,  the Com-
mittee  recommends  that  the  annual  report  should 
provide  a statistical  summary  of the annual  national 
regional  aid expenditure  in each  Member  State  over  a 
number  of years  to show  that  the trend  of national 
effort  does  not diminish. 4.2. In  fact,  the summary  of annual  information 
contains  information  along  these  lines  and  shows  the 
emergence  of a pattern  of trend  comparisons  in the 
allocation  of national  resources  for regional  develop-
ment  (Chapter  II, p. 19).  Tables  VII  and  VIII  are 
particularly  interesting  and  focus  attention  on the 
necessity  for an agreed  definition  of the composition 
of national  regional  aid.  Although  these  tables  are not 
brought  up to date  with  1976  statistics,  the accom-
panying  narration  indicates  that  some  named  Mem-
ber States  are reducing  their  allocations  in 1977  (as 
compared  with  1976)  for  regional  aid.  The  Com-
mittee,  as an advocate  of an effective  regional  policy, 
deplores  this  apparent  lapse  in the  determination  of 
some  Member  States  in the Community  to meet  the 
implied  obligations  of participants  who  derive  bene-
fits from  the European  Regional  Development  Fund. 
5. Cross-border  projects 
5.1. The  report  refers  to a study  of cross-border 
problems  between  Donegal  (Ireland)  and  Derry 
(Northern  Ireland)  (paragraph  34  of the  second 
annual  report  (1976))  and,  with  this  exception,  there 
are no actual  cross-border  projects  among  the total  of 
2 728 already  approved.  The  Committee  approves  the 
priority  which  the  Commission  attaches  to such 
cooperative  projects  between  the Member  States  and 
urges  the encouragement  of appropriate  applications. 
6. Payments  from  the Fund 
6.1. From  the  original  Fund  of 1 300 million  u.a. 
(including  150  million  u.a.  appropriated  from  FEO-
GA) 800  million  u.a.  has  been  allocated  as commit-
ments  up to the end  of 1976.  Payments  made  for the 
two initial  years  amount  to 368  million  u.a.  being 
46 % of the commitments  and  82 % of the provision 
for payments.  There  is a further  budgetary  payment 
appropriation  of 400  million  u.a.  in the current  year, 
1977  (paragraph  56 of the  second  annual  report 
(1976)). 
6.2. It  can  be anticipated,  therefore,  that,  at the 
end of the three-year  period,  1975  to 1977  for which 
the initial  Fund  was  established,  the assistance  from 
the Fund  in the form  of cash  payments  will  be con-
siderably  less  than  the total  of 850  million  u.a.  budge-
tary payment  appropriations.  On the basis  of 82 % of 
the provision  the payments  will  amount  to little  more 
than  half  of the Fund.  The  Committee  would  empha-
size the supplementary  character  of the Fund  to assist 
financially  and  encourage  investment  in projects 
No C 292/16 Official  Journal  of the European  Communities 3.12.  77 
designed  to alleviate  the current  level  of unemploy-
ment  and  hopes  that  procedures  can  be modified  to 
accelerate  the practical  advantage  of earlier  transfer 
of assistance. 
7. Inspection  control 
7.1. The  report  refers  to the inspection  of projects 
by the  Commission  (paragraph  59 of the  second 
annual  report  (1976)).  Since  the establishment  of the 
Fund  there  have  been  131  inspections  and  this  com-
pares  with  a total  of 2 728 projects.  In the absence  of 
a system  of delegated  responsibility  such  as described 
in operation  in some  Member  States  (paragraph  62 of 
the second  annual  report  (1976))  the  physical  pres-
ence  of Commission  personnel  must  be difficult  to 
provide.  The  Committee  does,  however,  question  the 
adequacy  of the sample  check,  especially  in the initial 
years  of the Fund  operation. 
8. Coordination  of Community  regional  instruments 
8.1. The  Committee  approves  the emphasis  in the 
report  on the necessity  for action  to ensure  coordina-
tion in Community  policies  and  coherence  in the aid 
from  the  various  Community  financial  instruments 
(paragraph  71 et seq.  of the  second  annual  report 
(1976)).  This  was  strongly  advocated  by the  Com-
mittee  in previous  opinions  and  the  Committee  is disappointed  that  the report  does  not  implement  the 
specific  recommendation  made  in the opinion  on the 
first annual  report.  The  Committee  agrees  with  the 
Commission  that  the impact  of the  Fund  cannot  be 
assessed  in isolation  (paragraph  6 of the  second 
annual  report  1976))  and  having  regard  to the desira-
bility  of the widest  possible  dissemination  of such  in-
formation  (paragraph  80 of the second  annual  report 
(1976))  a summary  of aid  to each  Member  State 
from  all Community  sources  would  be most  appro-
priate  in the report  of the Regional  Fund. 
9. Size  of the Fund 
9.1. Six  Member  States  submitted  applications  for 
grants  in excess  of their  respective  entitlements  and 
included  two  which  were  as high  as 143  %. In all, the 
applications  in 1976  involved  investments  of 5 342-45 
million  u.a.  and  the  decisions  reduced  the total  ap-
proved  to 4 731'73  which  fully  absorbed  the commit-
ment  appropriation.  Some  of the applications  are de-
ferred  for reconsideration  in 1977  because  of lack  of 
funds. 
9.2. It  is clear  that  the size  of the  Fund  does  not 
meet  the  demands  of the  situation  and  while  the 
Committee  learns  with  satisfaction  of the  Commis-
sion's  proposals  in respect  of the  1978  Budget,  it 
nevertheless  regrets  that  no effort  was  made,  such  as 
supplementary  vote,  to compensate  for the erosion  of 
the Fund  through  inflation  and  to meet  the urgency 
of Community  needs  in 1976  and  1977. 
Done  at Brussels,  29 September  1977. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
Opinion  on industrial  change  and  employment—a  review  of the Community's  industrial 
policy  and  future  prospects 
The opinion  of the Committee  is not based  on any  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 139th  plenary  session  held  on 25 and  26 May  1976  the Committee,  acting  on a 
proposal  from  the Bureau,  decided  to deliver  an opinion  on the abovementioned  subject 
on its own  initiative.