CELEX: 51975PC0410
Language: en
Date: 1975-07-23
Title: PROPOSAL FOR A REGULATION SETTING UP A FINANCIAL MECHANISM (submitted by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (75) 410
Vol. 1975/0158
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak---  COMMISSION OF THE EUROPEAN COMMUNITIES
                                              COM(75)410 final
                                          Brussels , 23 July 1975
           r
                      PROPOSAL FOR A REGULATION
                  SETTING UP A FINANCIAL MECHANISM
             ( submitted by the Commission t « the Council ;
COM(75 ) 410 final
 ---pagebreak---                          PROPOSAL FDR A REGULATION
                    setting up a financial mechanism
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic 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 conditions incompatible with the proper functioning of the Community
could arise from the economy of a Member State 's "being obliged , when in a
special situation , to bear a disproportionate burden in the financing of
the Community budget ;
Whereas , in accordance with the guidelines laid down by the Heads of Government
at Paris on 10 December 1974 and further developed by them in Dublin on 10
and 11 March 1975 » such conditions should be prevented from arising during the
process of convergence of the economies of the Member States by providing for
a payment from the budget of the Communities to the Member State in question ;
Whereas the Treaty does not provide speoifio powers for creating such a
mechanism ; whereas Article 235 must therefore be used for this purpose ;
HAS ADOPTED THIS REGULATION :
 ---pagebreak---                            Article 1
       A financial mechanism is hereby set up , under the conditions set out
below , consisting in payments from the budget of the Communities to Member
States in a special economic situation whose economies bear a disproportionate
burden in the financing of that budget .
                           Article 2
       Upon application from a Member State , submitted not later than
30 June with a statement of reasons , the Commission shall assess the facts
of the situation having established that all the following criteria would
be met :
( a)   the per capita gross domestic product (GDP ) in the Member State in
       question is less than 85 i° of the average per capita GDP in the
       Community ;
(b )   the rate of growth of per capita GDP in real terms is less than 120$
       of the average rate in the Community ;
(0)    the payments by the Member State to the Community for the current
       financial year , pursuant to the Decision of 21 April 1970 on the
       replacement of Financial Contributions from Member States by the
       Community's Own Resources ,^ exceed by more than ten per cent ( 10%)
       the amount which it would have to pay if the budget of the Communities
       was financed by the Member States by reference to the share of their
       GDP in the total GDP of the Member States in the same financial year .
       The figures referred to in ( a) and (b ) shall be calculated , as moving
averages , from the results for the previous three years .
       The calculations provided for in this Artiole shall be made using
current market exchange rates .
1 OJ No L94 , 28 April 1970 , p. 19-
 ---pagebreak---                                  - 3 -
                              Article 3
       When the Commission has assessed the facts of the situation , it
shall , if necessary , enter in an appropriate subdivision of the "budget
for the year following the year in which the Member State 's application
was made an appropriation to the amount of the provisional payment ,
calculated as follows :
 ( a)  the excess amount calculated as provided in Article 2(c ) shall "be
       divided into steps each equal to five per cent ( 5$) of the amount
       referred to in Artiole 2(c ) in fine :
(b )   as a percentage of each step , the payment shall he graduated as
       follows :
       Step                                           Percentage payment
       from 0 to 5$                                         nil
       from 5.0001$ to 10$                                  50$
       from 10.0001$ to 15$               .                  60$
       from 15.0001$ to 20$                                 70$
       from 20.0001$ to 25$                                 80$
       from 25.0001$ to 30$                                 90$
       above 30$                                           100$
(c)    in no circumstances may the payment exceed either :
       ( i ) the net transfers made "by the Member State in question
              during the current financial year under Article 38 of the
              Financial Regulation of 25 April 1973 » * not allowing for
              payments made to that State under this Regulation ,
       ( ii ) or : the total payments made by that State to the budget of
              the Communities for the current financial year in respect of
              VAT or pursuant to Artiole 4(2 ) and ( 3) of the Decision of
              21 April 1970 , whichever is the less .
1 OJNoL 116, 1 May 1973, p.l
 ---pagebreak---                         Article 4
      Where the current account of the balanoe of payments of the Member
State in question , calculated from a moving average of the three years
preceding the current financial year ,. at current market exchange rates ,
shows a surplus , the amounts to "be referred to in respect of the current
financial year for calculating the excess amount referred to in Article 2(c )
for the purposes of implementing Artiole 3 shall "be replaced respectively "by :
- the payments made by the Member State to the Community in respect of VAT
  or pursuant to Article 4(2 ) and ( 3 ) of the Decision of 21 April 1970 ;
                          t
- the amount which that State would have had to pay on the basis of the
  proportion of its ODP in the total GDP of the Member State to finance
  the part of the budget not covered by the Own Resources referred to in
  Article 2 of the Decision of 21 April 1970 .
                         Article 5
      The payments , calculated at current market exchange rates , shall be
converted into the budgetary unit of aooount in force .
                         Article 6
      The total amount of the payments which may be granted in respect of
a given financial year shall not exceed three per cent ( 3%) of the total
expenditure chargeable to that financial year under Article 17 of
Regulation No 2/71 of 2 January 1971 implementing the Deoision of 21 April
1970    or two hundred and fifty million units of account , whichever is
the greater .
1 OJ No L 3 » 5 January 1971 » p.l
 ---pagebreak---        Should the total payments calculated as laid down m this
 Regulation exceed the above limit , the payments shall be reduced
 proportionately .
                             Article 7
       At the request of the Member State concerned , a 75 f° advance against
 the provisional payment shall be made at the beginning of the year
 following the year of the application .
       After the account for revenue and expenditure has been drawn up ,
and once final figures for the data referred to in this Regulation are
available ) the Commission shall , on the basis of those figures , calculate
the final amount of the payment and make any adjustments necessary.
                             Article 8
       Where a Member State has received payments under this Regulation for
three consecutive years , the Commission shall undertake a special examination
of the situation of that State and shall take all suitable steps reflecting
Community solidarity , on the basis of its assessment of the convergence of
economic situations and policies .
                             Article 9
       Gross domestic produot for the purposes of this Regulation shall be
defined by reference to the European System of Integrated Economio Accounts.
       For the purposes of Article 4 the current account of the balance of
payments shall be taken to cover goods , services and unrequired transfers
as defined by the Statistical Office of the European Communities .
                             Artide 10
       This Regulation shall enter into force on 1 January 1976 *    It shall be
applicable for a trial period of seven years . Not later than the end of the
sixth year , the Commission shall report to the Counoil on the application of
the financial mechanism and if necessary make appropriate proposals .
 ---pagebreak---       This Regulation shall be binding in its entirety and directly-
applicable in all Member States .
                                        Bone at Brussels ,