Council Regulation (EC) No 942/98 of 20 April 1998 amending Regulation (EC) No 724/97 determining measures and compensation relating to appreciable revaluations that affect farm incomes
Date: 1998-04-20
Institutions: Council of the European Union
Subjects: EU aid, agri-monetary policy, aid to agriculture, farm income, monetary compensatory amount, representative rate

6. 5. 98

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EN

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Official Journal of the European Communities

L 132/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 942/98

of 20 April 1998

amending Regulation (EC) No 724/97 determining measures and compensation
relating to appreciable revaluations that affect farm incomes

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EEC) No 3813/92
of 28 December 1992 on the unit of account and the
conversion rates to be applied for the purposes of the
common agricultural policy (1), and in particular Article 9
thereof,

Having regard to the proposal from the Commission,

Whereas Regulation (EC) No 724/97 (2) determines
measures and compensation relating to appreciable re-
valuations of the agricultural conversion rate that affect
farm incomes; whereas that Regulation does not apply to
appreciable revaluations that may occur after 30 April
1998; whereas it should therefore be amended to cover
any revaluations which may occur in the period up to the
introduction of the single currency;

Whereas Article 4(3) of Regulation (EC) No 724/97
the maximum amount of aid shall be
provides that
reduced or cancelled if necessary as a function of the
effect on income of
the development of agricultural
conversion rates recorded during a certain observation
period; whereas, in order to avoid compensation which is
income actually
excessive in relation to the loss of
incurred, it is also necessary to take account of the market
situation;

the single currency on
Whereas the introduction of
1 January 1999 will put an end to fluctuations in agricul-
tural conversion rates for the Member States particpating
in the euro; whereas it is therefore appropriate to end the
observation period
on
31 December 1998;

those Member

States

for

helpful to extend the observation period to nine months
instead of six, and to provide for a further extension if a
subsequent appreciable revaluation occurs during the
observation period for the preceding appreciable revalu-
ation;

that

Whereas application of Article 4 of Regulation (EEC)
No 3813/92 means
the agricultural conversion
rate may not decline by less than 2,56 %; whereas, to
limit the risk of excessive compensation in cases of small
appreciable revaluations, aid should not be granted for the
amount corresponding to an appreciable part of less than
2,6 %;

Whereas decisions to reduce or cancel the second and
third tranches should also be taken in the light of the
market situation;

Whereas the method of taking the market situation into
account should be defined; whereas this method may
involve, on the one hand, comparing the development of
market prices in the Member State whose currency has
been appreciably revalued with that in the Member States
whose currencies have not been appreciably revalued
during the observation period and, on the other, consid-
ering how far operative events in the various sectors have
already occurred on the date of the appreciable revalu-
ation,

HAS ADOPTED THIS REGULATION:

Article 1

Whereas the observation period for the other Member
States may extend beyond 31 December 1998; whereas,
since the market situation is to be taken into account, it is

1.

the first subparagraph of Article 1(1) shall be replaced
by the following:

Regulation (EC) No 724/97 is hereby amended as follows:

(1) OJ L 387, 31. 12. 1992, p. 1. Regulation as last amended by
Regulation (EC) No 150/95 (OJ L 22, 31. 1. 1995, p. 1).

(2) OJ L 108, 25. 4. 1997, p. 9.

‘1.
This Regulation shall apply in the event of
appreciable revaluations occurring from 1 January
1997 and before 1 January 1999.’;

L 132/2

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EN

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Official Journal of the European Communities

6. 5. 98

2. Article 4 shall be amended as follows:

(a) paragraph 3 shall be replaced by the following:

The maximum amount referred to in para-
‘3.
graph 2 shall be reduced or cancelled if necessary
as a function of the effect on income of the de-
velopment of agricultural conversion rates recorded
during a certain observation period and taking
account, in the amount calculated in accordance
with the first subparagraph of paragraph 2, of the
market situation during that period.

shall

expire

obeservation

For the currencies of the Member States which
adopt the single currency pursuant to the Treaty,
on
the
period
31 December 1998. For the other currencies,
it
shall expire at the end of the ninth month fol-
revaluation.
lowing
However, where an appreciable revaluation occurs
in the course of
the observation period for an
earlier appreciable revaluation, the entire observa-
tion period shall not expire until the end of the
third month following that of the last revaluation.

appreciable

that

the

of

However, no aid shall be granted for that portion of
the amount calculated in accordance with the first
subparagraph of paragraph 2 and the first subpara-
graph of this paragraph equal to not more than
2,6 % in total of the appreciable revaluation oc-
curring between 1 May 1998 and 31 December
1998.’;

(b) paragraph 4 shall be replaced by the following:

‘4.
The amounts paid out under the second and
third tranches shall each be reduced, vis-(cid:133)-vis the
level of the previous tranche, by at least a third of
the amount paid out in the first tranche. However,
in cases where the amount of the first tranche of
aid is calculated by applying paragraph 4a, second
subparagraph, section (b), the reduction of at least
one third shall be calculated on the basis of the
amount of the first tranche which would have been
granted had paragraph 4a, second subparagraph,
section (b), not been applied.

The amounts paid out under the second and third
tranches of compensatory aid shall be reduced or
cancelled as a function of the effect on incomes of
the development of agricultural conversion rates

recorded until the beginning of the month pre-
ceding the first month of the relevant tranche and,
in the case of appreciable revaluation occurring
from 1 May 1998, taking account, in the amount
calculated in accordance with the first subpara-
graph of paragraph 2, of
the market situation
during that period.’;

(c) the following paragraph shall be inserted:

In the case of appreciable revaluation oc-
‘4a.
curring from 1 May 1998,
the market situation
shall be taken into account pursuant to the first
subparagraph of paragraph 3 and the second subpa-
ragraph of paragraph 4 in accordance with the
following method.

The amount of one or more tranches in one or
more sectors may be reduced when it has been
observed that:

(a) over the observation period referred to in para-
graph 3 or over the period between the begin-
ning of the preceding tranche and the begin-
ning of the month preceding the first month of
the tranche concerned, the market price for the
Member State concerned was on average equal
to, or higher than, the average market prices in
the Member States whose currencies had not
been appreciably revalued during the same
period. Market prices shall be compared using
an index of base 100 for market prices in
national currency on the date of the appreciable
revaluation;
or

(b) the relation between the dates of operative
events in the sector concerned and the date of
the appreciable revaluation is such that there is
no justification for concluding that the revalu-
ation had an impact
the period
considered.’.

throughout

Article 2

This Regulation shall enter into force on the day fol-
lowing that of its publication in the Official Journal of
the European Communities.

It shall apply to appreciable revaluations occurring from
1 May 1998.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Luxembourg, 20 April 1998.

For the Council

The President

J. CUNNINGHAM