CELEX: 51976PC0101
Language: en
Date: 1976-03-17
Title: Proposal for a DECISION OF THE COUNCIL on the level of the interest rate subsidy, provided for by Council Directive n°72/159/EEC on the modernization of agricultural holdings, to be applied in Italy (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (76) 101
Vol. 1976/0036
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 ---pagebreak---          COMMISSION OF THE EUROPEAN COMMUNITIES
                           ■. V                       COM(76)101 final.
               ,                                      Brussels , 17 March 1976
                                                                        I
                                     Proposal for a                       ,
                  \             DECISION OF THE COUNCIL
              on the level of the interest rate subsidy , provided for by
              Council Directive n°72/159/EEC on the modernization of ag­
              ricultural holdings , to be applied in Italy
                 )
                       ( submitted to the Council by the Commission )
           \
COMC76 ) 101/ final.
 ---pagebreak---                        EXPLANATORY MEMORANDUM
1 . Article c , paragraph 2 , second subparagraph of the Council Directive on the
    modernisation of farms provides that Member States can be authorized for
    a specified period ,
    a) to grant interest rate subsidies exceeding 5       if such action is
       warranted by the situation of the capital market in that Member State ;
    b) to lower the minimum    rate payable by the beneficiary to 2 fo in certain
       regions .
2 . The Italian Government has requested authorisation
    a) to grant in the Mezzogiorno and in the less-favoured regions of Northern
       Italy and Central Italy including the mountain areas an interest rate
       subsidy of 11
    b) to grant in the other regions an interest rate subsidy of 9 f°i
    c) to lower the minimum rate payable by the beneficiary to 2 fo in the
       Mezzogiorno and in the less-favoured regions of Northern Italy and
       Central Italy including the mountain areas .
3 . The Italian Government has requested , on the other hand , under the provisions
    of Article 19 , paragraph 1 , second subparagraph of the aforementioned Directhe
    that the expenditure resulting from the increased interest rate subsidy may
    be declared eligible .
4 . The rate of interest applied at present in Italy for long term agricultural
    loans is 13.4 %- If the subsidy was limited to 5       "the amount payable by
    the beneficiary would be 8.4      Too high an amount , bearing in mind the
    farmers who would wish to modernise their farms , would consequently endanger ,
    in Italy , the modernisation foreseen by the Directive , as only a very limi­
    ted number of farms would be in a position to bear the expense .
    The provision for a subsidy of 9 or 11      besides , leaves the net amount
    payable by the beneficiary above the minimum of 3 or 2 fo.
 ---pagebreak---                                 - 2 -
5 . The Mezzogiorno region and the less-favoured regions of Northern Italy
    and Central Italy , including the mountain areas , are characterised , as much
    from the general economic viewpoint as from their structure in the agri­
    cultural sense by a considerable backwardness in comparison with the
    other Italian regions . The level of personal incomes is below the national
    average and a lower agricultural productivity confirms this backwardness .
    This situation justifies , in the regions concerned , the provision for
    an increased subsidy and the proposed lowering of the rate remaining
    payable by the beneficiary . Besides , it must be noted that a great part of
    these regions is included in the Community list of less-favoured agri­
    cultural areas within the meaning of Council Directive 75/ 268/EEC of
    28th april 1975 on mountain and hill farming and farming in certain
    less-favoured areas under which the interest rate subsidy may not exceed
    7 %
6 . The raising of the interest rate subsidy beyond that provided for in
    Article 8 paragraph 2 of Directive no . 72/ 159/EEC becoming an essential
    condition for the effective application of this Directive , justifies
    the resultant expenditure being declared eligible for assistance from
    the Guidance Section of EAGGF.
7 . Given that the increased subsidy is due to the current state of the
    Italian capital market , the requested authorisation must be limited to
    a relatively short period .
 ---pagebreak--- THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community,
Having regard to Council Directive 72/159 /EEC of 17 April 1972 on the
modernisation of farms^\          > and in particular the second subparagraph of
Article 8(2 ) and the second, subparagraph of Article 19(l )»
Having regard to the proposal from the Commission ,
Whereas the second subparagraph of Article 8(2 ) of the said Directive
provides that Member States may be authorised to grant interest rate
subsidies exceeding 5 % if such action is warranted by the situation of the
capital market in the Member States and to lower the minimum rate payable by
the beneficiary to 2 % in certain regions ;
Whereas the Italian Government has requested authorisation to raise the level
of interest rate subsidy to 9 ^t and in the Mezzogiorno and the less-favoured
regions of Northern and Central Italy including their mountain areas to
11$ and to lower the minimum rate payable by the beneficiary to 2$;
Whereas the Italian Government has furthermore requested that the expenditure
resulting from the .increased subsidy be declared eligible for assistance
Whereas the actual current rate of 13^4 % in the said Member State for long
term agricultural loans and the proposed interest rate subsidies of 9 and 11#
means that the beneficiary is called upon to bear an interest rate above the
minimum required by the Directive ;
Whereas the Mezzogiorno and the less-favoured regions of Northern and
Central Italy , including their mountain areas , are clearly backward in
their economic and agricultural development in comparison with other regions ;
Whereas EAGGP participation in the expenditure resulting from the increased
 subsidy is recommended ,
HAS DECIDED AS FOLLOWS :
 ( 1 ) OJ No L 96 , 23.4.1972 , p. 5 and 7
 ---pagebreak---                      - 2 -
                    Article 1
The Italian Government is authorised to raise the interest rate subsidy
provided for in the first subparagraph of Article 8 ( 2 ) of
Council Directive 'JZ/         of 17' April 1972 to W% the Mezzogiorno
and the less-favoured regions of Northern and Central Italy including
their mountain areas and to 9$ in the other regions .
                    Article 2
The Italian Government is authorised to lower the minimum rate payable
by the beneficiary provided for in the first subparagraph of Article
8(2 ) of the said Directive to 2% in the Mezzogiorno and the less-
favoured regions of Northern and Central Italy including their
mountain areas .
                     Article 3
The expenditure incurred by the Italian Government persuant to
Article 1      shall be eligible for assistance from the Guidance
Section of the EAGGP within the limit fixed     by   the first subpara­
graph of Article 19 ( 3 ) of the said Directive .
                     Article 4
The present Decision shall be valid until 31 December 1977 *
                     Article 5
This Decision is addressed to the Italian Republic "
                                               For the Council
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                                                                                                     D-+o           A. 3 . 1976
    S 1, Lira of tha              rwrH :             8 103
                                        Premonition               Crnncil pooirion relating to the level of interest
       P. T:th of th rsilm s rate subsidies, forftmnn in Article 8 . paragraph 2 . of the Council
           Directive Fo . 72/ 1 59/E^-C of 17 April 1972 , concerning the modernisation of fa-nrnJ
           to be applied in Italy.                                                                                                    'r
            L il Hv'r ;
                                Article fi o " Council Population Fo . 729/70/fec of 28 April 1?70 .
                                rsl acirjg           the financing of the common e-srieultviral policv.
             cycrflvw r* fri p^ten i              1R to the relativ®ly hi^h interest rates of Italian loans ,
                                                the Government of Italy vrish to encourage an increa-sed
               investment in the framework of the modernisation of farms by prantin/? hiphcr
               interest rate subsidies .
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|i    6.*    Credits to h rr'tVi fr*i fr^r*                              Fore
I1    a      »
li    Ccrr~      ;
1    1 o Due to this proposition, the e^enditure could "be increased by 80,?.
•    2 » The Itali ,-n law f: :t"i the c^str. of thin nearnr** at th-n fol ? crinr ceilings i
                                      1976 : 23 »? ri11^
                                      1977 : 29.2 rma                                                                      j
 ---pagebreak--- Be inbursement by E.A„G.G.F« will be at the rate of 25%, of which 75% shall
     -paii?;. in +,ho year folio* ring the expenditure by the Member State and the
remainder the following year .          Payments by the Guidance Section of the E.A.G.G.P.
are estimated as - follows :                                '
   ïc-ar                          Membor State                 Re îmbursement
                                  Expenditure                      EAGGP. ( at 25%)
                                       mua                          mua
   1 C 76                     •        23.3
   1077                                29.2                         4.5
   vjt S                    j                                       1.0
   1979                    ,                                        2.0
It is estimated that 40 > of the costs to PEOGA is due to the increase in
interest relate rates .
These amounts will enter into the global estimates for this Directive ,
without need to modify the Budget .