Proposal for a COUNCIL DECISION on the position to be taken by the Community within the Association Council established by the Europe Agreement signed on 4 October 1993 between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, with regard to the extension for a further period of five years in accordance with the provisions of Article 64 § 4(a) of the Europe Agreement with the Czech Republic

(presented by the Commission)

EXPLANATORY MEMORANDUM

Extension for a further five year period in accordance with the provision of Article 64 (4)(a) of the Europe Agreement with the Czech Republic

1. Article 64 (4) (a) of the Europe Agreement with the Czech Republic provides that, for the purpose of applying certain provisions relating to public aid, during the first five years after the entry into force of the Agreement any public aid granted by the country concerned shall be assessed taking into account the fact that the Czech Republic shall be regarded as an area identical to those areas of the Community eligible for state aid pursuant Article 87(3) (a) of the Treaty establishing the European Economic Community.

2. The period of five years referred above expired on 31 December 1996.

3. In accordance with the last sentence of Article 64 (4)(a) of the Europe Agreement, the Association Council shall, taking into account the economic situation of the Czech Republic, decide whether that period should be extended for a further five years.

4. The Czech Republic has requested the extension of the above-mentioned provision.

5. The main criterion for considering an area eligible for regional aid pursuant to Article 87(3)(a) provision is that GDP per capita should be less than 75% of the average GDP of the EU-15, measured in PPS terms [1].

[1] OJ C74 of 10.3.1998, p. 9.

6. The Commission has examined the requests on the basis of the figures and information available for the Czech Republic. The data shows that in the case of the Czech Republic GDP/capita measured in Purchasing Power Standards (PPS) reaches 63 % of the Community average in 1997.

7. Based on the above, the Commission believes that the figures available provide sufficient grounds for granting an extension to the Czech Republic, under the condition of receiving regular information on the economic situation of the Czech Republic relevant for the assessment of the application of Article 64 (4) (a), in particular regarding regional GDP per capita figures in PPS terms.

It is also necessary, in order to take due account of the differing levels of economic development, to modulate the maximum aid intensities within the different regions of the Czech Republic. To this effect, differentiation of aid intensities will have to be set up jointly by the Commission and the Czech monitoring authority on the basis of regionalised data in accordance with the provisions laid down in the Guidelines for national regional aid [2] applicable within the Community.

[2] OJ C74 of 10.3.1998

8. This extension will not be applicable to products covered by Protocol 2 of the Europe Agreements, which will be the object of a separate examination and procedure.

9. The Commission therefore requests the Council to adopt the attached proposal for a Council Decision.

1999/0247 (ACC)

Proposal for a

COUNCIL DECISION

on the position to be taken by the Community within the Association Council established by the Europe Agreement signed on 4 October 1993 between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, with regard to the extension for a further period of five years in accordance with the provisions of Article 64 § 4(a) of the Europe Agreement with the Czech Republic

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 in conjunction with the first sentence of Article 300 (2) thereof,

Having regard to the proposal of the Commission of the European Communities,

(1) Whereas the European Community and their Member States signed the Europe Agreement with the Czech Republic on 4 October 1993;

(2) Whereas Article 64 (4)(a) of the Europe Agreement lays down that the Association Council shall, taking into account the economic situation of the Czech Republic, decide whether the period within which any public aid granted by the Czech Republic shall be assessed taking into account the fact that the Czech Republic shall be regarded as an area identical to those areas of the Community described in Article 87 (3)(a) of the Treaty establishing the European Economic Community should be extended for a further five years;

HAS DECIDED AS FOLLOWS:

The position to be taken by the Community within the Association Council established by the Europe Agreement between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, with regard to the extension for a further five years in accordance with Article 64 § 4(a) shall be based on the draft decision of the Association Council annexed to this Decision.

Done at Brussels,

For the Council

The President

ANNEX

ASSOCIATION

BETWEEN THE

EUROPEAN UNION

AND THE CZECH REPUBLIC

__________

- The Association Council -

DECISION No &/99 OF THE ASSOCIATION COUNCIL

BETWEEN THE EUROPEAN COMMUNITIES

AND THEIR MEMBER STATES, OF THE ONE PART,

AND THE CZECH REPUBLIC, OF THE OTHER PART,

extending by five years the period within which any public aid

granted by the Czech Republic will be assessed taking into account

the fact that the Czech Republic is to be regarded as an area identical

to those areas of the Community described in Article 87(3)(a) of the Treaty

establishing the European Community

THE ASSOCIATION COUNCIL,

Having regard to the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part [3] and in particular Article 64(4)(a) thereof,

[3] OJ L 360 of 31.12.1994, p. 2.

Whereas Article 64(4)(a) of the Europe Agreement lays down that the Association Council shall, taking into account the economic situation of the Czech Republic, decide whether the period within which any public aid granted by the Czech Republic shall be assessed taking into account the fact that the Czech Republic shall be regarded as an area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing the European Community should be extended for a further period of five years;

Whereas the GDP/capita measured in Purchasing Power Standards reached 63% of the Community average in 1997 it is appropriate to make such an extension,

HAS DECIDED AS FOLLOWS:

Article 1

The period within which any public aid granted by the Czech Republic shall be assessed, taking into account the fact that the Czech Republic shall be regarded as an area identical to those areas of the Community described in Article 87(3)(a) of the Treaty establishing the European Community, shall be extended for a further period of five years.

Article 2

Within six months from the date of adoption of this decision, the European Commission and the national monitoring authority shall jointly evaluate, on the basis of regionalised data delivered by Eurostat, the maximum aid intensities for national regional aid in accordance with the provisions laid down in the Community Guidelines for national regional aid [4]. Thereafter, the joint proposal shall be submitted to the Association Committee which shall establish a decision to this effect.

[4] OJ C74 of 10.3.1998

Article 3

This Decision shall enter into force on the day of its adoption. It shall apply as from 1 January 1997.

Done at Brussels,

For the Association Council

The President