No C 248/2 Official  Journal  of the  European  Communities 29.10.  75 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on the proposal  for a Council  Regulation  amending  Council  Regulation  (EEC) 
No 907/73  of 3 April  1973  establishing  a European  Monetary  Cooperation  Fund 
The text  referred  to the  Committee  was  published  in the  Official  Journal  of the 
European  Communities  No  C 44 of 25 February  1975,  page  1. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 19 December  1974,  the  Council  referred  the  abovementioned  proposal  to the 
Economic  and  Social  Committee  under  Article  198  of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 129th  plenary  session, 
hed in Brussels  on 23 and  24 April  1975. 
The Opinion  is published  below: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community  and  in particular 
Article  198  thereof; 
Having  regard  to the referral  on 20 December  1974 
by the Council  of the European  Communities  of the 
proposal  for a Council  Regulation  amending  Council 
Regulation  (EEC)  No  907/73  of 3 April  1973 
establishing  a European  Monetary  Cooperation  Fund; 
Having  regard  to the decision  taken  by the Bureau  of 
the Economic  and  Social  Committee  on 19 December 
1974  instructing  the  Section  for  Economic  and Financial  Questions  to prepare  an Opinion  on the 
matter; 
Having  regard  to the  Opinion  of the  Section  for 
Economic  and  Financial  Questions  of 4 February 
1975,  and  the  oral  report  by Mr  Cammann,  the 
Rapporteur; 
Having  regard  to the discussions  at its 129th  plenary 
session  on 23 and  24 April  1975  (sitting  of 23 April), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 58 votes  in favour,  25 against  and  25 abstentions: 
29.10.  75 Official  Journal  of the  European  Communities No C 248/3 
1. Introduction 
1.1. Monetary  integration  is an essential  element  in 
the fusion  of the  nine  national  economies  in the 
European  Community  into  an economic  unit.  Lack  of 
close  coordination  of monetary  policy  is bound  to be 
a major  stumbling  block  to integration  in other 
fields,  too.  On the  other  hand,  a common  monetary 
policy  not  backed  up by an equally  far-reaching 
harmonization  of economic  policies  would  lead  to 
distortions  in the exchange  of goods  and  services  and 
in money  flows  and  capital  movements  in the 
Community.  A  common  position  on  external 
monetary  policy  would  also  be out of the question. 
1.2. It  is necessary  therefore,  to examine  and 
consolidate  carefully  all the progress  which  has  been 
made  towards  monetary  integration.  The  objectives  of 
monetary,  economic  and  structural  policy,  must,  first 
of all,  be  sufficiently  coordinated,  and  the 
instruments,  and  the  way  they  are  used,  must  be 
suited  to their  purpose.  It is important  to pay 
scrupulous  attention  to all these  aspects  also  when 
contemplating  a possible  change  in the  terms  of 
reference  of the  European  Monetary  Cooperation 
Fund. 
2. The  scope  of the Commission's  proposal 
2.1. The  Commision's  proposal  for  a regulation 
seeks  to extend  the powers  assigned  to the Fund  by 
the Council  Regulation  of 3 April  1973  so that  they 
include  in particular: 
2.1.1.  closer  coordination  of national  monetary  and 
credit  policy. 
2.1.2.  closer  coordination  of  external  monetary 
policy,  particularly  capital  movements  and 
exchange  rates,  and  concertation  of policy  in 
respect  of international  capital  markets. 
3. The  coordination  of internal  monetary  policies 
3.1. Monetary  and  credit  policy  is in all  the 
Member  States  to a greater  or lesser  extent  the 
province  of the  central  banks.  If the  view  is taken 
that the  Monetary  Cooperation  Fund  should  be a 
preliminary  stage  on the  way  towards  a European 
central  bank  system,  the Commission  proposal  is a 
logical  step  in the  dynamic  process  of steadily increasing  the Fund's  powers  in a area  which  comes 
under  the specific  responsibility  of the central  banks. 
3.2. The  Committee  considered  whether  in the 
present  situation  in the Community  conferring  these 
powers  on the Monetary  Cooperation  Fund  could  do 
much  to help  European  economic  and  monetary 
integration.  Two  sets  of observations  are important 
here: 
3.2.1.  Existing  coordination  arrangements 
3.2.1.1.  If  coordination  in monetary  matters  has 
not been  completely  effective  in recent  years,  this  can 
not be attributed  to the lack  of suitable  structures. 
3.2.1.2.  The  Monetary  Committee  and  the 
Committee  of Governors  of the Central  Banks  of the 
Member  States  of the  EEC  have  been  assigned 
advisory  powers  in this  field,  the power  of decision 
resting  with  the Council  of Ministers.  The  powers  of 
the Monetary  Committee  are founded  in the Treaty 
of Rome.  Those  of the  Committee  of Central  Bank 
Governors  derive  from  the  Council  Decisions  of 
8 May  1964,  22 March  1971  and  18 February  1974. 
3.2.1.3.  It  seems  to the  Committee  then  that  the 
task of  coordinating  Member  States'  internal 
monetary  policies  which  the Commission  proposes  to 
assign  to  the  Fund  is  already  entrusted  to 
Community  bodies.  If their  action  in the  fields  of 
monetary  and  exchange  rate  policy  has  failed  to 
preserve  Community  cohesion,  the  reasons  for  this 
must  be  sought  both  in the  worsening  of the 
international  economic  climate  and  in the insufficient 
coordination  of  economic,  social  and  financial 
policies  at Community  level. 
3.2.1.4.  In  particular,  it is unlikely  that  the transfer 
of the  tasks  of monetary  policy  coordination  at 
present  carried  out  by the  Committee  of Central 
Bank  Governors  to the  Board  of Governors  of the 
Monetary  Cooperation  Fund,  without  other  action 
being  taken  in the crucial  area  of harmonization  of 
economic  policies,  could  appreciably  alter  the 
existing  situation,  seeing  that  the  membership  of 
these  bodies  is the same. 
3.2.2.  The  Community's  internal  economic  and 
monetary  policy 
3.2.2.1.  The  Committee  does  not  doubt  the 
desirability  of gradually  establishing  a European 
central  bank  system,  responsible  for monetary  policy 
No C 248/4 Official  Journal  of the  European  Communities 29.10.  75 
in the EEC.  But  monetary  measures  can  only  make  a 
significant  impact  on the  economic  situation  if they 
are coupled  with  more  basic  economic  and  financial 
measures.  Since  there  has  clearly  not  been  a 
convergence  of Member  States'  policies  in the 
non-monetary  fields,  European  monetary  policy 
cannot  produce  more  satisfactory  results  whatever 
Community  body  is in charge  of it. 
4. The  coordination  of external  monetary  policies 
4.1. The  term  'external  monetary  policy'  is used  in 
the proposal  for a regulation  in a very  general  sense. 
It must  therefore  also  be interpreted  in a wide  sense  as 
covering  questions  ranging  from  intervention  on the 
foreign  exchange  markets  to changes  in exchange  rate 
relations  and  supervision  of capital  movements. 
4.2. At  European  level  the Committee  of Central 
Bank  Governors  and  the Monetary  Committee  share 
the responsibility  for coordinating  external  monetary 
policies.  Their  role  is advisory;  only  the Council  of 
Ministers  has powers  of decision  in this  field. 
4.3. The  Monetary  Committee  has  advisory 
powers  in respect  of movements  of capital  (Articles 
69, 71 and  73 of the Treaty  of Rome)  and  changes  in 
the exchange  rate  relationships  between  Community 
currencies  (Article  7 of the  Council  Decision  of 18 
February  1974  on the attainment  of a high  degree  of 
convergence  of the economies  of the Member  States 
of the EEC). 
4.4. Since  the  Council  Resolution  of 22 March 
1971  on the  phased  establishment  of economic  and 
monetary  union  in the Community,  the Committee  of 
Central  Bank  Governors  has  been  the body  through 
which  EEC  central  banks  consult  with  one  another 
on intervention  on the foreign  exchange  markets  and 
work  out  new  measures  in this  field  (Section  III, 
paragraph  7). 
4.5. The  Committee  would  observe  that  the 
Commission  proposal  as it now  stands  does  not state 
whether  the advisory  functions  to be assigned  to the 
Monetary  Cooperation  Fund  will  continue  to be 
performed,  concurrently,  by  the  Monetary 
Committee  and  the  Committee  of Central  Bank 
Governors,  or whether  the powers  will  be transferred 
from  these  two  committees  to  the  Board  of 
Governors  of the Fund. 
4.6. If  no  change  in the  existing  powers  is 
intended,  the Committee  does  not  see what  purpose would  be served  by adoption  of the  Commission 
proposals. 
4.7. On  the other  hand,  if, as was  not the case,  the 
idea had  been  to  transfer  to  the  Monetary 
Cooperation  Fund's  Board  of  Governors  the 
functions  at present  carried  out  by the  Monetary 
Committee  and  the  Committee  of Central  Bank 
Governors,  the  following  problem  would  arise: 
assuming  that  the  Monetary  Cooperation  Fund 
developed  into  a European  central  bank  system,  the 
latter  would  find  itself  responsible  for  performing 
tasks  which  in the Member  States  are,  in part  at least, 
the province  of the  government  (in  particular, 
changing  parities).  To preserve  the  Member  States' 
powers,  the  Council  of Ministers  would  almost 
certainly  insist  on issuing  directives  to the Fund,  and 
later  to the European  monetary  high  authority  which 
developed  out of it. Yet the full  authority  in a specific 
field  now  enjoyed  by the  Central  Banks  ought  to 
constitute  one  of the  key  features  of the  future 
decision-making  body  of the  Community  in the 
monetary  field. 
4.8. The  Council  of Ministers  itself  spoke  on these 
lines  in its Resolution  of 22 March  1971  when  it said 
that the central  banks  in the Community  contributed, 
within  their  own  specific  sphere  of responsibility,  to 
achieving  the objective  of stability  and  growth  in the 
Community.  The  transfer  to  the  Monetary 
Cooperation  Fund  of powers  which  at national  level 
do not  belong  to  the  Central  Banks  should 
consequently  be subject  to the  condition  that  such 
transfers  of powers  must  be compatible  with  the 
declared  aim,  viz.  that  the  Monetary  Cooperation 
Fund  should  be conceived  from  the  start  as the 
nucleus  of a future  European  decision-making  body 
on monetary  matters  with  its  own  sphere  of 
responsibility. 
4.9. With  this  development  in mind,  any  proposal 
to confer  new  powers  on the Monetary  Cooperation 
Fund  in the  field  of external  monetary  policy 
should  exclude  matters  which  now  come  under  the 
responsibility  of  the  Monetary  Committee, 
particularly  where  at national  level  they  are decided 
by the  governments  and  not  by the  Central  Banks, 
such  as alteration  of parity  relations. 
4.10 It  has  to be realized,  in the  Committee's 
view,  that  under  the  present  circumstances  the 
activities  of the Monetary  Cooperation  Fund  cannot 
be otherwise  than  very  limited  and  that  the Fund  can 
hardly  assume  new  responsibilities  as long  as the 
requisite  conditions  are  lacking,  and  the  economic 
policies  pursued  in the  Member  States  produce 
increasingly  divergent  inflation  rates,  as long  as the 
oil crisis  continues  to give  rise  to the  most  diverse 
29.10.  75 Official  Journal  of the  European  Communities  No  C 248/5 
problems  of  adaptation,  and  as  long  as  the 
disequilibrium  in balances  of payments  remains  at the 
present  level.  These  are  problems  which  require 
above  all greater  political  agreement  between  the 
Member  States  and  which  can  hardly  be solved  by 
simply  giving  the  Monetary  Cooperation  Fund 
additional  powers. 
4.11.  There  is therefore  insufficient  basis  at the 
present  time  for  a common  exchange  rate  policy 
towards  the  outside  world.  Greater  convergence 
requires  obligatory  consultation,  especially  by the 
governments  of the  Member  States.  This  is a 
prerequisite  for  the  Monetary  Cooperation  Fund's 
operations. 
5. Conclusions 
5.1. If  the  view  is taken  that  the  Monetary 
Cooperation  Fund  should  be  a stepping-stone 
towards  a European  central  bank  system,  the 
immediate  transfer  to it of full  responsibility  for 
coordinating  national  monetary  policies  might  be 
thought  useful,  providing  that  the transfer  of powers 
was part  of  an  overall  strategy,  involving 
implementation  of appropriate  policies  in all the key 
fields,  for achievement  of the economic  and  monetary 
unification  of Europe. 
The Commission's  proposal,  being  limited  in object 
and isolated  from  this  wider  setting,  is not  likely  by 
itself  to  bring  about  any  improvement  in the 
consultation  and  coordination  which  already  takes 
place. 
5.2. For  these  reasons  the  Committee  does  not 
think  that  the  proposed  appointment  of  a 
Director-General  of the  Fund  with  a small  team  of 
assistants  is an immediate  necessity.  The  proposal 
will no  doubt  have  to  be  acted  upon  when 
circumstances  become  such  as to allow  the  Fund  to 
extend  its activities. 5.3. However  desirable  progress  in the  field  of 
monetary  cooperation  may  be  and  however 
important  it is to support  the Commission's  efforts  in 
this direction,  it  is  difficult  to  approve 
implementation  of the  proposal  in its present  form. 
The emphasis  should  be placed  more  on coordination 
of internal  monetary  and  credit  policies,  without 
which  a Community  external  monetary^  policy  would 
not be viable. 
5.4. The  main  requirement  is not  extension  of the 
Community's  instruments  but  common  objectives  in 
economic  and  monetary  policy.  To harmonize  only 
the instruments,  or possibly  even  amalgamate  their 
supervisory  elements,  would  be failing  in the  urgent 
task of so aligning  central  bank  and  government 
policies  as to make  it possible  also  to establish  a 
common  internal  and  external  monetary  policy,  a 
common  capital  market,  and  a common  policy  on the 
Eurodollar  market. 
5.5. Key  elements  in such  a monetary  policy  would 
include  the  return  of all Community  currencies  to 
stable,  but  adjustable  parities  in relation  to one 
another  and  the  dismantling  of controls  on capital 
movements  between  Member  States.  Progress 
towards  these  objectives,  which  the  Economic  and 
Social  Committee  has  always  strongly  supported,  is 
still way  behind  schedule,  since  the  Member  States 
unfortunately  fail  to show  the political  will  which  is 
absolutely  essential  for monetary,  and  along  with  it, 
economic  integration. 
Without  overlooking  the difficulties  which  worldwide 
instability  generates  in the  international  monetary 
system  and  which  have  doubtless  increased  over  the 
past year,  the  Committee  nevertheless  hopes  that 
Member  States'  governments  will  in future  show 
greater  recognition  of the  need  for  transfers  of 
sovereignty  and  will  be more  active  in their  support 
for integration. 
Done  at Brussels,  23 April  1975. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
No C 248/6 Official  Journal  of the  European  Communities 29.10.75 
ANNEX 
to the Opinion  of the Economic  and  Social  Committee 
The following  amendment  was  rejected  during  the discussion: 
Item 3.2. 
Replace  existing  text  from  item  3.2 onwards  by: 
'3.2. The  Committee  would  refer  to its Opinion  on 22 February  1973  on the  draft 
Council  decision  establishing  the Fund,  in which  it stated  in item  1.3 that  "the  European 
Monetary  Cooperation  Fund  should  not be set up merely  with  the intention  of merging 
the various  machinery  which  exists  for  the  settlement  of monthly  accounts  and  for 
short-term  financial  support.  It should  also  be the  first  stage  in the  setting  up of a 
Community  central  bank  system  and should  gradually  receive  the same  powers  as a central 
bank  has now,  on both  the domestic  and  external  fronts".  Further,  in items  1.4 and 1.5 of 
that Opinion  it was  said: 
"The  Fund  should,  therefore,  also  be able  to promote  the harmonization  of credit  policies 
and of the instruments  required  for the implementation  of a common  monetary  policy". 
"Assuming  that  similar  progress  is made  in the institutional,  economic  and social  fields,  it is 
indispensable  that  wider  powers  in respect  of monetary  policy  guidance  should  be 
conferred  on the Fund  by the early  adoption  by the Council  of new  decisions...". 
3.3. The  Monetary  Committee  and  the Committee  of Governors  of the Central  Banks  of 
the Member  States  of the EEC,  which  are composed  of top national  officials,  have  only 
been  given  advisory  powers  in this  field,  the power  of decision  resting  with  the Council  of 
Ministers.  The  powers  of the Monetary  Committee  are founded  in the EEC  Treaty  and  in 
the amended  Council  Decision  of 18 March  1958;  those  of the Committee  of Central  Bank 
Governors  derive  from  the Council  Decisions  of 8 May  1964,  22 March  1971,  21 March 
1972,  5 December  1972,  14 September  1973,  and 18 February  1974. 
3.4. The  coordination  of monetary  policies  in the  Community  by the  Monetary 
Committee  and  the  Committee  of Central  Bank  Governors,  assigned  this  task  by the 
Council,  has not so far been  completely  satisfactorv,  as indeed  emerges  from  the Opinions 
of these  two bodies  dated  9 January  1975  and 11 February  1975. 
3.5. If  the  action  of these  two  bodies  in the  monetary  field  has  failed  to preserve 
Community  cohesion,  the  reasons  lie, not  only  in the  worsening  of the  international 
economic  climate,  but also,  and  principally,  in the conditions  under  which  the two  bodies 
work. 
4. In  its previous  Opinion  of 22 February  1973,  the Committee  considered  that  the Fund 
should  be a first  stage  on the road  towards  a coordinated  system  of European  central  banks. 
But, far from  giving  the Fund  immediate  full responsibility  for the coordination  of national 
monetary  policies,  the present  proposal  for a regulation  is only  a first  step  in that  direction. 
In fact,  progress  towards  these  objectives,  which  the Economic  and  Social  Committee  has 
always  strongly  supported,  is still  way  behind  schedule,  since  the  Member  States 
unfortunately  fail  to sho^  the  political  will  which  is absolutely  essential  for monetary, 
and along  with  it, economic  integration. 
Without  overlooking  the  difficulties  which  worldwide  instability  generates  in the 
international  monetary  system  and  which  have  doubtless  increased  over  the past  year,  the 
Committee  nevertheless  hopes  that  Member  States'  governments  will  in future  show  greater 
recognition  of the need  for transfers  of sovereignty  and will  be more  active  in their  support 
for integration. 
29.10.75 Official  Journal  of the European  Communities No C 248/7 
The Committee  therefore  endorses  the proposal  for a regulation  on condition  that  it will  be 
a first  step,  to be followed  by others,  in the evolution  of the Fund  towards  a coordinated 
system  of central  banks.'  . 
Voting: 
for: 31, against:  61, abstentions:  19. 
Opinion  on the 
— proposal  for a Council  Regulation  on the opening,  allocation  and  administration  of 
the Community  tariff  quota  of 30 000 head  of heifers  and  cows,  not intended  for 
slaughter,  of certain  mountain  breeds,  falling  within  subheading  ex 01.02  A II b) 2 
of the Common  Customs  Tariff,  and the 
— proposal  for a Council  Regulation  on the opening,  allocation  and  administration  of 
the Community  tariff  quota  of 5 000 head  of bulls,  cows  and  heifers,  not intended 
for slaughter,  of certain  Alpine  breeds,  falling  within  subheading  ex 01.02  A II b) 2 
of the Common  Customs  Tariff 
The text  referred  to the  Committee  was  published  in the  Official  Journal  of the 
European  Communities  No  C 42 of 22 February  1975,  page  2. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 13 February  1975,  the  Council  referred  the abovementioned  proposals  to the 
Economic  and  Social  Committee  under  Articles  47 and  198  of the Treaty  establishing 
the European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 129th  plenary  session, 
held in Brussels  on 23 and 24 April  1975. 
The Opinion  is published  below: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the referral  on 13 February  1975  by 
the Council  of the European  Communities; 
Having  regard  to Articles  47 and  198  of the Treaty 
establishing  the European  Economic  Community; 
Having  regard  to the decision  taken  by its Bureau  on 
25 February  1975,  instructing  the  Section  for 
Agriculture  to draw  up an Opinion  on the matter; 
Having  regard  to the  oral  report  made  by the 
Rapporteur,  Mr Maher; Having  regard  to the Opinion  adopted  by the Section 
for Agriculture  at its meeting  on 3 April  1975; 
Having  regard  to the discussions  at its 129th  plenary 
session  of 23 and  24 April  1975  (sitting  of 23 April 
1975), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
with no votes  against,  and with  2 abstentions: 
1. The  proposal  for new  Council  Regulations  — 
on the opening,  allocation  and  administration  of the