COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC89) 440 final 
Brussels, 12 September 1989 
Amended proposal for a 
COUNCIL DECISION 
empowering the Commission to borrow under the 
New Community Instrument for the purpose of promoting 
investment within the Community 
(presented by the Commission pursuant to the 
third paragraph of Article 149 of the EEC Treaty) 
ô^tttef 
àtmmmp HBOPOSAL m» A COOTCIL BBCTSIO» 
empowering the Commission Co borrow under the 
New Community Instrument for the purpose of promoting 
investment within the Community 
(presented by the Commission under article 149, 
third paragraph of the EEC Treaty) 
(A list of the modifications is annexed to this new text; 
these are essentially the ones requested by the 
European Parliament and the Economic and Social Committee) 
2. 
EXPLANATORY MKttlgAMXJM 
The New Community Instrument (NCI) is a financial facility created in 
1978 C1) empowering the Commission (2) to borrow in the name of the Euro­
pean Economic Community and to re-lead the funds in order to promote inves­
tment in the Community* The success of the first experiment encouraged the 
use of the NCI, which has been renewed five times (including two special 
aid operations to help with reconstruction after natural desasters). The 
total volume of the NCI reached nearly 6,000 million ECU (3) in 1987. 
1. THE BASIS 
The Single European Act, referring to the "other financial instruments'* 
alongside the EIB, made clear that the Community's financial capability 
is one coinponant of the Community's institutional balance. In that 
sense, the existence of the Community alongside the EIB is above all an 
institutional necessity* Indeed, 
a) the Community as such has a vital role row to play, both as guide and 
as promoter, in the unity and the development of Europe* To this end, 
it has the obligation - which it cannot renonce - of, first, setting 
the priorities and degrees of urgency from the point of view of the 
Community's interest, especially in the economic field, and, second­
ly, of deciding among the Community measures which these priorities 
require; 
b) to carry out this fondamental task, the NCI is the appropriate 
instrument which is indispensable for the Community's purposes. 
Indeed by contrast with the other financial instruments which exist, 
the NCI can be adapted to whatever objectives are given priority in 
Community policies. 
(x) The NCI decision is based on article 235 of the EEC Treaty, which 
authorises the adoption of appropriate measures to achieve Community 
objectives where these have not been provided for elsewhere in the 
Treaty. 
(2) Council Decision 78/870/EEC 
(3) Com(88)438 final, 28.07.1988, on the use made of the NCI. 
• ••/ . • • 
3 
3. 
No doubt the most important role of the NCI is thus that of signalling 
to the market (and even to the authorities) the priorities and degrees 
of urgency of Community policies, with a vew to bringing about a lever­
age effect; the very strong demand for NCI credit is a proof in itself 
of its success* Moreover, the NCI IV set up a marker which incited the 
EIB to adopt new guidelines and techniques : it was in fact the Commis­
sion proposals which opened the way to permitting the EIB to set out, in 
a "parallel action" on it own resources, to finance investment projects 
of small and medium sized enterprises* 
Futhermore, having regard to the excellent guarantees which underlie NCI 
loans, these operations are virtually risk free and thus involve no 
budgetary cost. 
It is important to indicate, in this context, that the European Parlia­
ment has unceasingly supported the Commission's proposals concerning the 
NCI, so much so that it is now the Parliament itself which requests 
further NCI action* 
2. THE OBJECTIVES OF THE NEW NCI ACTION 
••• 
In the context of the new NCI, the general priority would again be 
SMEs* For several years one of the priority objectives of the Community 
has been the encouragement of the creation and development of small and 
medium sized enterprises, as well as the improvement of their financial 
environment* The development of such enterprises will help to spread the 
spririt of enterprise and to foster investment capable of creating 
employment• 
Putting at the disposal of SMEs credit conditions comparable to those 
available to the Community will help to overcome their relative dis­
advantage compared with large firms* It also gives them the possibility 
of building up their equity capital* It is in this spirit that the 
NCI IV was allocated entirely to SMEs* 
•/ • • • 
u-
4. 
The first of the more specific objectives which the Commission intend to 
pursue is the safeguarding of rural areas* This priority comes within a 
package of Community actions : the regulation on the reform of the 
structural Funds (*) includes among its objectives the development of 
rural areas* 
As regards rural development (2) we are in a period of important changes 
bringing about a significant decline in the relative importance of 
agriculture in rural areas, in terms of employment, of contributions to 
the regional product or of the protection of the environment. In the 
near future, this situation may well be aggravated by the effects of the 
reform of the CAP, intended to bring about certain adjustments in 
Community agriculture* 
Community action is therefore necessary in order to : 
- promote the diversification of rural economies and 
- pursue the protection of the environment* 
It is important, in particular, to promote the development of an 
economic fabric with a view to the creation and/or the stabilization of 
employment in rural areas by bringing financial help to the investments 
of SMEs - including individual entrepreneurs and co-operatives* 
All activities not of a strictly agricultural nature would be eligible 
under the NCI - including services and all ag ro- indus t r ial, 
agro-commercial, para-agricultural or other activity complementary to 
agriculture (^)* On the other hand agricultural production would be 
excluded except in so far as it concerned products in which the 
Community is not self-sufficiant or investments of a truly agricultural 
nature carried out by young farmers* 
C1) Council Regulation EEC 2052/88 
(2) Com(88)501 final : The future of rural areas. 
(3) Including forestry 
• • •/ ... 
5" 
5. 
particular importance* This is especially true in certain regions where 
the return of the population, the modernization of agriculture and the 
diversification of the activity and the style of life, pose serious 
environment problems* In this connexion, NCI finance would be available 
in parallel with other Community actions for projects of SMEs having a 
content favorable to the environment* 
From the geographical point of view, the NCI should be applicable in all 
the rural areas of the Community* 
As regard high technology and innovation, the second of the more 
specific objectives, the contribution of the NIC to SMEs, independently 
of the location of the investment, is envisaged at the level of the 
incorporation and the application of new technologies and material in 
the investment projects of SMEs• These technologies would cover a wide 
range of materials and products* In particular, the financing of 
specific applications of research results would be eligible* 
Educational and training costs would be accepted as intangible 
investments• 
This action, which would be complementary to that undertaken in the 
context of the BRITE and EURAM programmes, would fit into the logic of 
the Single Act which provides, in Title VI, for the development of 
technology, given that this remains a major challenge for Europe* 
• •/ • • • 
4 
6. 
The action envisaged must fit into a suitable time-scale. This is clear 
both from the Commission communication to the Council on the "Future of 
Rural Areas" and from the action already taken by the Community towards 
the reform of the structural Funds, which fits into a package of 
measures lasting from three to five years. As regards high technology, 
the Community's action programmes also extend over a long period. In 
consequence, a financial mechanism which accompanies such measures 
should have a long life, especially since, in a rural context, the 
leverage effect on markets may prove to be slow. 
3. METHOD 
Borrowing 
For the Community's financial capability to carry out its basically 
political task (by contrast with that of the EIB) of signalling 
Community priorities, and in order to maintain a permanent institutional 
balance, it must keep up a continuous and stable presence in the 
markets. This means abandoning the traditional formula of successive 
authorizations, in favour of a method under which the Commission would 
be empowered to carry out new borrowing and lending operations within 
the limit of repayments of existing debt; this would represent new 
borrowing of 500 to 1.000 million ECU per year. The effect would be to 
convert the NCI into a "revolving fund", with the Commission being 
automatically empowered to borrow and re-lend up to the limit set up by 
the amount of debt outstanding, which will total 5.4 billion ECU at the 
end of 1989. 
The recurrent nature of operations under the new method will help to 
raise the Community's profile in the markets and ensure that its calls, 
coming regularly and for roughly the same amount each time, are well 
received. This will foster the growth of a regular clientele and hence 
keep down issue costs. 
••/••• 
7. 
Moreover the proposed revolving method offers the advantage of clarity, 
in that the total debt is capped - successive tranches no longer being 
cumulable. At the same time it avoids the apparance of gaps, such as 
that which has emerged at the present time with the rapid exhaustion of 
the NCI IV, leaving an unsatisfied demand while awaiting a new 
authorisation. 
At the end of the first three years, the Commission will review the 
working of the system and will submit a report of its review to the 
Council, the European Parliament and the Economic and Social Committee; 
fresh priorities could also be set on that occasion. 
Loans 
Given that the investments in question are of modest size, the loans of 
the new authorization could be granted by the well tried method of 
global loans. This allows, not only to distribute the resources 
available to a large number of enterprises, but also to cut out the risk 
of default, in view of the excellent guarantees provided by the 
intermediaries. 
The techniques of financial engineering should be used as a way of 
supporting projects more efficiently. One could envisage, amongst other 
possibilities, to : 
a) promote the transformation of global loans into equity in the context 
of high technology and innovation; 
b) couple the NCI with a mechanism to give repayments which increase 
over time; 
c) improve the guarantee conditions for these investments; this would 
mean, for example, close collaboration with guarantee organizations; 
d) include the possibility of making loans, in appropriate 
circumstances, at floating rates; 
e) encourage the finance of projects through risk-capital operations by 
using an appropriate combination of equity and long term loans. 
/... 
S 
8. 
The new NCI would have the additional function of helping to "recycle" 
balance of payments surpluses* It is desirable for the currencies of 
surplus Member States to be included to an appropriate degree in the 
basket of currencies used to finance projects situated in the deficit 
countries• 
To increase the efficiency of the instrument, the NCI - and particularly 
the "rural" NCI - will be closely associated with the other Community 
instruments, especially the structural Funds and the EIB. 
9 
COUNCIL DECISION 
empowering the Commission to borrow under the New Community Instrument 
for the purpose of promoting investment within the Community 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing 
the European Economic Community, and in 
particular Article 235 thereof, 
Having regard to the proposal from the 
Commission (*), 
Having regard to the opinion of the 
European Parliament (*), 
Having regard to the opinion of the 
Economic and Social Committee (-*), 
Whereas the Community's investment 
financing facilities should continue to 
operate, with a view to correcting 
structural shortcomings in the produc­
tion system so as to increase investment 
and thereby stabilize employment; 
Whereas the borrowing authorized by the 
Council in Decision 87/182/EEC (*) has 
been fully accounted for by the amount 
of loans granted under the New Community 
Instrument; 
Whereas it is necessary to continue and 
to strengthen action under the New 
Community Instrument, as last defined by 
Decision 87/182/EEC, to assist small and 
medium-sized enterprises; 
Whereas such action helps to achieve the 
Community's objectives in respect 
of employment in rural areas and the 
diversification of the economy in these 
areas through investment projects which 
are not of a strictly agricultural 
nature; and whereas such action also 
helps to protect the environment; 
Whereas it is vital in order to 
strengthen the Community's technological 
base and industrial competitiveness to 
encourage the innovative capacity of 
undertakings; 
(*) OJ No C 
(2) OJ No C 
(3) OJ No C 
(4) OJ No L71, 14.3.1987, p.34 Whereas investment by small and medium-
sized undertakings involving the appli­
cation of new technologies and innova­
tion has features which raise special 
financing problems; 
Whereas special financing arrangements 
should consequently be provided for to 
deal with such problems, in particular 
by extending the financing base and by 
encouraging the supply of equity 
funding; 
Whereas the New Community Instrument can 
help to recycle certain countries' 
balance of payments surpluses for use by 
deficit countries; 
Whereas the Commission should therefore 
be empowered to borrow and whereas the 
amounts borrowed should make it possible 
to stabilize the total stock of debt 
outstanding under the New Community 
Instrument at its present level; 
Whereas, at the end of a period of three 
year s following the entry into force of 
this Decision, it will be necessary to 
examine the objectives of the New 
Community Instrument; 
Whereas the European Investment Bank 
(hereinafter referred to as the 'Bank') 
has stated that it is willing to contri­
bute to the implementation of this 
measure, and to take responsibility for 
managing the cash holdings for carrying 
out the lending operations, it being 
understood that the discharge and audit 
procedures shall be those provided for 
in the Bank's Statute in respect of all 
its operations; 
Whereas the Treaty establishing the 
European Economic Community has not 
provided the necessary powers for a 
Community action in this field needed to 
attain, in the course of the operation 
of the common market, one of the 
objectives of the Community; 
Jo 
HAS DECIDED AS FOLLOWS : 
Article 1 
The Commission shall be empowered to 
borrow, on behalf of the European 
Economic Community under the New Commu­
nity Instrument, amounts which make it 
possible to maintain the total stock of 
debt outstanding under this instrument 
at its present level, in principal, 
having regard to the repayments of 
capital on existing borrowings* 
Article 2 
The proceeds of the borrowings referred 
to in Article 1 shall be on-lent to 
finance investment projects that contri­
bute to the industrial adjustment and 
the competitiveness of the Community* 
These projects, to be carried out in 
Community territory, must be such that 
they serve the Community's priority 
objectives relating to the financing of 
investment by small and medium-sized 
undertakings* 
Article 3 
The Commission shall decide whether or 
not projects are eligible in accordance 
with the following priorities and guide­
lines : 
- the investment projects of small and 
medium-aized enterprises in industry 
and other productive sectors, in 
particular with a view to the applica­
tion of new technologies and innova­
tion (including renewable sources of 
energy) shall be eligible; the 
projects of small enterprises shall 
have priority; 
- the investment projects of small and 
medium-sized enterprises, situated in 
rural areas, shall be eligible; these 
projects must help to protect the 
environment or not be of a strictly 
agricultural nature and create jobs* These priorities shall be laid down for 
a period of three years from the entry 
into force of this Decision. For 
subsequent periods, the Commission will 
propose the priorities to be observed* 
Projects and their implementation shall 
comply with the provisions of the Treaty 
and of secondary legislation, in 
particular provisions relating to 
competition, and with the rules and 
requirements of the relevant Community 
policies• 
Article 4 
Loans shall generally be granted through 
the agency of financial intermediaries* 
In certain bordereline cases, however, 
they may be made directly to the 
recipients• 
Whatever the procedure for granting 
loans, capital and interest payments may 
be deferred* Loans may also be used to 
finance intangible assets such as 
patents, licences, know-how, and 
research and development expenditure 
directly linked to the investment 
concerned* 
Where they are granted through the 
agency of a financial intermediary, that 
intermediary may, with the agreement of 
the Bank, pass the loan on to under­
takings either in the form of a loan or 
in the form of equity capital* In both 
cases, the intermediary shall be 
responsible for the service of the loan 
and associated risk. 
Article 5 
Lending terms as regards the 
reimbursements of the principal and the 
rate and payment of interest shall be 
those applied by the Bank, in accordance 
with its Statute in respect of loans 
from its own resources, and shall be 
fixed in such a way that, overall, they 
cover the costs and expenses incurred in 
concluding and performing both the 
borrowing and the lending side of the 
transactions* 
A-
Article 6 
The terms of borrowings shall be négo­
ciât eu by the Commission in the best 
interests of the Community, having 
regard to the conditions on capital 
markets and in accordance with the 
constraints imposed by the duration and 
other financial aspects of the loans to 
be granted. The borrowed funds shall be 
entrusted to the Bank, which shall 
manage them in the manner agreed with 
the Commission under the terms of the 
existing co-operation agreement* 
Borrowing and lending operations shall 
be expressed in the same monetary units, 
and to ensure adequate coverage the 
Commission may carry out "swap" 
operations provided that there is no 
resultant exchange or interest rate risk 
for the Community* 
Article 7 
A mandate shall be given to the Bank to 
grant and administer loans in pursuance 
of this Decision* The Bank shall carry 
out transactions under this mandate on 
behalf of the Community, whilst 
exercising the same diligence as for the 
operations carried out with its own 
resources. - the Commission and the Bank shall sign 
the loan contracts with the primary 
borrower, viz the financial interme­
diary in the case of a global loan, or 
the beneficiary in the case of a 
direct loan, 
- the Bank shall inform the Commission 
of the allocation of the loans* 
Article 8 
The Commission shall annually inform the 
European Parliament and the Council of 
capital receipts and payments resulting 
from borrowing and lending transactions* 
To this end the Bank shall forward to 
the Commission any data required for the 
European Parliament and the Council to 
be fully informed* 
Article 9 
Three years after the entry into force 
of the present Decision the Council 
shall examine, on the basis of a report 
by t'ie Coounission and after consulting 
the European Parliament and the Economic 
and Social Committee, whether the 
objectives and priorities of the New 
Community Instrument should be changed* 
Article 10 
The Commission shall decide, in accor­
dance with Article 3, whether projects 
are eligible. Where the Commission gives 
a favourable decision, the Bank shall 
decide whether and on what terms to 
grant the loans, in accordance with its 
usual criteria and with the procedures 
laid down in its Statute and in the 
co-operation agreement* 
Loan procedure as provided for in this 
Decision shall be as follows : 
- loan applications shall be transmit­
ted simultaneously to the Commission 
and to the Bank by the primary borro­
wer, The financial control and audit of the 
Commission's accounts shall be carried 
out in accordance with the Financial 
Regulation applicable to the general 
budget of the European Communities and 
with the Treaty instituting the European 
Economic Community* 
The lending transactions and management 
of cash holdings shall be covered by the 
discharge and audit procedures provided 
for in the Bank's Statute in respect of 
all its operations* 
Done at Brussels, 
M 
CM 
AHBiUntre TO THE PROPOSAL FOR A COUNCIL DECISION 
empowering the Commission to borrow under the New Community Instrument for the purpose of 
promoting investment within the Community (COM (88) 661 final - revised version I) ANNEX 
Text to be amended Proposed amendment Comments 
Draft decision 
COUNCIL DECISION OF empowering 
the Commission to borrow under the New Community 
Instrument to srahlHav the level of debt 
outstanding for the purpose of promoting 
investment in the Community; 
tfiereas loan applications already approved by the 
Commission account for over 87% of the borrowing 
authorized by the Council in Decision 87/182/EEC 
(4) and over 97% of the cumulative total of 
all authorizations to date; 
Wnereas the Commission should therefore be 
empowered to borrow snownts enabling It to 
maintain the level of debt outstanding under the 
Hew Community Instrument at Its present level of 
5,865 million BCD; COUNCIL DECISION of empowering 
the Commission to borrow under the New Community 
Instrument for the purpose of promoting Investment 
within the Community; 
the borrowing 
Decision 87/MB/UC (4) 
for by the amount of by the Council in 
been fully accounted 
granted under the New 
the Commission tfk**nH therefore be empowered 
to borrow and whereas the amounts borrowed should 
make it possible to stabilise the total stock of 
debt outstanding under the New Community Instrument 
at its present level; The Act's title is simplified 
and brought into line with 
the title of the communica­
tion (orig* FR). 
The second recital is brought 
up to date* 
In order to Improve the 
presentation of the argu-
i9 the third recital 
the ninth; the 
recital is brought up to date 
with no change being made 
to the substance* 
- 2 -
Text to be amended Proposed amendment Comments 
Vhereas action under the New Community 
Instrument, as last defined by Decision 
87/182/EEC, should for the next three years 
continue to be concentrated in favour of small 
and medium-sized enterprises; 
Vhereas such action will help to achieve the 
Community's objectives regarding the reversal of 
the exodus from rural areas and concerning the 
development of these areas; 
Enacting terms 
Article 1 
The Commission shall be empowered to borrow, on 
behalf of the European Economic Community under 
the New Community Instrument, amounts enabling 
It to maintain the level of debt outstanding 
under this facility at 5,865 million ECU in 
principal, having regard to the flow of 
repayments of principal on existing borrowings* Vhereas it is necessary to continue and to strengthen 
action under the New Community Instrument, as last 
defined by Decision 87/182/EEC, to assist small and 
medium-sized enterprises; 
,, at the end of a period of three years 
following the entry into force of this Decision, it 
will be necessary to eramln* the objectives of the 
New Community Instrument; 
such artlffw help* to achieve the Community'a 
objectives in respect of employment in rural areas 
and the dfr'WTfff 1**^T****^ of the economy in these areas 
through investment projects which are not of a 
strictly agricultural nature; sod uhereas such 
action also helps to protect the environment; 
can help to 
of recycle 
sur pi the sew Community 
certain countries' halanr*» 
for use by deficit countries; 
Article 1 
The Commission shall be empowered to borrow, on behalf 
of the European Community under the New Community 
Instrument, amounts which make it possible to maintain 
the total stock of debt outstanding under this 
instrument at its present level, in principal, having 
regard to the repayments of capital on existing 
borrowings* For the same purpose the 
fourth recital is slightly 
amended whithout affecting 
the substance* 
For the sake of precision, 
the phrase in the fourth 
recital "for the next three 
years" is developed to 
become the tenth recital* 
Recital brought into line 
with the text of the 
enacting terms* 
Eighth recital incorporating 
the idea introduced in the 
explanatory memorandum, 
page 5. 
Article corrected in terms 
of language and brought 
up to date* 
^ 
- 3 -
Text to be amended Proposed amendment Comments 
Article 2 
The proceeds of the borrowings referred to in 
Article 1 shall be on-lent to finance investment 
projects that contribute to the structural adjust­
ment and the competitiveness of the Community; for 
a period of three years following the entry into 
force of the present decision, such projects shall 
be directed towards the application of new 
technologies and innovation or the stabilization 
of employment in rural areas; thereafter the 
Commission shall determine the priorities to be 
applied* 
These projects, to be carried out in Community 
territory, must, where appropriate, be such that 
they serve the Community's priority objectives 
relating to the financing of investment by small 
and medium-sized undertakings* 
Article 3, second indent: 
- the investment projects of small and 
medium-sized enterprises in rural areas, aimed 
at safeguarding the environment or stabilizing 
employment likely to be lost in agricultural 
activities, shall be eligible; Article 2 
The proceeds of the borrowings referred to in 
Article 1 shall be on-lent to finance investment 
projects that contribute to the industrial 
adjustment and the competitiveness of the 
Community* Amendment requested by the 
European Parliament* 
These projects, to be carried out in Community 
territory, must be such that they serve the 
Community's priority objectives relating to the 
financing of investment by small and medium-sized 
undertakings. 
- the investment projects of small and medium-sized 
enterprises, situated in rural areas, shall be 
eligible; these projects must help to protect the 
environment or not be of s strictly agricultural 
nature and create Jobs; 
Article 3, second paragraph (new) 
These priorities shall be laid down for a period 
of three years from the entry into force of this 
Decision. For subsequent periods, the Commission 
will propose the priorities to be observed* Attendaient requested by the 
Economic and Social 
Committee* 
tore precise wording* 
intendment requested by the 
European Parliament* 
- 4 -
Text to be amended Proposed amendment Comments 
Article 4 
iiOans shall for the first three years generally 
be granted through the agency of financial 
intermediaries* In certain limited cases, 
however, they may be made directly to the 
recipients• 
Article 6, third paragraph 
Where borrowings are expressed, payable or 
reimbursable in the currency of a Member Sate, 
they may be concluded only with the agreement of 
the competent authorities of that State* 
Article 9 
Three years after the entry into force of the 
present decision the Council shall examine, on the 
basis of a report by the Commission and after 
consulting the European Parliament, whether the 
objectives and priorities of the New Community 
Instrument should be changed* Article 4 
Loans shall generally be granted through the agency 
of financial intermediaries* In certain borderline 
cases, however, they may be made directly to the 
recipients• 
Paragraph deleted Brought into line with the 
explanatory memorandum* 
Amendment requested by the 
Economic and Social 
Committee • 
Article 9 
Three years after the entry into force of the present 
Decision the Council shallexamine, on the basis of a 
report by the Commission and after consulting the 
European Parliament and the Economic and Social 
Committee, whether the objectives and priorities of 
the New Community Instrument should be changed* Amendment requested by the 
Economic and Social 
Committee* 
A 
- 5 -
Text to be amended Proposed amendment Comments 
Explanatory memorandum 
page 6, first paragraph: 
Moreover, as regards high technology, the average 
life of research projects is four years* In 
consequence, an NCI action designed to accompany 
such measures should have a long life, especially 
as, in rural context, the leverage effect on 
markets may prove to be slow* 
page 6, second paragraph, last sentence: 
The effect would be to convert the NCI into a 
"revolving fund", with the Commission being 
automatically empowered to borrow and re-lend up 
to the limit set up by the amount of debt 
outstanding, currently around 5.8 billion ECU* 
page 7, first paragraph: 
After three years, the Commission will review 
the working of the system; fresh priorities could 
also be set on that occasion* 
Page 8: 
(new alinéa to insert)* As regards high technology, the Coomunity's action 
also extend over a long period* In 
t, s financial mechanism which accompanies 
such measures should have a long life, especially 
since, in a rural context, the leverage effect on 
markets may prove to be slow* 
The effect would be to convert the NCI into a 
"revolving fund", with the Commission being 
automatically empowered to borrow and re-lend up to 
the limit set up by the amount of debt outstanding, 
which will total 5.4 billion KO at the end of 1989. 
At the end of the first three years, the Commission 
will review the working of the system and «HI 
Willir s report of its review to the Council, the 
Européen Par 11 snaut and the Economic and social 
Committee; fresh priorities could also be set on 
that occasion* 
The new NCI mould have the additional function of 
helping to "recycle" halanre of payments 
surpluses* It is desirable for the currencies of 
surplus Member States to be Included to an 
appropriate degree in the basket of currencies used 
to finance projects situated In the deficit 
countries* Improvement to the text 
with no effect on the 
substance* 
The text is brought up to 
date* 
The exaplanatory memorandum 
is brought into line with 
the amendment to the 
enacting terms requested 
by the Economic and Social 
Committee • 
Non-binding addition 
resulting from the talks 
with Member States* 

ISSN 0254-1475 
COM(89) 440 final 
DOCUMENTS 
EN 01 
Catalogue number : CB-CO-89-397-EN-C 
ISBN 92-77-52831-1