ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (79)231
Vol.1979/0095

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COMMISSION OFTHEEUKOPEAN COMMUNITI
COM(79)231 final
Brussels -25th April 1979
COMMISSION COMMUNICATION TOTHE COUNCIL
LOME CONVENTION
FOURTH EUROPEAN DEVELOPMENT FUND <1975 )
REQUEST FOR SUPPLEMENTARY CONTRIBUTIONS FOR 1979
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COM (79)231 final

1.Initscommunication totheCouncil C0M(78)660 final of23November 1978
theCommission submitted itsrequest relating tothecalling-in ofthe
Member States *contributions totheEuropean Development Fund ,for 1979 -
Initsdecision of18December 1978 theCouncil complied with theCommission
proposal andauthorized anamount of420million EUAfor1979 »ofwhich
400million EUAwastobeallocated tothefourth EDPand20million EUA
totheprevious EDPs .
Thefirst instalment of210million EUAwascalled inon10January 1979 *
The second instalment of210million EUA istobecalled inon2July 1979 *
2.TheCommission 'srequest ,which wasdrawn upattheendofOctober 1978 ,
wasbased essentially ontwofactors :firstly ,theEDF'scash situation
on15September 1978.(230 million EUA)andsecondly ,estimated expenditure
forthewhole of1978 ,which wasthen putat340million EUA (78million
forthefirst ,second andthird EDFs and262million forthefourth EDF).
Thesituation has ,however ,changed substantially since then .
3.Expenditure for1978 ,estimated inOctober at340million EUA ,infact
rose to394million EUA (74million forthefirst ,second andthird EDFs
and320million forthefourth EDF).
Itwastherefore principally theincreaBe infourth EDFexpenditure
(Lom£ Convention )which wassignificantly higher than anticipated .This
development ismost felicitous atatime when ourACPpartners ,inthe
negotiations fortherenewal oftheLom£ Convention ,arelevelling mounting
criticism against theCommunity concerning thelowutilization rate of
payment appropriations ,which intheview oftheACPStates points toan
inadequate level ofexecution offourth EDFoperations .Thefacts show ,
therefore ,that these complaints areunfounded .
4*Ananalysis oftheresults ofthemost recent three –month period ,in
particular thefirst twomonths of1979 »proves that theupward trend inthe
rate ofdisbursements ftom theEuropean Development Fund iscontinuing

apneacowparodwiththoresultsforthecorresponding quarterofthe
precedingyears
i
78/79quarter77/78quarter Riseinexpenditure
(inmillionEUA)(inmillionEUA)inmillionEUAj
1!in%
1
December 62 47 +15 +31X
Januaryι
ιi
+ 6430 !♦34 !
i♦113X
February i
i1
1
I
Total 126 77 +49 +64X
Itwouldappearfromaglanceatthesefiguresthatthenationalauthorities
oftheACPStates,whicharebeginningtobecomemuchbetterinformedabout
thewaytheFundoperates,havemadeconcertedeffortstogetprojectsmoving
effectively.Itisclearthatfromnowonexpenditure fromtheFundwillbe
atamuchmoresustainedratethaninthepast.Itisnotunreasonable to
estimatethataveragemonthlyexpenditureonprojectsin1979(notincluding
Stabex)couldbearound40millionEUA,i.e.,anoverallfigureof480millionEUA
forthewholeoftheyear.Giventhatatotalamountof420millionEUA,
includingStabex,hasbeenauthorizedfor1979th®CouncilDecisionof
18December1978,oneofthemainreasonsforthelowestimatesbecomes
obvious.
3«AsecondreasonistobefoundintheestimatesmadelastOctoberfor
Stabex,forwhichanamountofonly34millionEUAwasenteredinthe1979
forecasts.
Itwasnotpossibleatthetimetoforeseetheverypoorgroundnutharvestsin
SenegalandGambiaortheunfavourable economicsituationa.sregardsironore,
whichwillleadMauritaniaandLiberiatosubmitrequestsforverylargetransfers.

Thedropinexportearningsfrom-theseproductsandfromotherproducts
normallycovered "byStabexhasmeantthatitisnecessarythisyearnotonly
tomobilizetheappropriations ofthenormalinstalmentfor1978(75million)
butalsotheunexpendedbalancesofthe1976and1977instalments andeven
theproceedsofthereplenishments thattookplacein1978.
AnnexAgivesdetailsofprojectedcommitments anddisbursements under
Staboxin1979*Totalcommitments amountto155millionEUA,fromwhich
nearly28millionEUAshouldbedeductedinrespectofadvancesalreadymade
in1978.Disbursements wouldthereforeamounttoalittlemorethan127
millionEUA,i.e.,anadditionalcashrequirementof93millionEUA
(since34millionEUAwerealreadyincludedinthecontributions authorized
bytheCouncilDecisionof18December1978).
6.Inshort,asfarasthefourthEDPisconcerned,expenditurefor1979
shouldbeasfollows:
(millionEUA) CouncilDécision18.12.1978Currentestimâtes
Expenditure on
projectsandprogrammes 374 '480
Stabex 34 127
Total 408 607
TheCommissionisthereforerequestingthatanadditionalamountof
607-408-199millionEUA,roundedupto200millionEUA,shouldbe
placedatitsdisposalfor1979*

-4-
This amount would bodivided among theMomber States asfollows :
X Amounts inEUA
Federal Republic of 25.95 51900 000 -–
France Gexmany
•25.95 51900 000 .--
Italy 12.- 24000 000,–
Netherlands7»95 15900 000.–
[Belgium 6.25 12500 000.–
[Luxembourg 0.20 400 000.–
[United Kingdom 18.70 37400 000.–
{Ireland0.60 1200000.–
Denmark2.40 4800 000 .–
TOTAL 100.- 200 000 OOOé–
7.TheCommission feels that itshould point outthat ,according tothe
second subparagraph ofArticle 7(2)oftheInternal Agreement ,"ifthe
contributions areinsufficient tomeet theactual requirements ofthe
Fund inthebudget year inquestion ,theCommission shall submit proposals "
forsupplementary payments t.otheCouncil ".This text issupplemented
byArticle 2(4)oftheFinancial Regulation ,which stipulates that
supplementary payments areinsuchcases "dueand/"toJbemadewithin
asbrief aperiod aspossible ,which maynotinanycase bemore than
three months ".
TheCommission fully appreciates that this request totheCouncil will
present considerable problems fortheMember States .Itisnotused to
taking suchsteps ,since itisonly thesecond time intwenty years that it
hasdone so,whereas in1978 ,when thecashsituation wastheopposite ofwhat
itisnow ,itdidnothesitate toforego calling inthesecond instalment of
theMember States *contributions (147.5 million EUA).Ifitworks oneway,
itmust work theother .

Inorder "toallow theMember States or.ough time toaajurx their fcnd£*»*Hry
procedures tomeet itt ;request ,theComai ssion proposes toallow the
supplementary payments tobemade intwostages :
On15May 1979 » "theMember States would becalled upon topaytothe
Commission inadvance the second instalment ofthe contributions authorized
bytheCouncil Decision of18December 1978 ,forthebulk oftheStabex
transfers will have tobemade roundabout that date .
On4August 1979 1 Msniber States would then becalled upon topaytothe
Commission theadditional amount (200million EUA )which isrequested from
the Council inthis communication .The estimated disbursements show that
onthat date ,onthebasis ofamonthly amount of40million EUAforthe
projects ,theFund will have exhausted itscaeh-on-hand payments due .to
creditors will therefore have tobesuspended ifthesupplementary amounts
requested arenotpaid into theFund .

ANNEX A
EXPECTED COMMITMENTS AND DISBURSEMENTS UNDER STABSX FOR 1979
1.Carried ,over from 1975 (after replenishment ofthe
instalments forGabon and .Kali )1 0
2.Carried over from 1976 (sifter replenishment ofthe
instalment for :
Gabon 6703310
Mali (estimate : 450000) 32924689
3»Carried over from 1977 (taking into account
transfers still tobemade for :
Sudan (estimate : 1000000)?
Uganda (estimate : 1285000) •41242097
4*Replenishments made in1978 :
Cameroon (cocoa paste^ 463558
Fiji (copra oil.1975 ) 615140
Fiji (copra oil,1976 ) 1253399 2332097
5»Annual instalment 1978 75000000
6*Twoannual instalments (1977and1978 )onthe
allocation for the new members
(5-of5million EUA) 3333333
7.Maximum available for1979 154832216
1Appraisal ofthelate application submitted byKenya ledtoarejection
^ofthis application .
Tokeep thebooks inorder ,thefollowing amounts hadbeen committed before
31December 1978 :2.4forUganda ;0.5forCape Verde ;7forSudan ;
3.25 forPapua NewGuinea .Theappraisal procedures nowreveal that
estimates foroutstanding 1977 transfers canbeconfined tothe
-amounts forSudan andUganda alone .
After taking into account apayment of13761EUAstill tobemade by
Cameroon after adjustment totheexchange rate used byCameroon*s paying
.agent .
Notwithstanding anypayments byGhana ,Ivory Coast ,Madagascar and
Sierra Leone (maximum 32million EUA),such repayments being possible '
butunlikely .

ANNEXA
Carriedover: 154832216
8*To"bededucted:advancesmadefor1978:
–Senegal(groundnutoil) 16000000
–Senegal(groundnutoilcake)3000000
–Gambia(groundnuts) 1510000
–Mauritania(ironore) 7000000
–Tonga(bananas) 160000 27670000
Q#Kaximumcashrequirements 1271622161
Thisfiguremayturnouttobeveryslightlylowerif,whenTonga's
applicationissettled,itappearsthattoomuchhasbeenpaidin
advance.Thefigurealsodependsontheexactamountofthetransfers
toMali.SudanandUganda.