CELEX: 51980PC0041
Language: en
Date: 1980-02-01 00:00:00
Title: RECOMMENDATION OF THE COUNCIL DECISION ON THE STAND TO BE ADOPTED BY THE COMMUNITY AT THE INTERNATIONAL NEGOTIATIONS ON THE AMENDMENT OF CERTAINS PROVISIONS OF THE ARRANGEMENT ON GUIDELINES FOR OFFICIALLY SUPPORTED EXPORT CREDITS

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (80) 41
Vol. 1980/0016
 ---pagebreak--- Disclaimer
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
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 ---pagebreak---                                                                COM(80)41 final
     COMMISSION                                                Brussels , 1st February 1980
       OF THE
EUROPEAN COMMUNITIES                                           FOR OFFICIAL USE ONLY
   General Secretariot
                                RECOMMENDATION OF THE COUNCIL DECISION
                          ON THE STAND TO BE ADOPTED BY THE COMMUNITY AT THE
              INTERNATIONAL NEGOTIATIONS 'ON THE AMENDMENT OF CERTAINS PROVISIONS OF THE
                .  ARRANGEMENT ON GUIDELINES FOR OFFICIALLY SUPPORTED EXPORT CREDITS
            C0M(80 ) 41   final
 ---pagebreak---                           EXPLANATORY MEMORANDUM
On 4 April 1978 the Council adopted a decision on the application of
certain guidelines in the , field of officially supported export credits .
As a result of this decision , the guidelines set out in the informal
arrangement negotiated on 22 February 1978 have been applicable since
1 April that year in respect of officially supported export credits to
non-Community countries where the maximum repayment term , as defined
in that text , is no less than two years .
The Arrangement provides for a minimum cash payment , observation of max­
imum repayment terms for credit and minimum interest rates .     These terms
and interest rates vary according to the GNP per head , with the result
that recipient countries are subdivided into three categories :     rich ,
intermediate and poor .
Like the non-Community countries supplying export credits that are parties
to the Arrangement , the Community has up to now found that these guide­
 lines operate fairly satisfactorily .
                                >•
However , since the Arrangement on officially supported export credits
entered into force , world economic trends have made their impact on the
export credits sector .
The problem of tightening up export credits must be viewed in the light of
various considerations or factors , namely :
    ( i ) the significant rise in interest rates on the capital market since
          the Arrangement entered into force and the gap between these rates
          and the minimum rates laid down in the guidelines ;
 ---pagebreak---          • •        .•  . .. .   .  . .     .  ............ - - –-– - ■■  ■ •     ^.. 1 Miiifìi
                                         - 2 -
  ( ii ) the need to Limit budgetary expenditure connected with measures
          to facilitate the financing of exports ; „
( iii ) the increase of the gross national income in certain countries
          receiving credits ; ' ' I
  ( iv ) the increasing difficulties being experienced by the developing
          countries in obtaining credits or repaying the debts they contract .
          This state of affairs calls for firmer discipline in the export
          credits sector , accompanied by adjustments to the credit terms
          specified in the Arrangement . In the Commission 's opinion , firmer
          discipline is particularly necessary primarily as regards export
          credits to the rich countries . Official support should no longer
          be given for export credits intended for countries in Category I.
          However , in view of the current situation and the overrabrupt
          nature of such a solution , the Commission considers that attainment
          of the aims listed below could bring about a marked improvement :
               Ci ) officially supported export credits should be granted to the
                    rich countries only in exceptional cases and the repayment
                    term should in no event exceed five years ( it should be
                    mentioned that the actual understanding considers the limit
                    of five years as normal credit length for rich countries ),
                    and even then be subject to prior notification ;
             ( ii ) as market rates have risen significantly over the past months ,
                    it would be advisable to increase the rates currently specified
                    in the Arrangement by 1.5% in respect of the rich countries
                    and 0.5% for the intermediate countries .
                    Credit rates for the poor countries will remain unchanged .
                    The stagnation of growth in the industrialized countries and
                    the spiralling price of energy have hit the economies of those
                    developing countries which do not have oil very hard .
                    The new minimum rates will be reviewed annually as there can
                    be no certainty that the present levels will be maintained ;
 ---pagebreak---                                       - 3 -
( iii ) the present list of recipient countries , which is based on objective
        data , viz . the statistics on gross national income per head pub­
        lished by. the World' Bank , will have to be corrected .   The data
        concerned ( situation at 1975 ) no longer tally with the facts and
        takes no account of the accession of a number of countries to
        independence .   The new list to be compiled should also be reviewed
        at regular intervals so that countries may be transferred from one
        category to another if need be .
For the time being the Commission suggests that the other provisions of
the Arrangement should remain unchanged .      However , it may quite possibly
put forward further proposals in the quite near future should it prove
necessary or desirable to adjust or improve the Arrangement .
The above mentioned modifications of the Understanding could be presented
during the regular review of the Understanding next May .        However , taking
account of the rapid development of the matter , the Commission is of the
opinion that an urgent solution should .be sought before the review in
May .   In conclusion , the Commission considers it advisable that the
Council should approve the directives on the Community stand in this
matter and therefore recommends that it adopt the attached draft decision .
 ---pagebreak---                        Recommendation of the
                             COUNCIL DECISION
              on the stand to be adopted by the Community at
              the international negotiations on the amendment
              of certain provisions of the Arrangement on
              Guidelines for Officially Supported Export Credits
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
                           λ
and in particular Article 113 thereof ,
Having regard to the Commission 's recommendation ,
 ---pagebreak---                                  - 2 -
Whereas it is advisable that directives should be given on the stand to
be adopted by the Community at the international negotiations on the
amendment of certain provisions of the Arrangement on guidelines for
officially supported export credits ,
HAS DECIDED AS FOLLOWS :
                             Sole arti eie
At the international negotiations on the amendment of certain provisions
of the Arrangement on guidelines for officially supported export credits
the Commission shall state the Community 's stand in application of the
annexed directives .
It shall act in consultation with the special Committee provided for in
Article 113 of the Treaty , which shall assist it in its task .
                             >•
                           A
                                           Done at
                                           For the Council
                                           The President
 ---pagebreak---                                                                         ANNEX
 I.    Arrangement to which the present directives relate
                                                    Α
       These directives relate to the Arrangement on guidelines for
       officially supported export credits .
II . . Negotiating brief
       The Commission shall urge that the following amendments be made
       to the Arrangement :
       ( a ) List of countries :
             The list based on the World Bank statistics for 1975 will have
             to be reviewed in the light of the Bank 's statistics for 1977 .
             The current subdivision on the basis of GNPs of £ 1 000 and
             & 3 000 per head is to be retained .     Adjustments will there­
             fore consist solely of transferring countries from one of
             the existing categories to another on the basis of the World
             Bank 's more recent statistics .
       ( b ) Minimum interest rates :
             . repayment terms of between two and five years :      rich countries ,
               9.25% ;  intermediate countries , 7.75% ;    poor countries , 7.50% .
             . repayment terms of over five years :     intermediate countries , 8.25% ;
               poor countries , 7.50% .
       ( c ) Minimum repayment term :
             The maximum repayment term for an officially supported export
             credit granted exceptionally to a rich country shall in no case
             exceed five years .   If , in exceptional circumstances , a party
             to the Arrangement proposes to give its support to an operation
             of this kind , it shall give prior notification thereof in
             accordance with the procedure provided for in paragraph 9 ( a )
             of the Arrangement .   The repayment terms currently applicable to
             the intermediate and poor countries 'shall remain -unchanged .