ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(82)141
Vol.1982/9008

Disclaimer
Conformément aurèglement(CEE,Euratom)n°354/83duConseildu1erfévrier1983
concernantl'ouvertureaupublicdesarchiveshistoriquesdelaCommunauté économique
européenneetdelaCommunautéeuropéennedel'énergieatomique(JOL43du15.2.1983,
p.1),telquemodifiéparlerèglement(CE,Euratom)n°1700/2003du22septembre2003
(JOL243du27.9.2003,p.1),cedossierestouvertaupublic.Lecaséchéant,lesdocuments
classifiésprésentsdanscedossierontétédéclassifiésconformément àl'article5dudit
règlement.
InaccordancewithCouncilRegulation(EEC,Euratom)No354/83of1February1983
concerningtheopeningtothepublicofthehistoricalarchivesoftheEuropeanEconomic
CommunityandtheEuropeanAtomicEnergyCommunity(OJL43,15.2.1983,p.1),as
amendedbyRegulation(EC,Euratom)No1700/2003of22September2003(OJL243,
27.9.2003,p.1),thisfileisopentothepublic.Wherenecessary,classifieddocumentsinthis
filehavebeendeclassified inconformitywithArticle5oftheaforementioned regulation.
InÜbereinstimmung mitderVerordnung(EWG,Euratom)Nr.354/83desRatesvom1.
Februar1983überdieFreigabederhistorischen ArchivederEuropäischen
Wirtschaftsgemeinschaft undderEuropäischen Atomgemeinschaft (ABI.L43vom15.2.1983,
S.1),geändertdurchdieVerordnung(EG,Euratom)Nr.1700/2003vom22.September2003
(ABI.L243vom27.9.2003,S.1),istdieseDateiderÖffentlichkeitzugänglich.Soweit
erforderlich,wurdendieVerschlusssachen indieserDateiinÜbereinstimmung mitArtikel5
dergenanntenVerordnungfreigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(82)141final
Brussels,23rdMarch1982
THEECONOMIC ANDSOCIALSITUATION INTHE
COMMUNITY
(Communication fromtheCommissiontotheEuropeanCouncil,
Brussels.29and30March1982)
C0M(82)141final

INTRODUCTION
This communication iaintended asabasis fortheEuropean
Council 'sdiscussion onthe economic and social state ofthe
Community .Itcomprises afirst section appraising the
immediate outlook ;asecond briefly recalling thelines of
economic policy that outlook demands ;.athird sketching the
Community 'sowncontribution tothis strategy ,and afourth
dealing with specific measures inthematter ofemployment .

2
1.APPRAISAL OFECONOMIC SITUATION AND IMMEDIATE OUTLOOK
1.1.TheCommunity economy in1980/81showed' negative growth (-0.535 ),
aslight downturn ininflation andasharp leap inunemployment
(byabout one-third ).Overall ,thebalance -of-payments deficit
wasreduced fairly quickly ,from anaverage -1.3# ofGDP in1980
to-0.8# in1981 .
1.2.In1982 growth inGDPislikely tobesomething like 1.6#–
less than wasforecast inDecember –andinflation around 10.5#;
theburden ofthecurrent-account balance -of-payments deficit
should diminish to-O.^f# ofGDP .These expectations arebased
onpredicted high exports andprimarily cyclical stockbuilding .
Unemployment will continue torise ,though less steeply :it
will exceed 9#oftheworking population in1982 ,owing in
part totheincrease inthelabour supply in1980-85 .
1.3 *This outlook does practically nothing tolessen themain basic
problems theCommunity economy hasbeen upagainst for some
years .
First ,energy .Despite the fall inimports ofenergy products -
due inpart tonegative growth and inpart toreal savings –the
netoilbill hasrisen further ,to3-9# ofGDPin1981 .Even
though there has been arelatively favourable movement inthe
price ofoil (detracted from ,however ,bythedollar rate ),
priority still has tobegiven toloosening thegrip ofthe oil
constraint .
The trend ininvestment isdisquieting :theCommunity ison
average devoting rather less than 20#ofitsGDPtoinvestment ,
compared with Japan 's32#.Thereasons arefamiliar :high
interest rates ,lowprofits ,uncertain demand .The consequences
are serious :investment isnot contributing sufficiently to
economic adjustment ,asregards either reducing energy-dependence
orincreasing competitive capacity .
Inflation isstill toohigh with theEuropean economy inthe
trough ofabusiness cycle .Theimprovement in1982 will be
inadequate and anyhow only arelative one .
Developments ontheemployment front give cause forgrave concern .
Unemployment will again increase inroughly thesame measure
(about 15# )fortheninth year running even though theupturn is
Expected togather pace in1982 andreach agrowth rate of2.5#
atthe end oftheyear .Atthe same time theupturn isvery much
dependent ontheinternational environment (world trade ,exchange
rates andinterest rates ).Atbest itwill beonly asmall one ,
and itmaywell beprecarious .Thepolicymakers must bear this
inmind .
•••/•••

.LINES OFECONOMIC POLICY
.1.Member States' policies mast perforce take account ofthe
special features oftheir respective situations .
Allthesame ,divergences inpolicies ,behaviour andresults
arebadinaCommunity based onasingle market andbound
monetarily bystrong reciprocal undertakings .Nowrates of
inflation areexpected in1982 torange from k.5% .to
there will beadifference ofmore than sixpoints between the
highest and thelowest unemployment rates ;theNetherlands will
have a3«9# surplus oncurrent account andIreland a9.3#
deficit ,and theforecast ,growth rates vary between 0.4%and
2.?# .Inface ofsuch contrasting situations ,itcould well be
that thetemptation might develop togoback ontheCommunity
patrimony .
The fact remains that ,with their economies closely interwoven ,
andhaving toface inthesame waylargely structural problems
and external constraints ,theMember States cannot depart from
aline focused onthesame ends and employing thesame kind of
means .
,2.Intheoutlook just described ,unemployment figures asamajor
issue forall themember countries .Singly carrying onpresent
policies asthey stand isnot calculated toproduce asufficient
upturn ingrowth toimprove employment .
There being noprospect ofaresurgence ingeneral demand ,all
margins ofmanoeuvre available intheMember States should be
used topromote investment .These national measures being
part ofacommon purpose ofreviving growth and employment ,
they must beclosely coordinated atCommunity level .The
Commission accordingly feels itshould urge ontheHeads of
State and Heads ofGovernment the need for such coordinated
action .Itshope isthat Community-level moves will bemade
towork outwhat action canbetaken ,and detail tothenext
European Council session thescale ofthat action and the
practical steps involved ,both intheindividual countries and
.intheCommunity asawhole .
,3.This fostering ofinvestment might beeffected onthe following
lines .

Budget-wise ,some Member States arenotfree agents atalland
hare therefore tocontinue togive priority toreducing public
deficits .Others have gradually managed toestablish acertain
margin ofmanoeuvre ,andthis must beturned tofullaccoun t* „
provided that the effect is
(i)tobeofdirect benefit toinvestment ,productive job
creation orincreased competitiveness ;
(ii)not tocause matters togetoutofhand sotha.t the
Member States concerned arenolonger incontrol of
financial developments .
Itisalso necessary formost oftheMember States toembark on
asystematic medium-term restructuring ofpublic expenditure so
astoincrease therelative Budget share ofexpenditure on
developing productive activity .
k.This necessitates still greater stringency inthematter of
monetary policy and incomes .
Monetary policy must continue tokeep aclose grip onnational
money supply inorder tobring down inflation :nevertheless ,
where margins ofmanoeuvre have been secured itshould beaimed
atthe top end ofthe target zone formoney-supply expansion .
Inany event theconstraints ofadjustment will still require
that themovement ofcosts ,and hence ofincomes ,remains consonant
with theall-important aim ofcompetitiveness and theneed to
make available the funds todevelop amodern production basis .
CONTRIBUTION OFTHE COMMUNITY
1.The Community 'scontribution toeconomic recovery andhigher
employment could beasubstantial one ifthedecision istaken
atthe top tomake prompt and thorough use oftheassets at
Europe 'sdisposal .
Broadly ,those assets are ,market-wise ,continental scale ;
economically andmonetarily ,themultiplier effect ofconvergent
'policies and theaim toestablish anarea ofstability ,i.e.
toafford economic operators amore stable anddependable

framework tooperate in;externally ,thenegotiating power ofthe
world 'spremier trade partner .
TheCommission proposes that theEuropean Council adopt three
priority fields ofaction .
(a)Theaspiration toestablish through theEMSanarea of
monetary stability –that is,tomake thegeneral framework
ofeconomic policy less vulnerable –isofabsolutely topimportance .
TheCommission submitted proposals following theEuropean Council
session inNovember 1981 *andtheCouncil arranged tobeable to
adopt aresolution atitsMay session .Thedecisions will beaimed
atrealistically but significantly .increasing 'the System 'sinternal
strength and external impact .IntheCommission 'sview this should
involve
(i)stepping upthedrive toensure theconvergence of
policies and results needed tounderpin thesecurity
ofthe EMS ;
(iijestablishing that instrument offinancial diversi­
fication and embryonic reserve currency the Ecu ;
(iii )improving thetechnical machinery oftheEMS ,toan
extent fully compatible with theaims ofnational
domestic monetary policies ;
(iv)proposing totheCommunity 'sleading partners ,onthe
strength ofincreased European monetary credibility ,
organized cooperation toavoid fluctuations inand
unwarranted levels ofexchange rates and interest
rates .
The Commission feels that arealistic move onafairly considerable
scale canand should bemade atatime when therisks ofdivergence
aregrowing and theconsolidation ofEurope isgoing less than
well inmany fields .Ittrusts theEuropean Council will share this
view .
(b)Steady expansion ofinvestment isanaimcommon toall .
Itisinthemain amatter ofindividual entrepreneurial
decisions ,but those decisions are themselves determined by
theenterprise 's,andtheeconomy 's,competitive capacity ,the
demand outlook and thetaxes andregulations applying toinvestment .
Ontwopoints theCommunity isalready playing apart ,namely the
introduction oflending andborrowing arrangements ,concerning
which theCommission will shortly bemaking new proposals ,and
theprogressive framing ofacommon energy strategy ,towhich
investment ispivotal .
The Commission expects theEuropean Council toconfirm the
importance itattaches tothemobilizing ofCommunity credit
forinvestment ,more particularly intheenergy field .

(c)Itistime that theprocess ofturning toaccount the
continent-wide nature oftheCommunity –-completing the
establishment oftheinternal market ingoods ,capital and
services ,developing aCommunity-level industrial strategy ,
formulating apolicy ontechnology andinnovation–got away
from therealm ofgeneral discussion .
Onallthese theCommission hasproposed definite lines of
approach orpractical courses ofaction .What ismore ,there
are signs inthespecialist Councils ofMinisters that on
industry ,andenergy ,andresearch there iscoming tobe
active awareness ofacommunity ofinterests .
TheEuropean Council should make known that itregards this
field asone ofthose where theEuropean contribution could be
the most valuable .
Onboth aid forinvestment and the exploitation ofthe internal
market theEuropean Council should take theappropriate decisions ,
atits June and December sessions .
EMPLOYMENT MEASURES
1.Theemployment problem iscentral totheeconomic policy guidelines
theCommission isproposing .Itisfrom higher investment and
growth that higher employment must principally derive .
Theunemployment figures today ,and theprospect ofanincrease
offive million intheworking population between 1980 and1985 »
are indicative ofthescale oftheproblem .Concerted action
bytheMember States isvital toreverse thepresent trends .
Intheforegoing stress hasbeen laid ontherole ofinvestment ,
particularly public investment ,ashelping ,among other things ,
toensure that business expectations astothemovement of
demand gradually become more hopeful and make companies more
disposed torecruit labour .
2.Asconcerns specific measures toboost employment ,the Commission
proposes thefollowing priorities ,already submitted inits
paper onjobcreation :
(i)ayouth scheme whereby inthenext five years all juveniles
under 18would receive vocational training andinitial
experience ofwork under theauspices oftheeducational
establishments ,under either special youth programmes or
contracts ofemployment .This priority would bereflected
inassistance from theEuropean Social Fund ,which would
devote toitasizeable proportion ofitsspending .
Itshould beamajor Community commitment tospare these
teenagers theexperience ofunemployment ;

(ii)schemes toencourage employers totake onmore workers .
There would beassistance arrangements tostimulate the
creation ofviable jobs andahigher level ofactivity ,
while containing any triggering ofinflation andnot
involving anyadditional expenditure .Itwould be
mainly for theMember States totake steps here ,more
particularly bycontrolling employers' contributions and
other social-security charges .TheCommunity would give
support bystepping upSocial Fund assistance towards
recruitment subsidies !
Ciii )schemes for thebenefit ofsmall andmedium-sized
enterprises and cooperatives ,involving some technical -
assistance andinfrastructure facilities (training ,
access todata networks onnewtechniques andproducts ,&c.)
primarily theprovince ofthepublic authorities .The
Community could help byproviding Social andRegional Fund
monies specifically for this purpose ,and inabroader
context bymaking use ofthelending instruments itmeans
toemploy more especially forsmall andmedium-sized
enterprises .

Table1-MainEconomieAggregate^,1980-82
19;0 1981 1982 1980 1981 1Vä2
GOPvolume,Xchanfle Privateconsumption deflator,Xchange
OK-0,2-1,2 2,5. 12,3 11,5 10,1
D 1,9 0,0 1,4t5,4 6,0 4,5
GR 1,6-0,2 1,2 22,2 •23,5 24,0
F1,3 0,1 2,7 13,2 13,1 13,0
IRL1,9 1,7 .'-1,6•18,2 20,0 19,5
I4,0-0,8 '1,5 20,3 19,2 16,5
NL0,6-1,1 0,8 6,9 6,7 5,0
8 2,4-1,4 *0,4\ '6,4 7,6 10,0
L 0,4-3,0 0,1 7,7 8,1 12,0
UK-1,4-1,4 1'1 15,9 11,6 10,3
CE 1,4-0,5 1,6 11,8 11,4 10,6
Unemployment rate,Xof
.civilianlabourforceCurrentaccountofbalanceofpayments
XGDP
DK 6,2 8,3 8,9•-3,4-3,1"2,9
0 3,4-4,8 6,6 -1,8-1,2 0,2
GR((2,8)(3,1)(3,4) -0;9-4,0-3,0
f 6,5 •7,8 8,5 -1,3-1,4-1,4
IRL 8,3 10,4 12,0 -8,4-12,9-9,3
1 8,0 8,9·9,7 -2,5-2,1-1,2
NL4,9 7,5 9,7 -1,4 2,0 3,9
Β9,3 11,5 13,3 -5,2-6,6-3,9
L 0,7 1,0 1,3 22,2 19,7 (20)
UK 6,9 10,5 11,8 1,4 2,2 0,7
CE 6,1 7,9 9,1 -1,3-0,8-0,4'
General
(♦)orgovernment net
borrowing(-),lending
XGDP(.1)Moneysupply,Xchange
endofyear(1)(2)
OK«)-5,9-10,7-12,1 (M2)10,9 10,1 13,0
0-3,5-4,5-3,6 (M3)6,2 5,0 4,9
GR(-3,3)(-6,3)(-8,2) (M3)24,7 34,7 27,8
> +0,4-2,1-3,1 (M2)9,7-12,3 (13,0)
IRL-12,8-14,4<4>-12,3 (M3)16,9 13,6 13,6
I·-7,8-10,6.-10,3 (M3)16,9 17,0 17,0
NL-3,4-4,1-3,7 (M2)3,6 6,3 8,8
8-9,4-13,3-12,0 (M2)2,7 5,1 (9,5)
L-1,8-3,3-3,0••••••
UK-3,9"2,3-0,8 (ÍM3)18,4 10,5 9,0
-3,6-5,0-4,7 11,3 10,9 (9,9)
u;inefiguresrelatetocalendaryearsexceptfortheUK(financialyears).
(2)end-yearonend–year.
(3)Excludinglossesonbondsissuedbelowpar:-2/9,-6,9and-6,5%respectively .
(4)Excludingprivatesectorparticipation ininvestmentscountingto112mill.I"L.
Source:Commissionservices,basedoninformationavailableupto2March1982;the
the.figurestakeprovisionally intoaccounttheeffectsoftherealignmentofEMSparitieson21February1.982.,