ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(82)601
Vol.1982/0190

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)601final
Brussels,15October1982
PROPOSAL FORACOUNCILDECISION
empowering theCommission tocontractloansunderthe
NewCommunityInstrumentforthepurposeofpromoting
investmentwithintheCommunity
(presentedbytheCommissiontotheCouncil)
Α/\,■'V<4 ■'•
COM(82)601final X\W|/*'sr,_./.;-/V- .\o ■ \/
' ■■

EXPLANATORY MEMORANDUM>1
'•:<%u
Investment wasatthecentreoftheEuropeanCouncil'sdeliberations
inBrusselson29and30March1982.TheEuropeanCouncilimpugnedthelow
levelofproductiveinvestmentinEurope,re-affirmedtheimportanceit
attachedtothestrengthening oftheCommunity'slendinginstruments and
requestedtheCommissiontomakeanyproposalsitdeemeduseful.In
emphasizing theneedforaco-ordinated policytopromoteinvestmentand
combatunemployment,itendorsedtheCommission'sanalyses,whichhad
revealedthatasustainedimprovement intheeconomicsituationwascon­
ditionalonasubstantial increaseintheinvestmentratiointheCommu­
nity.
Theinadequatelevelofinvestmentisattributable toamultiplicity of
factorsthatwereexaminedinarecentcommunication fromtheCommission to
theCouncil*.Prominentamongthemistheinadequacyorunsuitabilityof
theavailableformsoffinance;theCommissionhaslongbeenconsidering
waysandmeansofrectifyingthisdeficiencyandasearlyas1977proposed
totheCounciltheestablishment ofaNewCommunityBorrowingandLending
Instrument (NCI)forpromotinginvestmentintheCommunity.Theidea
behindthisproposalisthebenefittotheCommunityofusingitsstanding
intheinternational capitalmarketssoastocollectfunds,addtheseto
otherfunds,andfinanceinvestmentsinkeyareasoftheeconomy.
TheNCIwaslaunchedinOctober1978andsincethenborrowingstotalling
1000millionECUhavebeenraisedintranchesandon-lenttohelpfinance
investmentprojectsservingtheCommunity'spriorityobjectivesinthe
energyandinfrastructuresectors.^Thisnewfacilityhasproveditsworth:
itsfinancialimpactandfollow-thro"ugheffectfarexceedthevolumeoffunds
raised.AfterconsultingParliament*,theCouncildecidedthereforetorenew
it,authorizingtheCommissionin'MarchandApril1982tocontractnewloans
ofupto1000million,EQUand.to^o.ij-lendtheproceedstofinanceinvest­
mentprojectsintheenergy,infrastructure andsiitallbusinesssectors.
Thereisavigorousdemandforthis'typeoffinancing,andtheamount
authorizedisbeingused,sofastthatitislikelysoontorunout.
*CommissionCommunic]citior>^o theCouncilontheproblemofinvestment,
doc.C0M(82)365final-of8June1982.

Inview ofprevailing arid TOrea «eable economic -.circumstances ,,the
Cowmission ^inline with fcheconclusions reached bytheEuropean Council
on29and3QMarch 1982 ,considers itimperative that thefacility should
berenewed and reinforced and that itshould atthe same time beadapted
inthelight ofexperience andofpresent requirements .
Theproposed adjustments ,which concern theNCI'sceiling ,scope ,
implementation andoperational rules ,would significantly enhance itseffec
tiveness .
a)Ceiling
Asannounced initsCommunication ontheproblem ofinvestment ,the
Commission proposes topursue andexpand theaction taken under the NCI
topromote investment byseeking authorization toactivate afurther loan
tranche of3000million ECU .This amount ,which hadbeen mentioned atthe
European Council meeting inLondon inNovember 1981 ,would bereleased in
the form ofsuccessive orsimultaneous allocations that could beapplied
insome orall ofthe fields covered bythe NCI .
b)Scope
Council Decision 78/870/EECestablishing theNCIprovides that itis
tobeapplied toinvestment projects intheenergy ,industry and infrastruc
ture sectors .However ,the subsequent implementing decisions failed tomake
anymention ofindustry .When theNCI wasextended on15March 1982 ,the
Council again singled outindustry asapossible area ofintervention ,and
the Decision of26April 1982,' byexplicitly including productive invest­
ment projects ofsmall andmedium-sized undertakings among theprojects
eligible forfinancing ,ineffect made the NCIaccessible notonly to

3.
industrybutalsotoanyothersectorsuchasthedistributivetrades,
tourismandotherserviceswheresmall-scaleinvestmentsaremade.
TheCommissionconsidersthatthisavenueshouldbefurtherexplored,
anditproposesthattheNCI'scoverageremainunchanged,inorder,that
is,topermitthefinancingofprojectsintheinfrastructure andenergy
sectorsandinallproductivesectors;however,thesizeoftheinvestor
wouldnolongerbeadisqualifying factor.Itwillalsoreservetheright
toproposethat,withinthecoveragethusdefined,agivenallocationof
anappropriate amountshouldbeappliedsolelytooneparticularfield
orsector.Thedissemination ofnewtechnologies andinnovationswithout
whichtheessentialadaptationandmodernization ofproductionstructures
willbeimpossible,couldbegivenspecialtreatment.
c)Implementation ofthenewtranche
TheCommissionwouldstresstheimportanceitattachestotheprin­
ciple-firststatedinitsproposalof12June1978*-thatborrowing
andlendingoperationsshouldbeincludedinthebudget.Thisproposal
wasinfactreiteratedforthefifthtimeinthePreliminary DraftGeneral
BudgetoftheEuropeanCommunities for1983.Itisstillbeforethe
Council.TheCommissionisconvincedthatadetailedconsideration ofthis
proposalisoftheutmosturgency,andisanxiousthattheCouncilshould
rapidlyreachafavourableconclusion .Meanwhile,thepresentconsulta­
tionprocedurecontinuestoapply;pendingtheintroduction ofnew
arrangements,theCommissionfeelsthat,inordertoassociateParliament
ascloselyaspossiblewiththedevelopment anduseoftheNewCommunity
Instrument,theamountandpurposeoftheallocations shouldbedealtwith
intheframeworkoftheprocedurebeforetheCounciltakesitsfirstdeci­
sionontheallocations .Similarly,theCommissionwillinform
ParliamentatthesametimeastheCouncilofitsintentionsconcerning
theamountandpurposeofasubsequentallocation bythetimetheloans
signedunderthecurrentoneaccountfortwothirdsofitstotal.
./.
*ProposaltoamendtheFinancialRegulationof21December1977,
doc.COM(78)263finalof12June1978.

d)Operational rules
Experiencehasbroughttolightcertaininflexibilities ofoperation
inthesystem;somehavebeenrectifiedundertheco-operation agreement
betweentheCommissionandtheEuropeanInvestment Bank:witness
theintroduction ofcashholdings.However,thearticulation ofthe
Commission'sresponsibilities withthoseofitsagentcouldbeclarified
soastomaketheNCImoreeffectiveandmoreflexible.Withoutfunda­
mentallychangingthepresentdivisionofresponsibilities ,underwhich
lendingpolicylieswithinitsremit,theCommissionproposes,inaddi­
tiontoitsresponsibility fordecidingwhetherprojectsareeligible,
thatloanapplications shouldbesentsimultaneously totheCommission
andtotheBank,morefrequentregularconsultations shouldtakeplace
betweenthetwoinstitutions,andtheprinciple,alreadyrecognized,of
jointsigningofloancontractsshouldbespecifiedbyregulation.
Moreover,tostrengthentheroleoftheECUonthefinancialmarkets
whileconfirmingitspositionastheCommunity'smonetaryidentity,the
Commissionwouldliketodevelopitsuseinborrowingandlendingopera­
tions.ItintendstosetanexamplebyencouragingtheuseoftheECUin
connection withtheNCItotheutmostextentcommensurate withitssmooth
introduction onfinancialmarkets.
Theattachedproposalrespectsthegeneraleconomyoftheexisting
mechanism,whileimprovingtheefficiencyandflexibility oftheNCIin
thelightofexperience.TheCommissionwantstoassociatetheCouncil
andParliamentascloselyaspossibleintheoperationoftheinstrument,
butitisdeterminedtocontinueplayingitsownspecificroleinthe
management anddefinitionoftheCommunity'sborrowingandlendingpolicy.

Proposalfora
COUNCILDECISION
empoweringtheCommissiontocontractLoansunderthe
NewCommunityInstrumentforthepurposeofpromoting
investmentwithintheCommunity
THECOUNCILOFTHEEUROPEANCOMMUNITIES,"
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
andinparticularArticle235thereof.
HavingregardtotheproposalfromtheCommission (1),
HavingregardtotheopinionoftheEuropeanParliament (2),
HavingregardtotheopinionoftheEconomicandSocialCommittee(3),
Whereas,giventhevitalroleofinvestmentinraisinggrowthrates,
adjustingproductionstructuresand^providingalastingsolutiontotheunemploy­
mentproblem,theCommunity'slendinginstruments shouldbestrengthened
tosupport "investment,especiallyinthegrowthsectorsofthe
future;
Whereas,inordertostimulateeconomicactivityandsupportcommonpoli­
cies,thefinancingfacilityestablished byCouncil/
Decisions78/870/EEC(4)and82/169/EEC(5)empoweringthe
Commissiontocontractloansforthepurposeofpromotinginvestmentwithin
theCommunityshouldberenewedandstrengthened alongsideexistingCommu­
nityfinancialinstitutions andbodies>whosescopeshouldbewidened;
WhereasthisCommunityfacilitymakesanadditionalcontribution toinvest­
mentpromotionintheCommunityandhasarealfollow-through effectand
financialimpactfarbeyonditsapparentsize,thuspromotingtheconver­
genceofMemberStates'economictrends;
(1)OJNo.
(2)OJNo.
(3)OJNo.
(4)OJNo.L298,25.10.1978,p.9
(5)OJNo.L78,24.03.1982,p.19

Whereasplentifulfinancecanbefoundonthecapitalmarketswhich
couldbetappedtofinanceinvestmentswithintheCommunity;
WhereastheCommunityhascreditworthiness initsownrightwhichmust
beusedtobestadvantagetoreinforceEuropeansupportforthesaid
investments andtosupportpoliciesdecidedonatCommunitylevel;
WhereastheEuropeanInvestment Bankhasstatedthatitiswillingto
contributetotheimplementation ofthefacility,
HASDECIDEDASFOLLOWS:
Article 1
TheCommissionisherebyempoweredtocontractonbehalfoftheEuropean
EconomicCommunityanewtrancheofloansundertheNewCommunityInstru­
mentwhichshallnotexceedtheequivalentof3000millionECUinprin­
cipal.
Theproceedsoftheseloansshallbelenttofinanceinvestmentprojects
thatcontributetogreaterconvergence andintegration oftheeconomic
policiesoftheMemberStatesand,throughthedissemination oftechnology
andinnovationorbyothermeans,toreinforcing thecompetitiveness of
theCommunityeconomy.
TheseprojectsshallbesuchthattheyservetheCommunity'spriorityobjec­
tivesintheenergyandinfrastructure sectors,andintheproductivesec­
tor,takingaccountinteraliaoftheirregionalimpactandtheneedto
combatunemployment .
Thisfacilitymaybeusedonitsownorinconjunction withotherCommunity
financinginstruments .

3.
Article2
Theloantrancheshallbereleasedbywayofallocations.
AfterconsultingtheEuropeanParliamentabouttheamountandpurposeofeachalloca­
tionforwhichloansmaybecontracted,theCouncil,actingonaproposal
fromtheCommission,shallbyqualifiedmajorityauthorizeeachalloca­
tionandlaydownguidelinesfortheeligibilityofprojects.
TheCommissionshalldecidewhetherornotprojectsareeligibleinaccor­
dancewiththeguidelinesthuslaiddown.
TheCommissionshallborrowonthecapitalmarketswithinthelimitsof
theamountsauthorized.
Article3
Associatedborrowingandlendingoperationsshallbeexpressedinthesame
currencyunits.
Lendingtermsasregardsthereimbursement oftheprincipalandtherate
andpaymentofinterestshallbefixedinsuchawaythat,overall,they
coverthecostsandexpensesincurredinconcludingandperformingboththe
borrowingandthelendingsidesoftheoperations.
Article4
Thetermsoftheborrowingsshallbenegotiated bytheCommissioninthe
bestinterestsoftheCommunity,havingregardtotheconditionsoncapi­
talmarketsandinaccordancewiththeconstraints imposedbytheduration
andotherfinancialaspectsoftheassociatedloanstobegranted.Funds
borrowedshallbedepositedwiththeEuropeanInvestment Bank,whichshall
investthemonatemporarybasisifnecessary.
Whereasthefundsborrowedareexpressed,payableorreimbursable inthe
currencyofaMemberState,theymaybecontractedonlywiththeagreement
ofthecompetentauthorities ofthatState.
./.

Article 5
AmandateshallbegiventotheBanktograntandadminister loans
inpursuanceofthisDecision.Tothisend,aco-operation agreement
shallbedrawnupbetweentheBankandtheCommission .TheBankshall
carryoutoperations underthismandateinthenameof,fortheaccount
ofandattheriskoftheCommunity.
TheCommissionshalldecide,inaccordance withtheprovisions of
Article2,whetherprojectsareeligible.WheretheCommission
givesafavourable decision,theBankshalldecidewhetherandonwhat
termstogranttheloans,inaccordance withitsusualcriteriaandwith
theprocedureslaiddowninitsStatute.
Loanprocedureshallbeasfollows:
.Loanapplications shallbetransmitted simultaneously to
theCommission andtotheBankeitherdirectorthrough
aMemberState.
.TheCommission andtheBankshallsigntheloancontracts.
Article6
TheCommissionshallinformtheCouncilandParliament atregularinter­
valsoftherateofutilization oftheallocations andnotifythem,no
laterthanthedateonwhichtotalloanssignedamounttotwothirdsof
thecurrentallocation,ofthepurposeandamountitisintendingto
proposeforthenextallocation.
Article7
TheCommissionshallinformtheCouncilandParliament annuallyofre­
venueandexpenditure arisingfromborrowing andlendingoperations.

5.
Article8
FinancialcontrolandtheauditoftheCommission'saccountsshallbe
carriedoutinaccordancewiththeFinancialRegulationapplicableto
theGeneralBudgetoftheEuropeanCommunities .
DoneatBrussels,
FortheCouncil
ThePresident