28. 1. 85 Official Journal of the European Communities No C 25/39 
3.5.3. In such cases, besides the carrying-out of 
checks by means of individual measurements (as 
laid down in Article 15 [2]), the emission limit values could be regarded as having been complied with 
when these weighted calculations indicate that the 
average daily value has not been exceeded. 
Done at Brussels, 21 November 1984. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
Opinion on the Commission's annual economic report 1984/85 
(85/C 25/15) 
On 7 November 1984, the Council, acting in accordance with its Decision No 120/ 
74/EEC of 18 February 1984 on the attainment of a high degree of convergence of 
economic policies of the Member States of the European Economic Community (l), as 
amended by Decision No 787/75/EEC (2), and in particular Article 4 thereof, decided 
to consult the Economic and Social Committee on the Commission's annual economic 
report 1984/85. 
The Section for Economic and Financial Questions, which was responsible for prepar­
ing the Committee's work on the subject, adopted its opinion on 13 November 1984 in 
the light of the report by Mr Pelletier. 
At its 221st plenary session (meeting of 22 November 1984) the Economic and Social 
Committee adopted the following opinion by 57 votes to 46, with 13 abstentions (vote 
recorded): 
1. Introduction 
The Committee welcomes the Commission's deci­
sion to give in its annual economic report 1984/85 a 
clear and frank picture of the Community's econ­
omic problems which are considered by it to be of 
great importance. 
The Committee notes with satisfaction that the 
Commission has adopted in its report several of the 
suggestions made by the Committee in previous 
opinions. The Committee thanks the Commission 
for this. 
After a brief review of the economic problems in 
1984 and the prospects for 1985, the Committee 
intends to comment on some basic proposals con­
tained in the Commission's report and reserves the 
right to deliver a more comprehensive opinion after 
a more thorough examination and discussion of the 
Commission's report. 
(1) OJ No L 63, 5. 3. 1974, p. 16. 
(2) OJ No L 330, 24.12. 1975, p. 52. 2. Commission forecasts of economic trends in 
1984/85 
2.1. The economy in 1984 
As regards developments in 1984 and the outlook 
for 1985, the Commission notes the following: 
The Community's economy is now on a recovery 
course; this recovery is, however, only gradual and 
remains subject to uncertainty and is clearly insuf­
ficient to bring down unemployment significantly. 
The Commission's GDP growth forecast for 1984 
has been revised upwards from the original 1,5 to 
2,2 %. 
At the beginning of 1984, industrial strife in various 
countries of the Community led to a fall-off in 
industrial production. However, since July indus­
trial production has forged ahead and is now stand-
No C 25/40 Official Journal of the European Communities 28. 1. 85 
ing at a higher level than at the beginning of the 
year. 
According to the same statistics, private and public 
consumption will rise by 1,2 and 0,6 % respectively 
in 1984, and capital formation will show a substan­
tial increase, chiefly on account of private industrial 
investment. 
Inflation has continued to slow down as a result of 
the anti-inflationary measures taken in all Com­
munity countries, and should average out at 4,7 % 
for the whole of 1984. 
The Community's balance of payments on current 
account will remain in equilibrium. 
On the other hand, unemployment will continue to 
rise, reaching 11 % in 1984. 
2.2. Prospects for 1985 
According to the Commission's forecasts there could 
be a 2,3 % rise in GDP in 1985. Inflation should fall 
to 4,1 %, domestic demand should be slightly stron­
ger (primarily on account of corporate investment) 
and unemployment is expected to rise to 11,5 %. 
These forecasts are based on the following assump­
tions: 
— world trade will continue to grow, albeit at a 
lower rate, 
— US interests rates will remain at an average level 
close to that obtaining in 1984, 
— the dollar will fall in value compared with the 
high of autumn 1984, but overall there will be a 
moderate appreciation compared with the aver­
age level for 1984. 
The Commission recognizes, however, that any fore­
casts of the rate of exchange of the dollar and of US 
interest rates are now more uncertain than in the 
past. 
The Committee therefore regrets that other hypo­
theses regarding other uncertainty factors (e. g. a 
substantial fall in the effective exchange rate of the 
dollar, the prices of raw materials, the indebtedness 
of the developing countries, etc.) have not been 
included in the Commission's report. 
3. Employment and investment problems 
3.1. The Commission informs us that in spite of an 
improvement in the economic situation, unemploy­ment continued to rise in 1984 and is expected to 
rise further in 1985, with 11,0 and 11,5% of the 
working population out of a job in 1984 and 1985 
respectively. The virtual stagnation of employment 
in the Community is both a structural and a cyclical 
phenomenon. 
3.2. The Commission also points out that utiliza­
tion of the Community's technical production ca­
pacity is already at a very high level and could quite 
quickly approach the point where increased demand 
might trigger off accelerated price rise. 
3.3. Finally, the Commission draws attention to 
the large increase in capital stock per person em­
ployed and considers that improving the efficiency 
of investment in generating output and creating new 
jobs is a crucial objective for policies designed to 
create sufficient output growth to cope with the un­
employment situation in the Community. 
4. The Committee's appraisal 
The Commission recognizes in its report that the 
problem of jobs and unemployment is both a struc­
tural and a cyclical phenomenon. And since the 
economic upturn cannot by itself solve the unem­
ployment problem, the Commission is now propos­
ing a strategy aimed at accelerating growth, reduc­
ing unemployment and slowing down inflation. 
The Commission's proposed strategy takes the form 
of a plan comprising 16 largely interdependent pro­
posals. 
The Committee notes that the Member States which 
are already broadly following the strategy recom­
mended by the Commission are those which are 
making the best economic recovery. 
The Committee notes with satisfaction that the 
Commission is directing all its efforts towards the 
two fundamental priorities of economic recovery 
and employment. 
4.1. Employment measures 
The Commission's report shows that the increase in 
the relative costs of labour in the Community has 
had an adverse effect on employment. The report 
concludes that there is a need to reverse the well-
28. 1. 85 Official Journal of the European Communities No C 25/41 
established tendency in the Community for real 
labour costs to grow faster than the real costs of new 
capital. As far as relative costs and the supply of 
jobs are concerned, the report proposes: 
— a pause in the rise in real per capita wages until 
such time as employment has been firmly put 
back on the road to vigorous growth in the 
medium term, 
— the introduction — per country, industry, firm, 
and skill level — of more clearly differentiated 
systems so as to restore a high level of employ­
ment and as high as possible an average wage 
level, 
— the linking of a significant fraction of the wage 
packet to company profits in order to bring 
about a much-needed increase in real wage flexi­
bility in the Community, 
— a reduction in taxes on employment and in costs 
arising out of labour legislation. 
According to the Commission, implementation of 
these proposals would lead to a greater supply of 
jobs and more efficient utilization of the factors of 
production. 
4.1.1. With regard to the Commission's proposals 
on employment, the Committee notes that the 
measures adopted in certain Community countries 
show that a pay pause curbs a further decline in 
employment in the short term, but leads to little or 
no growth in employment. 
4.1.2. On the other hand, there is reason to fear 
that demand will fall off if the financial sacrifices 
demanded of workers continue over a long period. 
A question that also arises is how workers are to be 
compensated for stagnation of purchasing power 
over an indefinite period. 
4.1.3. The Committee would draw the Commis­
sion's attention to the need to make sure that the 
existing system of industrial relations in the Member 
States is not disrupted; such vigilance is necessary in 
order not to aggravate the economic repercussions 
and the social and political tensions stemming from 
the present crisis. 
4.1.4. On the other hand, it must be borne in mind 
that the cost of labour is only one of the factors 
which have an impact on the economic system and 
that if costs are to be reduced and competitiveness, 
efficiency and productivity are to be increased, we 
must have policies capable of encouraging moderni­zation, reducing waste and curbing the activities of 
parasitic intermediaries and other abuses leading to 
unfair gains. 
4.2. Reduction of working time 
The Commission notes that the reduction and reor­
ganization of working patterns is a continuing fea­
ture of social progress and that under certain condi­
tions a reinforcement of this trend could bring sub­
stantial positive employment effects. The Commis­
sion stresses, however, that this requires respect for 
the conditions it has identified in its proposed re­
commendation, principally the strict avoidance of 
costs increases, especially through more flexible 
working time arrangement, and the safeguarding of 
fundamental social rights. 
4.2.1. The Committee considers that the reduction 
and reorganization of working time is both a social 
and an economic problem. It cannot therefore be 
tackled solely on the basis of an econometric model 
or solely on the basis of a sociological model. The 
problem must accordingly be left to the two sides of 
industry to solve in the countries, regions, sectors 
and enterprises where this is possible. 
4.2.2. The Committee would also refer to its pre­
vious opinions on the reduction of working time. 
5. Measures affecting firms 
With regard to firms, to Commission report pro­
poses: 
— measures to ease the tax burden in order to pro­
mote entrepreneurship, 
— a review of the laws, regulations and agreements 
affecting the business sector in order to speed up 
administrative procedures and facilitate the crea­
tion of new businesses, 
— the systematic utilization of available national 
and Community instruments, in order to make 
Europe a world force in the field of new techno­
logies, 
— the drawing-up of a medium-term trans-Euro­
pean transport infrastructure programme, so as 
to increase the trade flows between Member 
States, 
— the achievement of rapid progress in opening up 
the domestic market. 
5.1. The Committee considers that the Commis­
sion's proposed measures for the business sector are 
No C 25/42 Official Journal of the European Communities 28. 1. 85 
interesting in principle, but are also very general in 
character. Efforts should be made to draw up more 
concrete proposals in the face of what the Commit­
tee sees as a structural weakening of EEC firms' 
competitive capacity. 
The Committee would emphasize the vast diversity 
of tax provisions designed to help firms in the EEC. 
A minimum level of harmonization, to be followed 
by a Community level study of the best ways of 
encouraging an upswing in job-creating investment, 
is therefore a necessity. 
6. Measures concerning public expenditure 
The Commission states in its report that public ex­
penditure should be further curbed throughout the 
Community in the medium term, although opportu­
nities for public investment with the greatest econ­
omic and social return, having regard to the cost of 
capital, should be exploited. 
This policy should make it possible to reduce taxes 
on employment and on businesses, such reductions 
being regarded by the Commission as one of the 
major components of a strategy for stimulating 
economic recovery in the Community. 
The Commission believes that specific action needs 
to be taken in a number of Member States to rapidly 
eliminate deficits on current budgetary transac­
tions. 
In practice, spending cuts and a reduction of direct 
taxes (including charges equivalent to taxes) would 
lead to heavier indirect taxation in countries which 
have to eliminate a current budget deficit. 
Done at Brussels, 22 November 1984. The Committee considers that adequate measures 
should be taken to ensure that heavier indirect taxa­
tion does not lead to slower growth. 
6.1. The Committee believes that restrictions or 
cutbacks in public expenditure must not be allowed 
to jeopardize certain functions and services per­
formed by the State which are considered to be prio­
rities (in relation to other less necessary functions 
and services). The Committee proposes that public 
spending be curbed through the more efficient man­
agement of public funds rather than through cut­
backs in the services provided by the State. 
7. The Committee recognizes that the monetary 
policy pursued by the Community in 1983 and 1984 
has had some success in uncoupling Community 
interests rates from those in the USA. 
However, it regrets that the Commission's report is 
not more explicit about what measures might make 
the European economy still less dependent on US 
monetary policy. 
8. Given that agriculture is an integral part of the 
economy, the Committee is surprised that the Com­
mission's report makes no reference to this sector. 
9. In conclusion, the Committee notes that the 
Commission's annual economic report proposes an 
overall strategy for resolving the fundamental pro­
blems of the Community's economy. 
The Commitee has given its views on some of the 
Commission proposals, but, being subject at present 
to pressing constraints, it reserves the right to com­
ment in detail on the other proposals in the very 
near future. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
28. 1. 85 Official Journal of the European Communities No C 25/43 
APPENDICES 
to the opinion of the Economic and Social Committee 
APPENDIX I 
Voting 
A roll-call vote was taken on the opinion as a whole. The following members, present or repre­
sented, voted in favour of the opinion: 
Messrs Antonsen, Bernasconi, Berns, Binnenbruck, Brassier, Breitenstein, Broicher, Burnel, 
Cammann, Campbell, Ceyrac, De Bruyn, von der Decken, De Tavernier, Eelsen, Emo Capodi-
lista, Fortuyn, Fuller, Goris, Hemmer, Mrs Heuser, Messrs Hovgaard Jakobsen, Kenna, Kiibler, 
Law, Low, Margot, Marvier, Masprone, Morselli, Miiller, Noordwal, de Normann, Paggi, Pear­
son, Pelletier, Plank, Poeton, Querleux, Regaldo, Romoli, Schwarz, Sir George Scharp, Messrs 
Stahlmann, Staratzke, Storie-Rugh, Storm Hansen, Strauss, Swift, Tamlin, Van der Mens-
brugghe, Van Melckenbeke, Wagner, Wick, Mrs Williams, Messrs de Wit, Zinkin, Zoli. 
The following members, present or represented, voted against the opinion: 
Messrs Amato, Beretta, Boddy, Bonety, Carroll, Cavazzuti, Colle, Cremer, Curlis, Dassis, d'Elia, 
Delia Croce, Drago, Dunet, Mrs Engelen-Kefer, Messrs Etty, Flum, Hammond, Jarvis, Jaschick, 
Jenkins, Kamizolas, Kirschen, Masucci, Meraviglia, Milne, Mourgues, Murphy, Nielsen B., Mrs 
Nielsen M., Messrs Nielsen P., Nierhaus, Ognibene, Mrs Patterson, Messrs Rainero, Ramaekers, 
van Rens, Rouzier, Smith L., Soulat, Spachos, Mrs Strobel, Messrs Tixier, Vanden Broucke, Ver-
cellino, Mrs Weber. 
The following members, present or represented, abstained: 
Messrs Arena, Bagliano, de Bievre, Glesener, Mrs Gredal, Messrs Hilkens, Houthuys, Kolble, 
Lauga, Lojewski, Mrs Rangoni-Machiavelli, Messrs Spijkers, Yverneau. 
APPENDIX II 
A. Defeated amendment 
The following amendment, tabled in accordance with the Rules of Procedure, was rejected by the 
Committee during plenary session discussions: 
Point 1 and following: 
Opinion to be reworded to read: 
'The ESC considers that the 1984/85 annual economic report (COM(84) 587 final of 29 October 
1984), which has been submitted as a "Programme for European economic recovery" by the 
Commission, deals in fact with the structural aspects of the European economy. 
This underlying approach, which is borne out by sixteen detailed proposals, makes it necessary 
for the report to be examined in great detail. However, the ESC has been physically incapable of 
doing this, since the Section for Economic and Financial Questions has been in possession of the 
report for only a short time. 
The ESC has also noted that some of the 16 proposals deliberately call into question the labour 
legislation and worker protection measures in force in the Member States. 
No C 25/44 Official Journal of the European Communities 28. 1. 85 
Accordingly, the ESC is against the proposals contained in the 1984/85 annual economic report 
at the .present stage in the discussions.' 
Voting {}): 
For: 60. Against: 65. Abstentions: 7. 
Paragraph 4.1.2: 
This paragraph should be amended to read as follows: 
Two questions have to be faced, however, namely how overall purchasing power is to be main­
tained when the purchasing power of wages is stagnating and whether overall demand can be 
maintained if pay restraint continues for a long period.' 
Reasons 
Overall purchasing power is the important factor in the maintenance of the economy and 
growth. 
Compensation for past restraint depends on the future ability of the economy to pay wages. It is 
not an acquired right. 
Voting: 
For: 1. Against: a very large majority. Abstentions: 16. 
Paragraph 4.1.3: 
Delete. 
Reasons 
Economic and social policy in the various countries is carried out on the basis of democratically 
taken decisions which have to be respected by everyone. These policies must not be prejudged as 
necessarily going to have a disruptive effect on the political climate, if they are on the lines 
indicated by the annual economic report. Anyway, the political climate is permanently disrupted 
by disputes between the government and majority parties. 
Voting: 
For: 18. Against: 63. Abstentions: 18. 
B. The following passages in the Section opinion were replaced: 
Point 4, second paragraph: 
'The Commissions's proposed strategy takes the form of a plan comprising 16 largely interdepen­
dent proposals which contrast sharply with previous publications on account of their bold and in 
some cases even radical nature.' 
Point 4.1.1: 
'With regard to the Commissions's proposals on employment, the Section notes that experience 
in certain Community countries shows that, in the short term, employment levels are influenced 
to only a very slight degree by a pay pause.' 
(') See list of names in Appendix III. 
28. 1. 85 Official Journal of the European Communities No C 25/45 
APPENDIX III 
Statement of minority views 
Following the vote by name on the opinion as a whole, the members of the Workers' Group who 
had voted against the opinion or abstained declared that the overall amendment which had been 
proposed by Mr Drago and Mr Bonety and had been rejected in the course of discussions was to 
be regarded as a minority statement by the Workers' Group (see text in Appendix I — first 
amendment quoted). 
The result of the vote by name on this amendment was as follows: 
The following members, present or represented, voted in favour of the amendment: 
Messrs Amato, Bazianas, Beretta, Boddy, Bonety, Brassier, Carroll, Cavazzuti, Chalioris, Colle, 
Cremer, Curlis, Dassis, Dassoulas, De Grave, Delia Croce, Delourme, Drago, Dunet, Mrs Enge-
len-Kefer, Messrs Etty, Flum, Hammond, Hilkens, Jarvis, Jaschick, Jenkins, Kamizolas, 
Kirschen, Kitsios, Lojewski, Masucci, Milne, Mourgues, Murphy, Nielsen B., Mrs Nielsen M., 
Messrs Nielsen P., Nierhaus, Ognibene, Mrs Patterson, Messrs Raftopoulos, Ramaekers, van 
Rens, Roseingrave, Rouzier, Schneider, Schoepges, Sir George Sharp, Messrs Smith L., Soulat, 
Spachos, Mrs Strobel, Messrs Spijkers, Tixier, Vanden Broucke, Vassilaras, Vercellino, Mrs 
Weber, Mrs Williams. 
The following members, present or represented, voted against the amendment: 
Messrs Antonsen, Bernasconi, Berns, Binnenbruck, Mrs Bredima, Messrs Breitenstein, Broicher, 
Cammann, Campbell, Cashman, Ceyrac, De Bievre, de Bruyn, von der Decken, d'Elia, De 
Tavernier, Dracos, Eelsen, Elkan, Emo Capodilista, Fortuyn, Fuller, Goris, Mrs Gredal, Messrs 
Hemmer, Mrs Heuser, Messrs Hovgaard Jakobsen, Kelly, Kenna, Kiibler, Law, Low, Margot, 
Marvier, Masprone, Meraviglia, Morselli, Miiller, Noordwal, Paggi, Pearson, Pelletier, Plank, 
Querleux, Mrs Quigley, Messrs Rainero, Regaldo, Romoli, Roycroft, Schnieders, Schwarz, Stahl-
mann, Staratzke, Storie-Pugh, Storm Hansen, Strauss, Swift, Tamlin, Van der Mensbrugghe, Van 
Melckenbeke, Wagner, Wick, de Wit, Zinkin, Zoli. 
The following members, present or represented, abstained: 
Messrs Arena, Bagliano, Burnel, Kolble, Lauga, Mrs Rangoni-Machiavelli, Messrs Yverneau.