CELEX: 51987PC0365
Language: en
Date: 1987-07-10
Title: Proposal for a COUNCIL REGULATION (EEC) introducing special rules for the financing of the common agricultural policy (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 365
Vol. 1987/0205
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                     COM(87 ) 365 final
                                                     Brussels , 10 September 1987
                                Proposai for a
                          COUNCIL REGULATION ( EEC )
         introducing special rules for the financing of the common
                             agricultural policy
                       (presented by the Commission )
C0M(87 ) 365 final
 ---pagebreak---                               EXPLANATORY MEMORANDUM
I , Introduction
            On 30 April 1987 the Commission submitted to the Council a
     proposal for a Council Regulation amending Regulation No 729 / 70
     on the financing of the EAGGF-Guarantee Section (*). The proposal
      involves replacing the current system of advance payments by a
     system of refunds . The aim of the proposal is to eliminate in
     the long run certain weaknesses noted in the application of the
     system of advance payments and to improve , from a structural point
     of view , the management of budget appropriations and the Commission 's
     assets .
            The Commission announced this reform as an integral part of
     its proposals of the future financing of the Community ( ) and so
     it remains .    This overall approach was confirmed , moreover , by the
     European Council at its meeting in Brussels on 29 and 30 June 1987 .
     The Commission proposal of 30 April 1987 will therefore be studied
     in accordance with the same timetable as the other proposals
     connected with the future financing of the Community ( ).
            However , for 1987 the European Council also agreed that
     observance of the budget limit for the EAGGF-Guarantee Section would
     be ensured by adjusting the system of advance payments . In the
     immediate future therefore ; as a temporary measure and without
     waiting for a decision on the Commission proposal of 30 April 1987 ,
     a system must be introduced to resolve the problem of the inadequacy
     of EAGGF-Guarantee Section appropriations in 1987 without any carry ¬
     over ( i.e. without extra cost ) to 1988 and subsequent financial
     years .
( 1 ) C0M ( 87 ) 212 final
(!) COM ( 87 ) 100 page 33
(*) C0M ( 87 ) 101 page 16
                                                                       » » •/. » •
 ---pagebreak---       ê
\                                        2
      i
          The Commission has therefore decided to propose a transitional
    adjustment to the system of advance payments in the form of a
    suitable time-lag before making such payments to the Member States .
    The proposed transitional arrangements should therefore meet the
    following conditions :
    - they must enter into force as soon as the EAGGF Guarantee
      appropriations in the 1987 budget hâve been used up ;
   - their entry into force ipso facto involves an obligation on the
      Member States to pre-finance expenditure chargeable to the EAGGF
  ^ Guarantee Section ;
  - it will only be possible for payments by the Commission to resume
      at the beginning of the financial year 1988 when appropriations
      in the Community budget will again become available and such payments
      will be on a monthly basis .
            In order to take account of the financial burden which will
      have to be borne by the Member States in mobilizing the national
      funds to pre-finance expenditure by their disbursing authorities ,
      the Commission proposes granting certain Member States compensation
      in the form of full or partial defrayal of interest costs by the
  i   Community budget in accordance with the rules to be determined .
            To introduce this transitional adjustment , the Commission
      proposes supplementing Council Regulation ( EEC ) No 729 / 70 as
      indicated in the enacting terms annexed hereto .
            The definitive system of financing EAGGF Guarantee expenditure
      to be agreed on in all decisions taken in connection with the future
      financing of the Community will take over from these transitional
      arrangements without any interruption .
                                                                       • e •/* • •
                                                                              EN
 ---pagebreak--- ! 1 1 • Budgetary situation of the EAGGF and flnancial conséquences for
I        the Member States
             ♦ Following the decision on the fixing of prices for 1987 / 1988
        and taking account of the advance payments decided on to cover the
        needs of disbursing authorities until 31 July (+ 16.523 MECU ),
                                                ♦
        ‘it is estimated that the appropriations entered in the 1987 budget
        for the EAGGF Guarantee Section ( 23.003,5 MECU of which 42,7 is
        for Fisheries ) will have been used up by the beginning of
        November 1987 .     This means that the Member States will be required
        to mobilize the financial resources to cover needs in November
        and December 1987 , i.e. some 4.300 MECU .
               Advance payments against expenditure booked could be paid
        by the Commission to the Member States from the start of the
        second month following that in which the beneficiaries were paid .
        This means that on average the revolving fund of the Member States
        will be frozen for about a month and a half .     The annual financial
        burden which would result from any defrayal by the EAGGF of
        interest on this revolving fund must be calculated on the basis
        of one and a half months' expenditure .
               Expenditure by the Member States in November will be paid
        by the Commission at the beginning of January ; expenditure for
        December at the beginning of February . The same system will
        apply to subsequent months .
               The short-term ( three mpnths ) money market rates at the end
        of April 1987 were as follows :
        B/ L            7 , 30%                 IRL            10,69%
        DK             10,00%                   I              10,25%
        D               3,90%                   NL              5,19%
        GR             23,25%                   P              13,25%
        £              20,60%                   UK              9,16%
        F               8,05%                   ECU             6,91%
       2437 / 87                          erd /AM/kr
 ---pagebreak---                                                                                 i
       »                               4 -
«
       i
          In its proposal of 30 April 1987 ( COM 212 final ), the
   Commission took account of difficulties which certain Member States
   might encounter in setting up the system of refunding by allowing
   for the possibility of some or all of the interest being charged
   to the Community .
     i
                                          *
         To that end , and on the basis of the interest rates recorded
   at the end of April 1987 as indicated above , the Commission feels
   that defrayal of interest costs by the Community budget should be
   limited to four Member States : Greece , Spain , Ireland and
   Portugal .
  )      The Commission also proposes partial defrayal and calculation
  of the amounts owed to each Member State on the basis of the
  rate currently applicable to loans in ECU on the money market
   ( e.g. 6,8% at the beginning of July 1987 ).   The cost to the budget
  for one year is estimated by the Commission to be about 30 MECU .
n
                                                                    • • •/• • •
 ---pagebreak---  #
                                Proposai for a
                           COUNCIL REGULATION ( EEC )
                        introducing special rules for the
                  financing of the common agricultural policy
       THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
   > Having regard to the Treaty establishing the European Economic
    ! Community , and in particular Article 43 thereof ,
       Having regard to the proposal from the Commission ,
       Having regard to the Opinion of the European Parliament ,
O
       Whereas Council Regulation ( EEC ) - No 729 / 70 on the financing of
       the common agricultural policy ( 1 ) , as last amended by
       Regulation ( EEC ) No 3769 / 85 (*), introduced a system whereby
       budgetary funds earmarked to cover the expenditure of the
       Guarantee Section of the European Agricultural Guidance and        ■
       Guarantee Fund are made available to the authorities and
       bodies designated to pay out such expenditure ;
       Whereas it is necessary to adopt special rules enabling the
       Council to ensure the continuity of the payments provided for
       by the various arrangements for the common organization of
       markets ;
       Whereas the time-lag introduced by this Regulation must not
       result in carry-overs ( no extra cost ) to 1988 and subsequent
       financial years ;
       Whereas financial resources must be mobilized by the Member
       States in accordance with the needs of their disbursing
       authorities , while the Commission makes advance payments
       against the booking of the expenditure effected by the
       disbursing authorities ;
       Whereas the financing costs which might arise from the
       mobilization of resources by the Member States could be
       shared between some Member States and the Community ;
       Whereas these special rules will be reviewed in the context
       of all the decisions to be taken in connection with the future
       financing of the Community ;
     ' (Ь 0 ^ Ь 94 , 28 . 4.1970 , р . 13 .
       ( 2 ) ОЛ Ь 362 , 31.12.1985 , р . 17 .
                                                                •••/***
 ---pagebreak---   HAS ADOPTED THIS REGULATION :
,                                Article 1
   1 . The following subparagraph shall be added to Article 4(2 ) of
       Régulation ( EEC ) No 729 / 70 :
       " However , after the credits allocated to the EAGGF Guarantee
         Section for the financial year 1987 have been used up , the
         financial resources earmarked to cover the expenditure
         referred to in Article 1(2 ) shall be mobilized by the
         Member States in accordance with the needs of their disbursing
         authorities ."
  2 . The following provision shall be added to Article 5(2 ) ( a ) of
       the Régulation :
       " However , as from January 1988 , the Commission shall order
         only monthly advance payments against the booking of
         expenditure paid out with the financial resources referred
         to in the third subparagraph of Article 4(2 ),"
 3 . The following Article shall be inserted In the Régulation :
                                 " Article 5a
       To accommodate any difficulties which certain Member States
       might encounter in setting up the system provided for in the
       last subparagraph of Article 4(2 ), appropriate measures
       enabling some or all of the interest to be charged to the
       Community may be adopted according to the procedure laid
       down in Article 13 ."
 •                                 Article 2
Detailed rules for the application of this Regulation shall be
adopted in accordance with the procedure laid down in Article 13 .
The Commission shall frame the rules in such a way that the
time-lag does not result - In any carry-over ( no extra cost ) to
1988 and subsequent financial years .
                                   Article 3
This Regulation shall enter Into force on the third day
following its publication in the Official Journal of the
European Communities .
This Régulation shall be binding in its entirety and directly
applicable in ail Member States .
Done at Brussels ,
                                        For the Council
                                         The President