CELEX: 51977PC0482
Language: en
Date: 1977-10-28
Title: Proposal for a COUNCIL REGULATION (EEC) relating to the fixing of representative conversion rates in agriculture (submitted to the Council by the Commission)

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COM (77) 482
Vol. 1977/0151
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 ---pagebreak---         COMMISSION OF THE EUROPEAN COMMUNITIES
                                                              COM(77)482 final       .
                                                              Brussels , 31 October 1977
                                        Proposal for a
                                   COUNCIL REGULATION(EEC )
                    relating to the fixing of representative conversion
                        ,           rates in agriculture
                          ( submitted to the Council by the Commission)
CCM(77 ) 482 final.
 ---pagebreak---                              EXPLANATORY MEMORANDUM
1 . In autumn 1976, the Commission presented to the Council a draft regulation
     relating to the continuous adjustment of representative rates and the gradual
     dismantling of monetary compensatory amounts .
     The Council could not come to agreement on that proposal , which is replaced
     by the present one . At the Council meeting of 11 May 1977 the Commission
     announced that a new proposal would be prepared .
2 . The main principle of the new proposal resides in dismantling those MCAs in
    existence at the time of adoption of the proposal on a different basis from
     that applied to any MCAs created after that date in response to currency
     changes . Further , this proposal drops the introduction of a ceiling on
    MCAs that would call for an automatic adjustment of the representative rate
     of the currency concerned .
                         seven
3 . The proposal sets a / -year period for dismantling existing MCAs . In view
     of the size of existing differences this seems the best way to avoid too
     great an impact on production or consumption . To this end , the green rates
     of currencies with high MCAs would be adjusted annually so that the MCAs
     existing at the time the regulation came into force would be run down at the
                               seven
     latest by the end of the 7 -year period .
     Existing monetary compensatory amounts would thus be divided by seven .
                                                     th
     The MCAs would have to be reduced by one-seven each year . The reduction
     would be achieved by a devaluation or revaluation of the green currency
      concerned . The MCAs would be reduced on the day on which the prices for
     the new marketing year came into effect .
 4 . Given the present monetary differences , the adjustment procedure laid down
      in the proposal would lead in two years to a difference of one point in the
      case of the Benelux countries . The application of the MCAs in question would
      then no longer be appropriate because of their very slight effect , and the
      Commission would automatically abolish them .
 5 « Any MCAs introduced in the future , in addition to the amounts existing
      on the date indicated in paragraph 3 would, subject to the cut-off point
      (para* 6 ), be eliminated annually at the time of the new price fixing.
 ---pagebreak---                                  - 2 -
6. However , to avoid excessive changes in national currency terms in prices
   and other amounts fixed in units of account , an annual cut-off point should
   be provided for . This would have the effect of limiting for the marketing
   year in question the automatic devaluation and revaluation of the green
   currencies concerned , resulting from the reduction of both the old and
   new CICAs , to a maximum of 5 % which could , however , be exceeded at the
   request of the Member State concerned . In cases where , as a result of
   application of the cut-off point , the " new" part of the MCAs could not
   be fully eliminated , the backlog thus created would in principle be
   cleared the following year , subject of course again to application of the
   cut-off point .
7. In any case this system should only be regarded as a minimum programme ,
   as more rapid dismantling would always be possible .
8. The Commission considers that the proposed system would make it possible
   to restore the single market in agricultural products in the Community
   in the long term , account being taken of parallel progress towards economic
   and monetary union . The proposed method would not have too great an
   impact on production or consumption of agricultural products , nor on the
   economy in general .
9»   This proposal , which is presented at the request of the Counoil , does
    not take account of the prospects for introducing the EUA in agriculture .
     That matter is dealt with in separate communication to the Counoil
     (Doc. COM(77 ) 880 final )*
 ---pagebreak---                     Propo8al for Counoil Regulation (EEC ) NO
                                of
               relating to the fixing of representative conversion
               rates in agriculture
THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Community, and in particu­
lar Articles 28 , 43 and 235 thereof ,               ~                   :" ;
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ,
Having regard to the opinion of the Monetary Committee ,
Whereas Council Regulation No 129 on the value of the unit of account and the
exchange rates to "be applied for the purposes of the common agricultural policy(l ),
as last amended "by Regulation ( EEC ) No 2542/73 ( 2 ), fixed the value of the agri­
cultural unit of account and the conversion rates to "be applied for the purposes
of the common agricultural policy between this unit of account and the national
currencies , on the one hand , and "between the national currencies themselves , on
the otherj whereas Artiole 3 of that Regulation enables derogations to be made
from the rules originally established to meet oases of exceptional monetary prac­
tises ; whereas , since the utilization of floating rates by some Member StateB , this
provision has been resorted to on numerous oocasions for the purpose of introdu­
cing and modifying the representative rates ;
Whereas , since 1975 , these rates have been applied by all the Member States ; where­
as they serve to harmonize the rates used in oonnection with the agricultural poli­
cy with market rates ; whereas they thus contribute particularly to a diminution of
the monetary compensatory amounts introduced by Council Regulation ( EEC ) No 974/71
of 12 May 1971 on certain measures of oonjunctural policy to be taken in agricultu­
re following the temporary widening of the margins of fluctuation for the curren­
cies of oertain Member States ( 3 ), as last amended by Regulation ( EEC ) No 557/76
 ( 4 );
Whereas movements in the currencies of certain Member States have several times led
to monetary compensatory amounts suoh as to defeat the original purpose of the sys–
 ( 1 ) OJ No 106 , 30.10.1962 , p. 2553/62 .
 ( 2 ) OJ No L 263 , 19.9.1973 , p. 1 .
 ( 3 ) OJ No L 106 , 12.5.1971 | p. 1 .
  ( 4 ) OJ No L 67 , 15.3.1975 , P. 1 .                                       1
 ---pagebreak---  tern 5 whereas thess amounts were introduced to prevent     short–term changes
 in exchange rates from having immediate repercussions on agricultural prices
 expressed in national currency, whereas maintaining them permanently has a
 disturbing effect on the unity of the agricultural market and distorts compe­
 tition ;
Whereas , in addition , this reasoning is equally valid in respect of the differen­
 tial amounts introduced "by Council Regulation ( EEC ) No 1569/72 of 20 July 1972
 laying down special measures for colza and rape seed (5 )9 as last amended "by Re­
 gulation (EEC ) No 3477/73 ( 6 );
Whereas , in these circumstances , the system at present in force should "be altered
"by the introduction of measures that will have a direct effect on representative
 rates and hence on the level of compensatory amounts and differential amounts ;
 whereas the new system should operate "by continuous adjustment of these rates ;
 whereas the latter should be amended regularly by reference to changes in the mar­
 ket rates of the currencies concerned , taking into account on the one hand moneta­
 ry compensatory amounts already in effect and , on the other , any amounts that may
 be introduced in the future ; whereas provision should be made that in principle
 the latter are to be abolished each year , while the former could be run down gra­
 dually ;
 Whereas , however , the impact of these measures should be limited , particularly as
 regards their effect on producer and consumer prices ; whereas to this end a suf­
 ficiently long dismantling period should be set ; whereas , further , representative
 rates should be changed 6nly within reasonable limits and provided existing diffe­
 rences between prices are not inoreased or new ones introduced ,
 HAS ADOPTED THIS REGULATION 1
   265)) 0J0J NoNo LL 357
                      167 ,
                          .
                            25.7.1972 , p. 9 .
                            28.12.1973 , p. 6 .
 ---pagebreak---                                 Article 1
 1 . The provisions of this Regulation shall supplement those of Regulation
      No 129 .
2 . The provisions of Article 3 of Regulation No 129 may not be applied in
     such a way as to introduce or increase monetary compensatory amounts .
                                Article 2
1 . The representative rate of a currency shall be adjusted once a year in
     accordance with the following provisions .
2. Tfe^re 6n raters shall be adjusted so that the monetary compensatory amounts
     are reduced each year :
                                       seven
     ( a ) firstly , over a period of       years ;
           – by              points in Belgium. Luxembourg and the Netherlands*
                                               *
           - by             points in Germany
           - by             points in France
           - by              points in Ireland*
           - by              points in Italy*            #
           - by             points in the United Kingdom
     ( b ) and secondly , by the amount they have increased for the Member State
           concerned sin® the last annual fixing of representative rates .
3 . However , the representative rate must not be adjusted , as the result of the
     application of paragraph 2, by more than 5 % per year .
     Where , due to the 5 % limit , the adjustment is less than that resulting
                            représentât ive
      from paragraph 2 , the         rate of the currency in question shall be
      adjusted the following year in such a way as to reduce the monetary amounts
      by the number of points by which the adjustment could not be made the pre­
      vious year . However , in no case may the representative amount be adjusted
      by more than 5 % .
^       S0
   One          of the monetary compensatory amounts applicable at the time the
   Regulation comes into effect .
 ---pagebreak--- 4 . The adjustments shall take effect at the beginning of the marketing year
    for the products in question or , in the absence of a marketing year , on
    dates to be determined .
5 . The previous paragraphs may be derogated from , in that monetary compensatory
    amounts may be desmantled more quickly .
                            Article 3
1 . The Council , acting by a qualified majority on a proposal from the Commission ,
    shall adopt the adjustments to the representative rates .
2 . Any implementing rules shall be adopted in accordance with the procedure
    laid down in Article 26 of Regulation ( EEC)No 2727/ 75^, as last amended
                                     8
    by Regulation ( EEC ) No 1143/ 76 , or , depending on the case , in the correspon­
    ding Article of the other agricultural Regulations .
                            Article 4
    For the purposes of this Regulation , the representative rate means the
    conversion rate to be used when the operations to be carried out pursuant
    to the acts relating to the common agricultural policy or the specific
    regulations adopted under Article 235 of the Treaty require sums expressed
    in the currency of one Member State or in units of account to be expressed '
    in the currency of another Member State , and vice versa .
                            Article 5
    This Regulation shall enter into force on the third day following its
    publication in the Official Journal of the European Communities .
    This Regulation shall be binding in its entirety and directly applicable
    in all Member States .
Done at Brussels,                                      p°r the Council ,
                                                      The President
 70J No L 281 , 1.11.1975, p.1
80J No L 130, 19.5.1976, p.1