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Vol.1978/0018

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COM(78)52final
February1978
ACTION
Coin CommunicationCouncil)
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CONTENTS
Page
INTRODUCTION I
CHAPTERA:CONVERGENCE OPTHEECONOMIES 1
I.Convergence 1
il.i'onitorin,~achievements anddivergences 3
III.Strcn.-lhenin ,?thecoordination ofshort–tern 3
economicpolicies
IV.Thereturntomonetarycohesion 5
V.Investmentand"borrowing 7
CHAPTERB;TTIESINGLEMARKET 8
I.Establishment ofasinglemarket 8
II.Freemovementofgoodsandservices 10
A.Customsunion 10
B.Removaloftechnicalbarrierstotrade 11
C.Commonmarketforservices 12
D.Publiccontracts 13
E.Liberalization ofcapitalmovements 13
P.Removalofmonetarycompensatory amounts 13
inagriculture
III.Harmonization 14
A.Taxharmonization 14
B.Companylaw 15
C.Mergercontrol 15
CHAPTERC:STRUCTURAL POLICIES 16
I.Policyformdustrial change 16
A.ContinuingtheCommunitypolicyof 17
industrial intervention
B.Growthsectors 19
C.Development ofCommunityinstrumentsforapolicy
ofindustrial change iq
II.Ener/^ypolic.y 19a
A.Energyindependence 19a
B.Commonenergymarket 20
C.Financialinstruments 20

III »A.^rioulturnl structure policy 21
IV.Régional polic.y 21
v.Investment policy 22
A.Investment aidpolicy 22
B. Investment innon–member countries 23
C.Public investment 23
CHAPTER ft SOCIAL POLICY 24
I*Employment policy 25
A.Employment ofyoung people 25
B.Labour market 25
C.Economic andsocial problems linked 25
toemployment
II.Incomes andworking conditions 25
A. Income scales 25
B. Improved working conditions
III.Social protection andsocial security 26
IV.Worker participation 26
Annex :Further measures putforward intheAction Programme for197°

I
INTRODUCTION
TheCommissionpresentedaCommunication totheEuropeanCouncilmeeting
on5and.6December1977outliningtheprospectsforeconomicand
monetaryunion.TheHeadsofGovernmentreactedfavourablytothe
Communication ,whichcontainedproposalsforafive-yeareconomicand
monetaryactionprogramme ;thedetailswouldbesetoutinannual
sectionsandregularcheckswouldbemadeatthehighestpoliticallevel
toensurethati,twasimplemented .Thefollowingpaperpresentsthe
broadlinesoftheprogrammefor1978.
Thesebroadlinesarepartofanoverallplantopavethewayforeconomic
andmonetaryunionwhileatthesametimeattemptingtocomeupwith
lastingsolutionstotheEuropeaneconomiocrisis.
TheCommission intendstolaunchanattackonthreemainfronts:
(i)increasedconvergenceofeconomiesandeconomicpolicies;
(ii)progressinthecreationofasinglecompetitivemarket;
(iii)developmentofCommunitystructuralandsocialpolicies,from
boththesectoralandtheregionalpointofview.
*
* *

II
Theconvergence ofeconomies isacondition ofprogress towards European
integration .Itrequires areturn tostable prices and "balanced growth
andaconcomitant improvement intheemployment situation .Toachieve this
thecoordination ofshort-term economic policies must take onanewdimension ,
tobocomo more realistic inpractice andwider inapplication .
TheCommission will therefore concentrate onworking towards acloser
coordination ofmonetary andbudgetary policies andthere-establishment ofmonetary
cohesion within theCommunity .Itwould also urge theCouncil toact
aspromptly aspossible ontheproposal foradecision setting
upanew Community borrowing and lending instrument .
*
With regard totheachievement ofasingle Community market –astep
towards integration ,agrowth factor and aguarantee against the
temptations ofprotectionism –theCommission trusts that theCouncil
will in1973 make full use ofthepolitical stimulus provided bythe
last European Council byadopting anumber ofproposals nowbefore it,
particularly those relating totaxharmonization ,theelimination of
technical barriers totrade and theopening ofpublic contracts to
competitive bidding .
Inorder topromote thefree movement ofgoods within the Community
steps should betaken inthecourse oftheyear toencourage greater
harmonization ofcustoms regulations inrespect ofboth internal and
external Community trade .

k.il
I
jS
III
Thecontinued andlarge-scale development ofCommunity policies inthe
structural -"bothregional andsectoral -social andemployment fields
cannot bedissociated fromtheefforts thattheMember States arebeing asked to
maketobring about agenuine convergence oftheir economies andeconomic
:9S>Sothatinthemonths ahead astart maybemadeinthisdirection ,
theeffect &orwhich will beTelt only progressively inthecourse ofthe
five-year action programme ,theCommission would asktheCouncil totake
decisions assoon aspossible ontheproposals concerning :
(i)therégional policy ar»3 : *una ;
^.ujustment ofthe socio –structural measures inagriculture ;
(iii)agricultural andstructural measures infavour oftheMediterranean
regions ;
(iv)theCommunity approach tosectoral problems .
*
i
* *
Thepriority guidelines ofthe1978 action programme aredescribed inthe
following chapters ,which list proposals already presented ,onwhich the
Council isasked totake adecision asamatter ofurgency inthecourse
oftheyear ,andpoint outother urgent matters vhich theCommission
will deal with .
Each chapter starts with ageneral introduction .This will serve toguide the
discussions atthedifferent Council meetings which will deal with the
relevant proposals (Foreign Affairs ,Social Affairs ,Agriculture ,Economic
andFinancial Affairs ,Energy andsoon).
Theprogramme asawhole constitutes acoherent framework foraction bythe
Member States andtheCommunity tosupport theeconomy ,todeal with structural
problems andtolead Europe outofthecurrent crisis .Itwill help provide
thefoundation onwhich tobuild aneconomic andmonetary union ,tobeconstructed
asprogress ismade inthe different fields .

IV
Ifthis programme isto "beimplemented satisfactorily ,itmust "bemonitored
throughout andgiven effective political backing ;inaddition theEuropean
Council should carry outageneral review attheendofeach year .It
will also necessitate close cooperation with both sides ofindustry .
The Commission asks the Council :
(i)toendorse thebasic ,principles outlined inthis 1978 action programme
(ii)totake thedecisions necessary toensure that itisimplemented
inaccordance with theproposed timetable ,

CHAPTER A:CONVERGENCE OFTHEECONOMIES
I. CONVERGENCE
(a)Thefive-year action programme proposed "bytheCommission mits
Communication ontheProspect ofEconomic andMonetary Union is
designed toachieve lasting convergence between Member States *
economies ,and itwill involve :
(i)thedefinition ofcommon macroeconomic targets : "bringing
inflation under control ,restoring growth ,employment targets ;
(ii)thedeployment atmacroeconomic andstructural levels ofoperational
instruments toprovide effeotive assistance intheachievement of
these targets ;
(iii)anappreciably closer alignment oftheperformances ofour
economies ,including stabilization ofprice trends
ineach ofthe countries ofthe Community atasatisfactory level as
rapidly aspossible during theperiod .
(b)Itisofoverwhelming importance that theeconomies oftheMember
States should bemade todevelop onconvergent growth paths .
(i)Without such convergence ,theCommunity 'spast andpresent
achievements canneither beconsolidated nor strengthened ;
(ii)given thedegree ofintegration achieved ,convergence will also
beakeyfactor inimproving theeffectiveness ofnational
growth and employment policies ;
(iii)lastly ,thereturn toconvergent growth paths will allow of
progress towards economic andmonetary integration
within Europe .

(c)AllMemberStateshavethesamegrowthand,employmentproblems
tocontendwith;althoughtheyaresubjecttodifferentconstraints
withregardtoinflationandthebalanceofpayments,the
interpenetration oftheeconomiesissuchthateachofthecountries
stronglyinfluencesandisstronglyinfluencedbyeconomicdevelopments
intheothers.
Thecoordination proceduresestablished undertheDecisionof
18February1974reflectthisstateofinterdependence andits
impactonthenationalpolicies.
TheCommissionfeels,however,thatcurrentpracticehasnotproved
dynamicorefficientenoughtoensurethatthemeansandmethodsfor
achievingtheobjectivesjointlyagreedareproperlyandadequately -
relatedtotheobjectivesthemselves.Consequently ,itasksthatthe
Councilfocusitseffortsduring1978onstrengthening coordination
mechanisms.
Quiteapartfromintegrationobjectives,theobjectivesituationofthe
Europeaneconomywarrants:
(i)anextensioninthescopeofcoordination ;
(ii)amorepurposivedemonstration ofpoliticalwillintheapplication
ofpresentprocedures.
*
Therightwaytoturntobestaccountthebenefitsaccruingfrom
thelargemarket,thushelpingtodispeltheuncertainties nowover­
shadowingeconomicdevelopmentintheCommunity,istoestablish
objectivesbyjointagreementandtoimplementmacroeconomic and
structuralpolicieswhicharenotonlymutuallycompatiblebut
whichalsoservetostrengtheneachother*seffects.
Thismeansthat,startingin1978»theCommunitywillneedtomake
substantial headwayinthefollowingfourfields.

-3-
II.VO.*.TTORTITOACHISVEMENTS ANDPIVERGENCE5
Extcrionco h;inshownthatthedegreeofcontrolexercisedduring
therelevantperiodsonprogressmadetowardsachievingthetargets
jointly .-.greedatthethreeministerialsessionsdevotedtoexamination
oftheeconomicsituationisinadequate.Asof1978,suchprogress
should "beproperlymonitored "betweensessions.
Inthisconnection,theCommission "believesthattheroleofthe
Coordination Committeemustbeclarifiedandstrengthened .
TheCommitteeshoulddowhatitcan:
(i)tomaketheconsultationsleadinguptomajornationaldecisionsoneconomicpolicyanessentialandvaluablepreliminaryintermsofCommunity
compatibility andconsistency }
(ii)checkregularlyontheimplementation ofthepolicies;
(iii)select,inbothcases,themattersthat,onaccountoftheirimportance
andurgency,shouldbeforwardedtotheCouncilforexamination.
III.STRENGTHENING THECOORDINATION OFSHORT-TERM ECONOMICPOLICIES
(a)ForeachMemberState,themacroeconomictargets-asjointlyagreed-
cannotbeachievedunlesstherightbudgetary,monetaryandexchange-rate
policiesareworkedoutandexecuted,andtheeffectiveness ofthesepolioies
willdependon:
(i)theextenttowhichtheyareproperlyrelatedtothefinaltargets
selected,and
(ii)toavaryingbutnevernegligibleextent,thebehaviourofthe
otherMemberStates.
Underthecircumstances ,theCommissionurgestheCounciltorefine
andactivatethepresentcoordination procedures ,intwomajorrespects:
(i)analysisofthelinksbetweenthegrowth,priceandbalance-of-paymenis
targetsandthemonetaryandbudgetarypoliciespursuedforthis
purpose;
(ii)monitoringofthecompatibility ofthesepoliciesfromaEuropean
angleandtheestablishment ofwaysandmeansofcorrecting
short-termpolicymeasureswhich,onaccountoftheexternal
implications ,wouldruncountertotheobjectivespursuedbythe
Communityasawhole.

-4-
(b)While notwishing tointerfere with thesubstance oftheCouncil
Decision of18February 1974 ontheattainment ofahigh degree of
convergence oftheeoonomic polioies oftheMember States ,the
Commission does intend inthis way totake measures toensure that
itwill beimplemented inamore effective manner .
InOctober 1977 »itaddressed totheCouncil aCommunication onthe
improvement ofthecoordination ofshoit-term economic policies ,now
before thespecialized committees ,which areexpected tomake known
their views atsome time before the end ofMarch .
(c)Themain concern istoremedy anabnormal situation :the
coordination ofnational monetary policies has sofarlagged behind
thecoordination ofbudgetary policies ,thequantitative guidelines
forwhich have been regularly fixed bythe Council for anumber of
years already .
During 1978 »theCommission therefore plans tocontinue thework started
inclose collaboration with the Committee ofGovernors ofthe Central Banks
andtheMonetary Committee ,andthus toestablish ways andmeans whereby
substantial progress could bemade with aview to:
(i)reinforcing contacts between theCommission andthemonetary
authorities oftheMember States andensuring ,inparticular ,that
more information ismade available onthevarious monetary policies
and their interaction when theguidelines forthese policies are
fixed ;
(ii)analysing ,thecompatibility ofnational monetary policies from the
Community viewpoint andensuring that they areconsistent with the
joint general objectives ;
(iii)monitoring theimplementation ofthese policies through regular
examinations .
Onthebasis ofitsownwork andtheopinions ofthecommittees concerned ,
theCommission will submit itsfindings andfinal proposals tothe
Council ofMinisters .

-5-
(a)TheCommission also attaches great importance toimproving the
instruments for coordinating budgetary policies .Ittherefore
requests theCouncil toproceed this year to:
(i)theintroduction ofquantitative guidelines fortheuseorfinancing
of "budget surpluses /deficits .These indications will enable the
interaction "between "budgetary andmonetary policies to "beassessed :
the "monetary "financing of "budget deficits represents acounterpart
tothemoney supply which isoften onalarge scale ;
(ii)thedefinition ofqualitative orquantitative data asthefirst stage
inextending the scope ofthe "budgetary guidelines toinclude the
whole ofthepublic sector .These data will provide aclearer
picture ofthegrowing importance ,atmacroeconomic level ,ofpublic
authorities other than the central authority ;
(iii)thecompiling ofdata illustrating thescope foradapting the
"budget surpluses ordeficits inthe light ofthemedium-term
growth path deemed appropriate .Alink would thus beforged
between theshort-term andthemedium-term programme ,andadefinite
reference status would thus beconferred upon thelatter .
Onthebasis oftheprogress made with thehelp oftherelevant committees ,
opportunities forimprovement will beexamined when thebudgetary guidelines
for1979 arefixed (inJune 1978 )«
IV.THE RETURN TOMONETARY COHESION
Improved convergence and closer coordination ofshort –term economic
policies would enable thedanger ofstrain within the snake tobereduced and

wouldmakeitpossibletobeginworkingtowardssomemeasureof
stabilization ofexchangeratesbetweenthesnakecurrenciesandthe
otherCommunitycurrencies,withaviewtomoreorderlyexchangerate
relationships atCommunitylevel.Financialsolidaritymachinery
shouldsufficeforthispurpose,exceptthatconditionality arrangements
shouldbetightenedup. .
(a)Establishment ofcoherentexchangeraterelationships
Inpresentcircumstances ,theCommissionisoftheopinionthatevery
effortshouldbemadetopreserveandstrengthenthesnake,whichis
notonlyvitaltoeconomicandmonetarycohesionbutalsoaschemeto
whichitmaybehopedthatthefreelyfloatingcurrencieswillone
daybeabletoreturn.'
Theneedtoensurethatthepoliciesdevelopedwithinthesnakeare
compatiblewiththeCommunity'sgeneralobjectives,does,however,
justifymoredirectparticipation bytheCommunityinstitutions in
thejoint–floatmechanisms.
TheCommissionisalsoconvincedthatcurrentstudyandanalysisof
exchangeratechangesnowbeingpursuedintheCommitteeofGovernors
andintheMonetaryCommitteeshouldbegivenasystematicbasis
andextendedinscope.
Thesediscussions,takingplaceatregularintervals,shouldin
1978makepossibleanappraisalofthescopeforjointmeasuresto
restoreacoherentpatternofexchangeraterelationships withinthe
CommunityandbetweenCommunitycurrenciesandthecurrenciesofnon-member
countries.Themachineryforsuchanalysisandjointactionshouldbe
developedgraduallyinthemonthsahead.TheCommission maydrawon
workcurrentlybeingcarriedoutbytherelevantCommitteesanditsown
departmentstopresentappropriate proposalsinduecourse.

-7-
(b)Financialsolidarityandfirmerconditionality
TheCommissionwillensurethatthefive-yearly revisionofshort–term
supportquotasplannedfor1979isproperlypreparedin1978,andwill
presenttheappropriateproposals.Inawidercontextitwilldefine
andproposeanyfinancialsolidarityarrangements necessitated "bythe
operationofaCommunitystrategytoendthecrisisandreturnto
"balancedgrowth.
Communityfinancialsupporthasbeengrantedonlyonspecificeconomic
policyconditions,andtheCommissionwillmonitordevelopments carefully
tomakesurethattheseconditionsareinfactbeingcompliedwith.
Itwillcarryouton-the-spotfact–findingmissionstotheauthorities
ofthecountriesconcerned,andjointexaminations willbearrangedat
regularintervalswithintheMonetaryCommittee.
V.DIVESTMENT AMDBORROWING
InJanuarytheCommissionpresentedtheCouncilwithaproposalfor
adecisiononthesettingupofanewCommunityborrowingandloan
facility.Intendedtoassistinimprovingstructures,theloans
willbeusedtofinanceinvestmentprogrammesofjointinterest.
TheCommission hopesthattheCouncilwilltakeadecisioninthe
firstquarter,sothatitcanactivateafirsttrancheassoonas
possiblein1978.

CHAPTER 33:THE SINGLE MARKET
I.ESTABLISHMENT OFASINGLE MARKET
Initscommunication ontheprospects foreconomic andmonetary
union theCommission proposed that ,"over afive-year period ,such
progress "beachieved inestablishing asingle market asisnecessary
forputting economic andmonetary union into effect ".Italso recalled
that without trying tomake thecommon market strictly comparable tothe
market ofasingle country itwasnevertheless necessary tounify the
market wherever 'divergences innational legislation orpractice raised
harriers tothefree movement ofgoods orservices orcomplicated the
"business offirms .
Theprogramme ofaction for1978 onmeasures tounify theCommunity market
has "been worked outinthelight ofthis five-year objective and ofthe
selective approach taken toit.
The proposed progress should make avery direct contribution to
attainment oftheobjectives setelsewhere inthe 33MJprogramme ,both
inrespect ofthe return tosustained growth and the establishment of
lasting economic convergence and inrespect -ofthestrengthening ofthe
cohesion oftheCommunity bythedevelopment ofstructural policies ,
especially through anactive policy onindustrial change .
(a)Substantial progress intheintegration ofmarkets isthefirst
essential if -success istobeachieved intheCommunity strategy for
overcoming thecrisis :thedevelopment ofintra-C ommunity trade isone
oftliedecisive factors inrestoring asatisfactory growth rate .Hence
themeasures proposed forthecustoms union ,theremoval oftechnical
barriers totrade ,thecommon market inservices ,theelimination of ,
administrative frontiers taxharmonization andliberalization ofcapital
movements .
Apart from these measures forimproving thefree movement ofgoods ,
services andthefactors ofproduction ,there must atthesame time bea
coordinated effort toreduce thelegal ,administrative andtaxbarriers
tooptimal exploitation bybusiness firms ofalltheadvantages accruing

from integration .Likewise itisindispensable that oncertain points
the market itself operate according torules that are also
gradually unified .Themeasures called forinrelation tocompany -
taxation ,company law ,financial intermediaries ,and soonare
inspired "bythese two concerns .
(b)Secondly ,each step towards unification ofthemarket will help
tostrengthen thenecessary basis forstructural change intheEuropean
economy .Ingeneral terms the expected stimulus togrowth is "bound
tofacilitate structural change inindividual industries intheperiod
before usandhelp solve theemployment problems .
More specifically ,certain individual andatfirst sight secondary
measures forthecreation ofasingle common market will also befound
tobeofdirect assistance topolicies tosupport industries in
difficulty :theharmonization ofcustoms procedures will condition the
.^sii_cess ofmeasures already taken toregulate certain markets inthe
Community ,such assteel andtextiles .
Theprogramme sefoutbelow hasbeen drawn upinthelight ofthe
preoccupations andperspectives just outlined .TheCommission 'smain
aimatthis first stage ofifive–year programme ofaction hasbeen
tointegrate avariety o(actions andprogrammes already under wayor
onthedrawing boar' ?-Ithasofcourse taken account oftheprogress
already mada ,c-acent rating onmeasures where aproposal hasalready
been made fortheCouncil todecide onin1978 .Alist oftheproposals
which theCommission isplanning topresent over thenext twelve months
isgiven intheAnnex .Forthesake both ofsimplification andoftechnical
coherenoe thevarious chapters –customs union ,taxharmonization ,etc.–
contain measures which aresubstantially different intheir intrinsic
importance ,scope andoperational context .Butthis should notconceal the
fact that these many proposals -onmatters relating bothtobarriers totrade
andtoimproving theorganization ofthewaythesingle market -willwork–
fittogether horizontally toform acc-erent whole .
/
/

-10-
II.FREET.IOVEf.SNT OFGOODSANDI^RVICKS
A,Customsunion
Inordertoachievetheconvergence oftheCommunityeconomies asastep
towardseconomicandmonetaryunion,thecustomsunionwillhavetobe
completed.Thecustomsunionprovidesagreatmanyinstruments required
fortheapplication ofmeasuresundervariouscommonpolicies–notably
thecustoms,commercial,industrialandagricultural policies.Itmust
"betightenedtoensurethatgoodsenteringtheCommunityfromnon-member
countriesaresubjecttoexactlythesameconditionswhatevertheirpoint
ofentry:thereliability ofthecommonapproachoncustomsmattersisa
fundamentalfactorinhaltingthesplitting-up ofmarketsanddissuading
theKemberStatesfromapplyingautonomousmeasuresatnationalfrontiers.
Togetherwiththeintroduction of-uniformarrangements fortradebetween
theCommunityandnon–membercountries,customsprocedureswillalsohave
tobeharmonized.Existingdisparities betweennationalcustomslegislation
couldcausedistortions inthecustomsandeconomictreatmentofgoods
releasedforfreecirculation intheCommunity;reducingthesedisparities
isasinequanonforachievingsmootherflowsoftradewithintheCommunity.
Inaddition,ifproceduresareharmonized,itwillthenbepossibleto
simplifyfurthertheformalities andcontrolsapplicabletointra-Community
trade.
TheCommissionwouldthereforeasktheCounciltodecidethisyearonthe
proposalslistedbelow,whicharealreadybeforetheCouncil.
(a)Administrative cooperationandmutualassistance
Regulationoncooperation betweennationalcustomsauthorities andbetween
themandtheCommission (senton10April1973)*
(b)Uniformityofarran,°^mentsforexternaltradeandimplementation of
sectoralmeasures
(i)Directiveontheharmonization ofproceduresforthereleaseofgoodsfor
freecirculation (senton21December1973);

-11-
(ii)Theoperation ofmarket regulation arrangements forsteel andtextiles
gives added importance totheuniform application throughout theCommunity
ofprecise rules oforigin ;theeffectiveness ofthese arrangements also
depends ontheestablishment ofascheme forthesurveillance ofimports
from various sources which canguarantee "both speed andreliability .
(c)Free movement ofgoods
(i)Proposal forsimplification oftheCommunity transit scheme bymaking
theprovisions onthecompulsory provision ofsecurity more flexible (sent
on11August 19T5 )»
(ii)TheCommission will examine with theMember States *customs departments
ways andmeans ofsubstantially easing theformalities involved in
iritra -Community trade ingoods subject toVATbuttonoother form oftax ;
itwill also consider whether simpler arrangements could bemade forgoods
which remain temporarily inoneormore Member States before returning to
theMember State from whieh they came (parts forassembly ,works ofartfor
Removal oftechnical barriers totrade
< '
TheCouncil hasonanumber ofoccasions recognized theimportance forthe
achievement oftheinternal market ofremoving technical barriers totrade .
Tnedirectives tostandardize technical specifications allow industry
+ov.– :irOB "fcheeconomies ofscale offered byamarket of250million
inhabitants .TheyalsoputCommunity industries inastronger position
against international competitors onother markets andatthesametimeoffer
consumers awider choice ofproducts andthefruits ofincreased competition
between producers .
-J.anysignificant progress istobemade ,atight work schedule must be
respected :thefollowing directives ,forwhich proposals havebeenmade ,
must beadopted this year :

-12
(a)Industrial products
(i)Directives concerning motor vehicles .
The main stress must beontheadoption ofthe last four directives in
this field ;atthe same time theCommunity type-approval arrangements
adopted in1970 should bereviewed inorder toproduce aneffective
Community stucture which would mean that the Community industry was
not atahandicap against its international competitors .
(ii)Framework directives concerning three important industries (lifting
andhandling appliances ;non–electric cookers andheaters ;
constructional plant andequipment ).
Asframework directives deal effectively with these matters ,they
should beadopted .
(iii)Directive concerning thepackaging andlabelling ofdangerous
substances ,which isessential for thefree movement ofchemicals .
(b)Foodstuffs
Inview ofthespecial requirements here and oftherole played bythe
protection ofpublic health ,themain efforts mast bedirected atpressing
forward with thehorizontal directives ,which will trace thebroad lines
forCommunity action ,and atadopting specific directives tosolve important
problems (labelling offoodstuffs ).
C. Common market for services
TheCommission would ask theCouncil todecide this year onthefollowing
proposals nowbefore it:
(a)Securities market
Directive tocoordinate the conditions for admission toofficial stock
exchange quotation .
(b)Insurance
Directive forcoordination inlife assurance ;
Directive concerning co-insurance ;
Directive onfreedom toprovide services inrisk insurance .

-13-
D.Publiccontracts
Directive77/62,whichcomesintoforceon1July1978,willallowfor
verification ofactualcompliancewithprovisionsfortheliberalization
ofpubliccontracts,foritwillcompelpublicauthorities tousepublic
andwidelypublicizedproceduresfortheawardofcontracts,whichtotal
10000millionEUAfortheCommunityasawhole.
Asforbranchesoftheeconomythatarenotyetcovered,theCommission
intendstotransmitaproposalconceringtelecommunications supply
contractstowardstheendoftheyear.Itwillthenmoveontodealwith
transport,andsubsequently thesupplyofwaterandpower.
E.Liberalization ofcapitalmovements
Dependingonprogresswithgeneraleconomicconvengence theCommission
vailendeavourtoencouragetheliberalization ofcapitalmovementsthis
year.Itwillcontinuetomonitorthesituationclosely,particularly in
(
thoseMemberStatesthathavehadtoapplysafeguardmeasures.
i7'.Removalofmonetarycompensatory amountsina,?riculture
Afirststepshouldbetakenhere,inaccordancewiththeCommission's
proposal,whenthefarmpricesarefixedfor1978/79*

-14-
III.HARI-IOTIIZATION
A.Tarharmonization
1.Itistooearlyyettomakepreciseproposalsconcerningthegeneral
problemoftheharmonization ofVATratesintheMemberStates.Itmust
firstbedetermined ,whatisthemostsuitableratestructureforthe
Community(one,twoormorerates).TheCommissionwillbeginpreparatory
workin1978withaviewtopresentingaproposaltotheCouncillater.
2.TheCommissionwouldalsoasktheCounciltodecidethisyearona
numberofprioritymattersonwhichproposalshavealreadybeentransmitted :
(a)Exciseduties
Directives onbeerandspirits;
Directivedefiningmanufactured tobaccoproducts;
(b)Directtaxation
Directiveconcerningthetaxarrangements applicabletomergersbetween
companiesfromdifferentMemberStates;
Directivetoeliminatedoubletaxationonadjustments ortransfersof
profitsbetweenassociatedcompanies;
(c)Thefightagainsttaxevasion
Proposalforextendingmutualassistancefortherecoveryofcustomsduties
andagricultural leviestoVATandexciseduties;
(d)Duty-freeallowances
Directivesonsmallconsignments fromnon-membercountries,duty–free
allowancesforremovals,marriagesandsuccessions ,temporaryadmissionof
certainmeansoftransport,biggerallowancesfortravellers ;
(e)Otherindirecttaxation
Directiveonindirecttaxesontransactions insecurities.
3.TheCommission ,wouldlikeadecisiontobetakenbeforetheendofthe
yearontwoVATproposalswhichitisplanningtosendtotheCouncil
followingadoptionoftheSixthDirective,establishing auniformbasisof
assessment :
SeventhDirective,onreimbursement ofVATtoforeigntaxablepersons;
EighthDirective,onsecondhandgoodsandworksofart.

-15-
B. Company law
Host of "thelargest industrial andcommercial undertakings intheCommunity
take theform ofjoint-stock companies .These aretheCompanies which "buy
andsell thelargest quantities ofgoods ,"borrow andlend thelargest sums
ofmoney andmake thebiggest contribution tothedevelopment ofmodern
technology ,ofwhich they aretheprincipal users .They aretheleading
creators ofwealth and ,asemployers ,have adirect influence onthelives
ofmany Community citizens .They areclearly institutions ofvital
importance fortheCommunity *seconomic andsocial structures .
Atpresent these companies areincorporated under thelaws ofindividual
Member States .These national laws differ considerably onmatters such as
company structure ,mergers between limited liability companies ,the annual
accounts ofjoint stock companies andgroups ofcompanies ,andthis hampers
international business ,both forthose dealing with acompany andforthe
companies themselves .
Asprogress ismade towards EMUacommon market forcompanies must also be
setuptopromote theflow ofproductive investments .
TheCommission considers that theconditions areright for adoption bythe
Council this year ofthefollowing proposals :
Third Directive ,concerning mergers between limited liability companies ;
Fourth Directive ,concerning theannual accounts ofjoint stock companies ;
Sixth Directive ,concerning theprospectus foradmission tostock exchange
quotation .
Merger control
Inorder topreserve theundistorted competition which theTreaty aims at,
competitive industrial and commercial structures must bemaintained inthe
Community .Since themeans ofworking forthis objective ,based on
Article 86,areinadequate ,theCommission would asktheCouncil toadopt
in1978 itsJuly 1973 proposal foraregulation tocontrol large –scale
mergers .

ù£.a.aarY4tai
-16-
CHAPTER C;STRUCTURAL POLICIES
I.POLICY FORINDUSTRIAL CHANGE
Thedeclining sectors ofthe Community 'sindustry must adjust their
production capacity andmodernize equipment inorder to "become
competitive again ,aprerequisite iftheCommunity istodevelop
itsexternal markets .Thenewpossibilities ofdevelopment afforded
onitsownmarket bythehigh–technology sectors and industries
connected with environmental protection andenergy should also be
exploited . '
Themarket 'srole inreallocating resources ,asrequired byindustrial
redeployment ,isandmust remain primordial .
Itmust ,however ,beborne inmind that there arepowerful lobbies
forhelping certain industries inincreasing difficulty bynational
safeguard measures intheform either ofgovernment aid orofprotectionist
measures .There would then beareal danger ofprotectionism andofthe
break-up ofthe internal market .This repartitioning oftheCommunity
market would deprive themost efficient firms oftheadvantage of
their competitive superiority .Hence theneed fortheCommunity both
tostep upitsefforts toestablish asingle internal market and
encourage technological research andalso totake pragmatic but coherent
sectoral measures inorder toavert thedanger andfacilitate the
modernization oftheindustries concerned ,enabling them tobecome
competitive again more quickly .This isthepurpose ofthe
Community 'saction insteel ,textiles andshipbuilding .

-17-
Industrial reorganization ispossible only ifworkers canbecertain
that atthe same time effective regional conversion measures arebeing
taken ,including theprovision ofnew jobs andtheretraining ofthe
workforce .Thecreation ofsuch jobs will first require renewed
investment inindustry and services together with animproved economic
climate and theapplication ofspecific measxires forregional development .
Community action isalso needed toencourage thedevelopment ofnew
industrial activities .
TheCommunity must ,therefore ,open uppublic contracts andcoordinate
public purchasing toencourage anddevelop thepooling ofnational efforts
concerning technological research andproduction programmes forhigh–
technology industries .Itmust promote the creation ofindustrial
activities connected with theprotection ofthe environment .Its industry
must beencouraged todraw maximum benefit from thegrowth potential
afforded bytheexternal markets mainly intheenergy-producing countries
andinthedeveloping countries ,notably bymeans ofindustrial cooperation .
These policies should be .financed from the Community budget ,the
redistribution potential ofwhich should beincreased tomake convergence
easier andprovide afirm basis for integration .Ifthis proves not to
bepossible ,itwould benecessary toincrease budgetary expenditure
still more ,inorder tocover thetransfers required inaneconomic
andmonetary union .
A. Continuing the Community policy ofindustrial intervention
TheCommission will continue toseek theviews ofthegovernments ,
employers andtrade unions .
(1)Steel
Asthe market recovers –which isthe aim ofthe Commission 'scrisis
plan -firms will gradually return toaprofit situation ,thus allowing
them toundertake their reorganization using their ownresources .

-18-
Intherevisedgeneralobjectivesforsteelfor1985–90theCommission
willencouragetheimplementation ofreorganization programmes.The
Community^assistancewillbebywayofensuringtheooherenceof
theseprogrammesandproviding ECSCfinancialresourcesformodernization
andconversionprojects.
InthiswaytheCommunitysteelindustrywillquicklybecomecompetitive
againinaframeworkofinternational freetrade.
(2)Textilesandclothing
Themaineffortinternallywillbedirectedtowardsreorganizing the
brancheshardesthitbythecrisis,inoludingthesyntheticfibre
industrywheretheproblemofsurpluscapacitymustbesolved.As
withsteel,theCommissionwillmobilizeitsfinancialresourcesto
ensurethatalongwithreorganization thenecessarycomplementary
measuresinregionalconversion andsocialreadaptation aretaken.
Externally Communitypolicyhascreatedtheconditionsandtiming
necessarytoencouragesuchadaptationandreorganization .
(3)Shipbuilding
Inthisindustryaprogrammeofadaptationwillbeundertakenwith
theaimoflimitingproductiontotheforeseeable volumeofdemand,
whichwillhavetobestimulatedinsuchawayastopromoteCommunity
production.MakingtheCommunityshipbuilding industrycompetitive
intheworldwillinvolvethelossofjobs,whichwillhavetobe

-19-
offset "byappropriate conversion andadaptation measures supported
byCommunity funds .
B. Growth sectors
Projects andmeasures implemented inthedepressed sectors must
bebacked upbyaneffort toidentify anddevelop those sectors
which ,inthelight ofcurrent structural developments ,will ensure
that European industry becomes more competitive andreturns togrowth
inthefuture .Inaccordance with itscommunication totheEuropean
Council meeting on5and6December 1977 ,theCommission will present
areport totheCouncil onthismatter before July 1978 - report
identi ^."- -hegrowth sectors where theCommunity could foster
development .Without waiting forthereport theCommission ,with
reference tothe Council Resolution of19March 1977 ontheconstruction
programmes forlarge civil aircraft ,will indicate thepractical
possibilities forCommunity cooperation inresearch ,construction andmarketing .
C.Development ofCommunity instruments for apolicy ofindustrial change
Inorder toensure thecoordination ofCommunity intervention ,the
Commission will endeavour in1978 tocarry outcertain studies with
theaidofpublic ,trade orindependent bodies .TheCommission will
report periodically tothe Council ontheprogress ofthis work :
–numbers ofjobs lost asaresult ofreorganization plans ;
–appraisal ofsector performance (profitability ,efficiency ,
competitiveness ,capital coefficient andinvestment financing structures ,etc.)
–analysis offactors ofchange ,both international (newinternational
division oflabour )andinternal (trend inthestructure ofdemand ),
andtheir impact ontheproduction apparatus ;
–development ofasystem ofindicators onthe situation inanindividual
industry (sector instrument panel )which will actasanearly warning
system andenable dangers threatening that sector tobespotted intime ;
–collation andanalysis ofnational sectoral forecasts toensure abetter
exchange ofinformation onchanges ineconomic structures (anassignment
given totheCommission bythe Council under thefourth medium-term
econonic policy programme ).

II.ENERGYPOLICY
Here"theobjectivefor197°is"tomakeatwo–pronged ,advancetowards
achievinga"bigreductionintheCommunity Tsenergydependenceand
establishing acommonenergymarket.
A.Energyindependence
Significantprogresstowardstheobjectiveofgreaterenergyindependence
couldbemadein1978byaffirmingthedetermination tocontinuethe
effortalreadybeingmadetoreduceconsumption andtouseenergymore
rationally andtocontinueandstepupthedevelopment ofsourcesof
energyproducedintheCommunitywhichcanreplaceimportsofcrudeoil.
0)Ener,qysavings
i
TheCommissionhopesthatduringthefirstsixmonthstheCouncilwill
adoptthefollowingproposals,whicharenowbeingdiscussedandon
whichParliament andtheEconomicandSocialCommitteehavegiventheir
opinions:
Regulation ongrantingfinancialsupporttodemonstration projects
enablingenergytobesaved;
Directiveonthemodernization ofbuildingstosaveenergy.
(2)DevelopmentofenergysourcesintheCommunity
TheCommission wouldasktheCounciltotakedecisionsinthefirsthalf
oftheyearonits1977communications concerning :
reprocessing ofspentfuels;
aCommunityactionplanforradioactive waste;
thefastbreederoption.

-20-
Common enerpy market
In1973 progress towards establishing thecommon energy market should be
viatheachievement ofintensified intra –Community trade ,greater
transparency andagradual harmonization ofprices and anorderly
development ofrefining capacity .
(1)Theintensification oftrade inenergy products within theCommunity
concerns especially trade incoal ;theCommission hopes that the Council
will quickly adopt itsproposals forencouraging theuse ofcoal inpower
stations .
(2)Major factors inthecreation ofacommon market aretheachievement
ofmore transparency ofenergy prices ,andtheir gradual harmonization ;
sothat themany obstacles canbeovercome theCommission hopes that the
Council will set outresolutely ontheroute theCommission has mapped
out ,taking thedirection which will beindicated inthecommunications
itwill bepresenting during the second quarter .
(3)Since theCouncil hasbeen unable toadopt theCommission 'sproposals
onoilrefining policy ,theCommission will present anew communication on
this subject during thefirst half oftheyear .
C. Financial instruments
Investment inthe energy sector must bestepped upvery sharply because
spending onalarge scale would meet apriority requirement which isthat
ofdeveloping new energy sources inEurope and atthe same time effectively
underpin economic activity intheCommunity .The Community already has
major instruments atitsdisposal inthis field andhas proposed specific
measures .
Lending operations under theEuratom borrowing scheme will bestepped up
and the newfinancial instrument onwhich the Commission will shortly be
presenting aproposal will make itpossible toincrease theincentive to
invest intheenergy sector .TheCommission also hopes that theproposals
togrant financial support forprojects aimed atdeveloping alternative
energy sources andtoback thehydrocarbon exploration projects currently
being discussed intheCouncil will beadopted during thefirst half of
the year .

ni ».i. . . •>:. ■■>■.»> *»..*•■■ •*-- •■– ■■ IlìllJlBM TIm .
-21-
III .AGRI CULTUR ALSTRUCTURE POLI CY
Inconjunction with its second report ontheapplication ofthe socio –
structural directives ,theCommission presented two sets ofproposals
containing amendments toexisting texts and also new plans .
These proposals concern themodernization offarms ,thecessation of
farming ,themarketing andprocessing ofagricultural products ,farming
inmountainous areas ,the introduction ofsystems technical advisers ,
afforestation ,agricultural infrastructure andanumber ofcollective
operations forconverting tonewproducts ,andland improvement works .
Inpresenting these proposals ,theCommission hadtwoobjects inmind :
(i)topromote thestructural development offarms inaneconomic
situation which istending toact asabrake onsuch adevelopment ;
(ii)tostress that agricultural structure policy must make greater
allowance for the regional disparities existing inthe Community .
Toachieve this alarge proportion ofthefunds available will be
channelled toregions where theimprovement ofproductivity
encounters difficulties which cannot beeliminated without Community
assistance and those which also have tomake special efforts to
adjust andconvert ,such astheMediterranean regions .The
Commission hopes that theCouncil will take adecision inthefirst
half oftheyear .
IV.REGIONAL POLI CY
The Commission isfully aware that thequest forgrowth will have tobe
backed notonly byapolicy onsectoral structures ,butalso -inorder
tokeep moving towards theobjective ofaharmonious development ofthe
regions –byanactive regional policy .
Itwasfor this purpose that theCommission sent theCouncil inJune 1977
itscommunication onregional policy guidelines andtheaccompanying
proposals .

-22-
Theproposals currently before theCouncil aremainly concerned with :
(i)improving theprooedures forcoordinating national regional policies ,
notably byhaving areport drafted every twoyears onregional
development ,toserve asageneral framework for analysis and
planning ;
(ii)strengthening therole oftheRegional Policy Committee ;
(iii)establishing andimplementing aprocedure forassessing theregional
impact ofthe other Community policies ;
(iv)improving theoperations oftheEuropean Regional Development Fund ;
this canbedone bysupporting Member States' development projects
andbyspecific action todeal with theregional effects ofCommunity
policies .
The Commission hopes that the Council will actrapidly onthe above
proposals following thedecisions taken bytheHeads ofState orGovernment
on5and 6December 1977 * I"twill then bepossible toimplement them in
1978 .
i
V. INVESTMENT POLICY
Investment projects meeting the Community 'spriority requirements inthe
fields ofenergy ,industry and infrastructure work can infuture –with
due allowance for their regional impact –befinanced using thenew Community
borrowing and lending instrument .
A. Investment aidpolicy
Ifhigher growth rates are toberestored ,investment must bestepped up,
notonly inabsolute terms but also enough toincrease its share inGDP .
Inall countries there are measures toencourage investment .Over the
past fewyears there hasbeen afairly widespread trend toincrease such
investment incentives .
However ,while thestimulation ofcapital formation isoneofthepriority
tasks ofeconomic policy ,amuch larger number ofinvestment aid schemes
with broader scope maygenerate problems asregards the effectiveness of
economic policy andalso from the competition angle .

Inthe light ofthe results ofthe current work bytheEconomic Policy
Committee onthepossibility ofoarrying outacomparative analysis of
thevarious general investment incentive schemes ,theCommission will
submit itsconclusions in1978 concerning themethods which aremost
likely tooffer coherent choices and avoid distortions ofcompetition .
B. Investment innon-member countries
The Commission has sent theCouncil aproposal concerning theprotection ,
guarantee andpromotion ofinvestments indeveloping countries .It
would urge that theproposal bediscussed without delay inview ofthe
importance foranexternal policy ofsupport forindustrial investment .
C. Public investment
During thefirst half of1978 theCommission ,working with thenational
authorities ,will draw upanoutline ofinfrastructure ofinterest tothe
Community ;atthe same time itwill submit proposals onways andmeans
ofachieving effective ,coordinated action inthis field .

-24-
CHAPTER D:SOCIAL POLICY
Social policy isone ofthemost important aspects ofthe action proposed
"bytheCommission initscommunication ontheprospects foreconomic and
monetary union ,because itconstitutes "both anend and ameans :the end is
areturn togrowth andthe adjustment ofstructures topromote social
progress -which isalso ameans ,since bystrengthening the consenus ,
social progress facilitates theadjustment ofstructures andleads togrowth .
Inthis connection theCommission will give priority in1978 tothe
promotion ofemployment .Itspolicy will follow twomain lines .
Concerted support forgrowth will beprovided byanumber ofpolicies
directed atstimulating private andpublic investment andmaintaining
adequate demand ,combined with efforts tounify theCommunity market and a
policy ofindustrial changes .
This policy will not initself besufficient unless accompanied bysocial
measures .TheCommissions second line ofaction will therefore bepursued
viaanactive employment (mainly through thecreation ofjobs foryoung
people )andlabour market policy .
Following thedeliberations ofthe 1977 Tripartite Conference ,theCommission
will also give priority toeconomic and social problems linked to
employment .
This does notexclude other areas ofsocial policy concerned with incomes ,
working conditions ,social protection andworker participation from the
range ofCommunity initatives in1978 .Apart from their intrinsic value ,
they will also strengthen the social consenus needed ifthe essential
adjustments aretobecarried through .Accordingly ,anumber ofactions
andideas will beput forward inthese different spheres .

Tobemorespecific,theCommissionwilltakecertaininitiativesinthe
followingareasin1978s
I.EMPLOYMENT POLICY
A.Employmentofyoungpeople
Proposaltoprovideaidforthecreationofjobsforyoungpeople
(firstquarterof1978)*
B.Labourmarket
Toimprovecoordination betweenallaspectsofemploymentpolicy(school,
guidance,training,placement,employment),theCommissionwillseekto
expandmutualaidandcooperation betweenMemberStatesindeveloping
nationalinstitutions designedtoimprovethebalancebetweensupplyand
demand.
C.Economicandsocialproblemslinkedtoemployment
FollowingtheworkoftheTripartiteConferencein1977and-inlinewith
theobjectivesofthefourthmedium-term economicpolicyprogramme,the
Commission ,inclosecollaboration withthetwosidesofindustryandthe
nationalauthorities ,willworkoutasystematicapproachtotheeconomic
andsocialproblemslinkedtoemployment.
II.INCOMES ANDWORKINGCONDITIONS
TheCommissionhopesthatin1978theCouncilwilltakedecisionson
certainproposalsforactionpresentedtoit;inaddition,theCommission
willtakeanumberofotherinitiatives :
A.Incomescales
Reinforcement ofactiontoreduceinequalities .
B.Improvedworkingconditions
(i)Follow-uptotheactionprogrammeonhealthandsafetyatwork
alreadypresentedtotheCouncil;
(ii)Examinationofthespecificconclusionstobedrawnfromdiscussionsin
theStandingCommitteeonEmploymentandtheforthcomingTripartite
Conferenceonwork-sharing.

-26-
III.SOCIALPROTECTION ANDSOCIALSECURITY
Withaviewtoreducinginequalities withrespecttosocialprotection,
theCommissionwillpursueitseffortstolaydowncommonminimumsocial
protectionrulestocoverthemajorrisks.
IV.WORKERPARTICIPATION
TheCommissionwillcontinueitseffortstoorganizeconferencesbringing
togetherthetwosidesofindustryandtheCommissiontoexaminethe
economicandsocialproblemsarisingintheshipbuilding andsteel
industries .
Further,intheinterestsofreinforcingparticipation atcompanylevel,
theCommissionintendstoforwardtotheCouncilaproposalforCommunity
actionimposinganobligationongroupsofundertakings toinformand
consultstaffortheirrepresentatives .
Inaddition,inconnectionwithitseffortstocreateacommonmarketfor
ι
companies,assoonastheopinionofParliamentisavailabletheCommission
willincorporatetheideasoutlinedinthe"greenpaper"inarevised
versionofthisproposalforadirective.

AITOEX
Further measures putforward intheAction Programme for1978
Unlike themain body ofthe text which concentrates onmeasures which the
Council could decide tointroduce in1978 ,theAnnex lists proposals which
theCommission isplanning topresent during theyear andwhich the Council
will beexpected toexamine .
I. CUSTOTTS UOTON
Inorder tostrengthen security intheCommunity transit scheme theCommission
will work forgreater cooperation between Member States fortheelimination
ofillegal practices andwill transmit anewproposal forsimplification
oftheterms onwhich theMember States canrecover sums falling due in
the event ofanirregularity .
II.REMOVAL OFTECHNICAL BARRIERS TOTRADE
(a)Preparation ofnewdirectives
Industrial products :TheCommission will propose anumber ofdirectives
following onfrom theoutline directives already adopted bytheCouncil
(pressure vessels ,measuring instruments )orfrom those which should be
adopted in1978 (cookers andheaters ;lifting andhandling appliances ;
constructional .plant andequipment ).
Foodstuffs :With thehelp oftheindustries concerned andother interested parties ,
theCommission will beattempting toredefine themain priorities arising
outoftheneed forconsumer protection .
Special emphasis will belaid on:
theproperties ofplastic substances coming into contact with foodstuffs ;
frozen foodstuffs ;
caseins and caseinates .
Proposals should betransmitted inthe course oftheyear .
(b)Adaptation ofexisting directives totechnical progress
Technical progress hasalready obliged theCommission toreopen work onmariy
directives adopted inrecent years .Some sixoreight proposals will be
laid before thecommittees onadaptation totechnical progress with aview
tonewdirectives being issued .
These will deal with motor vehicles (statutory plates andinscriptions ,interior
fittings I,airpollution ,braking andexternal projections )andwith
metrology (gasmeters ,material measures oflength ,methods ofchecking the
making-up ofprepackaged goods ).

-2-
(c)Simplification ofworkingprocedures
TheCommissionfindsitunsatisfactory thatunderthepresentprocedure
thelongpreparation requiredfordirectivesofthiskindattheCommission
stagedoesnotpreventthereopeningoftechnicaldiscussions withinthe
Council,discussions whichlastseveralyearsonaverage.
Asaresultitwillhemovingontwodifferentfronts:
Firstly,itwillmakepolitics!representations intheCounciltoattempt
tosecureasignificant speeding–upoftheworkingmethodsused.
Itisillogicalandregrettablethatproposalscanheheldupforyears
citherbecausetheirexamination hasnotevenbegunorthatexamination
hasbeensuspendedwithoutanyfinaldecisionbeingtaken.Itisalso
unacceptable thatthepoliticalwillinfavourofharmonization isheld
backbyquarrelsbetweenexperts.
Secondly,asrequestedbyParliament ,theCommissionplanstopresentto
theCouncilanewprocedurefortheremovaloftechnicalbarriersto
tradebasedonArticle155ofEECTreaty.Thenewprocedurewould
bemoreflexibleandwouldavoidaseconddiscussion ofthetexts.
Duringtheyear,forexample,itwillpresentaframeworkdirective
onbuildingmaterialswhichwillprovideforimplementation measures
tobetakendirectlybytheCommission onceithasreceivedtheassent
ofacommitteeofgovernmentrepresentatives .Itwillmakeeveryeffort
toensurethatthisproposalisadoptedrapidly.
III.COT-IKONMARKETITTSERVICES
TheCommissionwillbetransmitting newproposals:
(a)Banking:
Harmonization oftherulesgoverningthecompulsorywinding–upofcredit
establishments j
Directivestogivepropereffect,throughmeasuresofharmonization and
measurestoliberalizecapitalmovements,totherightofestablishment
forinstitutions specializing inmortgagecredit:

Harmonization ofrules governing the canvassing ofloan facilities .
(These three proposals will "betransmitted totheCouncil inthesecond
part oftheyear )
("b)Securities market ;
Directive concerning thecanvassing ofsecurities ,togive better protection
toemail savers ;
Directive onthe information tobedisclosed onaregular "basis "byissuers
whose securities are quoted onastock exchange .
(Thefirst ofthese proposals will betransmitted totheCouncil inthe
first half oftheyear andthesecond inthesecond half )
(c)Insurance ;
Directive (originally planned for1977 )forcoordination oflegal rules
governing the insurance contract ,toimprove theprotection given to
the insured person andtothird parties benefiting under the contract ;
Directive oncanvassing inthe field ofinsurance toensure that the insured
person isproperly protected when entering into acontract ;
Directive concerning the compulsory specialization required byaMember State
for credit insurance ,suretyship insurance ,legal expenses and .costs oflitigationinsurance ana sicicness insurance .
(These three proposals will betransmitted inthesecond half ofthe
year )
IV.TAX HARMOin ZATION
Lastly ,theCommission will bepresenting newproposals forharmonization
ofindirect taxation and for measures tocombat tax evasion ;
(a)Harmonization ofdirect taxes ;
Application tocollective investment undertakings ofthe principles ofthe
proposal foradirective harmonizing company taxation schemes and
withholding taxondividend income ;
Removal ofcertain forms ofdiscrimination inrelation topersonal
income taxonfrontier workers ;
(b)Taxevasion ;
Mutual assistance andcooperation between national revenue departments as
regards indirect taxation .This directive will bethe equivalent of
the onerelating todirect taxation .

V.COT-IPAMYLAW
TheCommissionwill"bepresentingproposalsfornewdirectivesinthe
followingareasduring1978:
EighthDirective,concerningthepersonsresponsibleforauditing
accounts;
NinthDirective,concerninggroupsofcompanies.
OnceithasreceivedParliament'sopinion,theCommissionwilltransmit
anamendedproposalfora
SeventhDirective,concerninggroupaccounts.
VI.ENERGYPOLICY
TheCommission willtransmittotheCouncil
(i)inthefirsthalfof1978,aproposalforasecondDirectiveon
theperformance ,maintenance andregulationofheatgenerators ;
(ii)duringthesecondhalf,newproposalsinotherareasofpriority -
action("building,motorvehicles,domestioappliances,industry).
VII.SOCIALPOLICY
Inthefirstquarterof1978theCommissionwillpresentaproposalfor
adirectiveonnightwork,withamemorandum onshiftwork.