CELEX: 51991PC0125
Language: en
Date: 1991-04-09
Title: PROPOSAL FOR A COUNCIL DECISION ON PROVISION OF FINANCIAL ASSISTANCE FOR ISRAEL AND THE PALESTINIAN POPULATION OF THE OCCUPIED TERRITORIES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                        C0M(91) 125 final
                                        Brussels, 9 Apr iI 1991
                             Proposal for a
                            COUNCIL PEdSlQN
                  on provision of financial assistance for
     Israel, and the Palestinian population of tiie Oocupied Territories
                     (presented by the Commission)
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                            ECTIANATORÏ MHCRANDTJM
1. Following the Coraraission cararaunication on additional financial aid for
   countries in the Middle East and the Mediterranean affected by the Gulf
   War of 28 February (O0M(91) 61 final), the Council has endorsed the
   principle of two schemes to provide financial aid for Israel and the
   Palestinian population of the Oocupied Territories, which are suffering
   in different degrees the adverse effects of hostilities in the Gulf.
   In the case of Israel, economic activity in general is suffering.      In
   the Oocupied Territories, the arrival of returning workers and a
   significant reduction in remittances from the Gulf states simply
   aggravate an already seriously deteriorated économie situation.
2. The aid will comprise a Conmunity loan of a sum equivalent to ECU
   180 million financed on the capital markets and non-relinbursable aid of
   up to ECTJ 87.5 million from the Community budget (1991). Before the
   relevant appropriations can be entered in the 1991 budget by means of a
   supplementary and amending budget, the celling for heading No 4 ("Other
   policies") in the financial perspective for 1991 must be raised. The
   Commission has duly made the necessary proposals. This action should
   help alleviate the adverse effects of the Gulf war on the populations of
   Israel and the Occupied Territories.
3. It has been agreed that these funds be used to provide Israel with
   financial aid in the form of a loan to support the country's balance of
   payments. The loan is to be topped up with an interest-rate subsidy of
   ECTJ 27.6 million, financed from the Community budget. Financial aid for
   the Oocupied Territories would take the form of an ECU 60 million grant
   from the budget to help to improve economic and social conditions and to
   integrate Palestinians returning from Kuwait (by providing Jobs,
   housing, hospitals, etc.).
4. Arrangements should be made to enable this financial aid to be used in
   ways suited to the specific problems of Israel and the Oocupied
   Territories. In the case of Israel, the operation will be carried out
   before the end of 1991; in the case of the Oocupied Territories,
   institutional constraints may require ijnplementation over a two-year
   period.
 ---pagebreak---                                     3
                      PROPOSAL FOR A COUNCIL DBCISICN
                      on financial jytd for Israel and
           the Palestinian population of the Oocupied Territories
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Eoonomic Community,
and in particular Article 235 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
whereas the Community has decided to mount an operation to give financial
aid to Israel and the Palestinian population of the territories on the West
Bank of the River Jordan and the Gaza Strip occupied by Israel (hereinafter
referred to as the "Oocupied Territories") in order to help alleviate the
adverse consequences of the war in the Gulf;
whereas the economic and financial capacity of Israel and of the Oocupied
Territories is such that financial aid to Israel should take the form of a
subsidized loan to provide medium-term support for its balance of payments
while that for the Oocupied Territories could take the form of grants;
Whereas the Community must have the means to undertake the said operation;
Whereas the amount of Community financial resources needed to pay for the
interest-rate subsidy and grant components of this operation has to be
estimated; whereas the appropriations actually available will be
established during the budgetary procedure in accordance with the financial
perspectives annexed to the Interlnstitutional Agreement of 29 June 19881;
Whereas the breakdown of funds as between Israel and the Palestinian
population of the Oocupied Territories is based on an evaluation of their
respective requirements in the light of the scale of the social and
economic effects of the war, the sections of the population affected and a
comparison of living standards;
Whereas the loan to Israel will have to be financed by tanmunity borrowing
on the capital markets; whereas this loan must be administered by the
Commission;
Whereas implementation of this operation is designed to contribute to the
achievement of Community objectives;
Whereas the Treaty does not provide, for the adoption of this Decision, for
powers other than those of Article 235,
HAS DECIDED AS FOLLOWS:
1 OJ No L 185, 15.7.1988, p.33.
 ---pagebreak---                                   Article 1
The Community shall provide financial aid of up to an estimated total of
ECU 247.5 million for Israel and the Palestinian population of the Oocupied
Territories.
                                  Article 2
1. Otoe financial aid for Israel to support its balance of payments shall
   be made available in the form of a medium-term loan of a principal
   equivalent to ECU 160 million for a maximum period of seven years.
2. The loan will be accompanied by an interest-rate subsidy to be financed
   from the general budget of the Community.
   The estimated cost to the Community of financing the subsidy in 1991 is
   ECU 27.5 million.
   The budgetary authority shall establish the avail able appropriations.
3. The loan and the related subsidy shall be accorded on the terras and
   conditions set out in Article 3.
                                  Article 3
1. To make the loan referred to in Article 2(1) the Commission is hereby
   empowered to borrow, on behalf of the Community, the necessary resources
   on the capital markets after consultation of the Monetary Committee.
2. The loan shall be made available to Israel in a single instalment. It
   will be paid to the National Bank of Israel.
3. The Commission shall establish the arrangements for payment of the
   interest-rate subsidy referred to in Article 2(2) and take the necessary
   implementing measures.
4. The borrowing and lending operations referred to in paragraph 1 shall be
   carried out using the same value date and must not involve the Ctammunity
   in the transformation of maturities, exchange or interest-rate risks or
   any other commercial risk.
5. The Commission shall take the necessary steps, if Israel so wishes, for
   inclusion in the conditions and possible application of an early
   repayment clause.
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6. At the request of Israel, and where circumstances permit an improvement
   in the interest rate on the loan, the Commission may refinance all or
   part of its initial borrowings or restructure the corresponding
   financial terms. Refinancing or restructuring operations shall be
   carried out in accordance with the conditions set out in paragraph 4,
   and shall not have the effect of extending the average duration of the
   borrowings œncerned or of increasing the amount of capital, expressed
   at the current exchange rate, outstanding at the date of the refinancing
   or restructuring.
7. All costs incurred by the Community in mounting and executing the
   operation provided for in this Decision shall be borne by Israel.
8. The Monetary Committee shall be kept informed of the progress of the
   operations referred to in paragraphs 5 and 6.
                                 Article 4
1. The financial aid for the Palestinian population of the Occupied
   Territories shall take the form of grants, the estimated cost of which
   to the Oammunity is ECU 60 million in 1991. The budgetary authority
   shall establish the appropriations available.
   The aid shall cover expenditure aimed at alleviating the social and
   economic problems facing the Palestinians following the Gulf conflict,
   such as health, education and housing, and also the technical assistance
   necessary to implement the operation.
   It will be accorded in instalments on the basis of general guidelines
   adopted in accordance with the procedure laid down in Article 5.
2. The Commission shall ensure that such funds, paid to provide the aid
   referred to in paragraph 1, are used in accordance with the objectives
   set out in this Decision by the beneficiaries, which shall be required
   to submit a programme specifying the use to be made of the funds, and
   afterwards a report on the actual use made thereof.
                                 Article 5
1. The Commission shall be assisted by a Committee composed of
   representatives of the Member States and chaired by a representative of
   the Commission.
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2. The representative of the Commission shall submit to the Committee a
   draft of the measures to be taken. The Committee shall deliver its
   opinion on the draft within a time limit which the Chairman may lay down
   according to the urgency of the matter. The opinion shall be delivered
   by the majority laid down in Article 148(2) of the Treaty in the case of
   decisions which the Council is required to adopt on a proposal from the
   Commission. The votes of the representatives of the Member States
   within the Committee shall be weighted in the manner set out in that
   Article. The Chairman shall not vote.
3. Measures adopted by the Commission shall be of immediate effect.
   However, if these measures are not in accordance with the opinion of the
   Committee, they shall be <3cmmunicated by the Commission to the Council
   forthwith.
   In that event, the Commission shall defer application of the measures
   which it has decided on for a period of two months from the date of
   communication.
   The Council, acting by a qualified majority, may take a different
   decision within the time limit referred to in the preceding
   subparagraph.
                                 Article 6
The Commission shall present to the European Parliament and the Council by
30 June 1992 an initial report on the implementation of the aid operation
carried out under this Regulation. A final report shall also be presented
as soon as the operation is completed.
Done at Brussels,             1991
                                                 For the Council
                                                 The President
 ---pagebreak---                                     >
                          FICHE FINANCIERE
                VOLET 1 : IMPLICATIONS FINANCIERES
1.   Intitulé de I'action :
     Assistance financière en faveur d'Israël      et  des populations
     palestiniennes desTerritoires Occupés.
2.   Liane budgétaire concernée :
     A déterminer    dans   le  caire  d'un   budget  rectificatif  et
     supplémentaire.
3.   Base légale :
     Article 235 du traité instituant la Communauté Européenne.
4.   Description de l'action :
4.1. Objectifs spécifiques de l'action :
     Les objectifs de cette action sont d'une part apporter un
     soutien à la balance des paiements d'Israël et d'autre part,
     pour ce qui est des populations palestiniennes des Territoires
     Occupés, de contribuer à améliorer la situation économique et
     sociale ainsi que d'intégrer les ressortissants rapatriés du
     Kowe i t.
4.2. Durée :
     1991 - 1992
4.3. Populations visées par l'action :
     L'ensemble  de   la population d'Israël      et  des  populations
     palestiniennes des Territoires Occupés.
5.   Classification de la dépense :
5.1. DNO
5.2. CD
6.   Quelle est la nature de la dépense :
6.1. Subvention à 100% pour l'action       en  faveur des  Territoires
     Occupés (60 millions d'écus)
6.2. Subvention pour co-financement avec d'autres sources du secteur
     public ou privé : néant
 ---pagebreak--- 6.3. Bonification d'intérêt : 27,5 MECUS sur un prêt hors budget de
     160 MECUS en faveur d'Israël
6.4. Autres       Garantie  budgétaire  relative  au   prêt  en   faveur
     d'Israël.
6.5. En cas de réussite économique de l'action, un remboursement
     partiel ou total de l'apport financier communautaire est-il
     prévu : non
6.6. L'action proposée impIique-t-elle une modification du niveau des
     recettes : non
7
  -   Incidence financière sur les crédits d'Intervention :
7.1. Mode de caI eu I :
     Les montants prévus tiennent compte des orientations politiques
     du Conse il.
7.2. Indiquez la part du mini-budget dans le coût total de l'action.
     Explicitez le mode de calcul :
     Sans objet.
7.3. Echéancier indicatif des C E . et C.P. (en MECUS):
               1991    1992
        CE.    87,5
        C.P.   57,5      30
     Quelles sont les dispositions      anti-fraudes  prévues   dans
     proposition d'action :
     Sans objet.
                 VOLET 2 : DEPENSES ADMINISTRATIVES
     L'action proposée impIique-t-elle une     augmentation   du  nombre
     d'effectifs de la Commission : non
     Montant des dépenses : Sans objet.
 ---pagebreak---            VOLET 3 : ELEMENTS D'ANALYSE COUT-EFFICACITE
1.   Objectifs et cohérence avec la programmation financière :
1.1. Object if(s) spécifiques(s) de l'action proposée.
     Cfr. 4.1.
1.2. L'action est-elle prévue dans la programmation financière de la
     D.G. pour les années concernées ?
     Oui.
1.3. Indiquez à quel objectif plus général           défini  dans la
     programmation financière de la D.G. correspond l'objectif    de
     I'action proposée :
     Stabilité politique de la région.
2.   Justification de l'action :
a.   Coût : 87,5 MECUS
b.   Effets dér ivés :
     Contribuer à la stabilité politique de cette zone.
c.   Effets multiplicateurs :
     Image et visibilité politique de la Communauté dans une zone de
     turbulence.
3.   Suivi et évaluation de l'action :
     Les actions feront l'objet d'une évaluation ex-post.
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                                                                 COM (91) 125 final
                                                      DOCUMENTS
EN                                                                                         11
                                  Catalogue number : CB-CO-9M54-EN-C
                                                               ISBN 92-77-71243-0
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