CELEX: 51973PC1995
Language: en
Date: 1973-11-27
Title: DRAFT DECISION/ECSC of the Commission relating to the rates for converting the Member States currencies into the unit of account used in décisions, recommandations, opinions and communiques in fields covered by the Treaty establishing the European Coal and Steel Community. (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (73) 1995
Vol. 1973/0354
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                           COM(73) 1995 final
                                                           Brussels , 27 November 1973
                               DRAFT DECISION / ECSC  .
           of the  Commission relating to the rates for converting
        the Member States * currencies into the unit of account used
           in décisions , recommandations , opinions and communiques
                in fields covered by the Treaty establishing
                     the European Coal and. Steel Community- .
                  (submitted to the Council by the Commission)
  C0M(73 ) 1995 final
 ---pagebreak---                                                                    XIX/5 19/73-3
                              E:rPL.AJ7AT0P.T t1E!.lGimiPTM1
I.   Grçyunds for change
1.   Hitherto the rates for converting the various currencies into the unit
of account used for budgetary and financial operations arising from
implementation of the EGSG Treaty have been based on their gold parity as
declared to the International Monetary Fund,
2.   These conversion rates no longer reflect the relationship between
currencies as they aro at present on the exchange markets .
3.   As a result , distribution among levy-payers of the levi.es referred to in
Article 49 of the Treaty has become more of a burden for the coal and iron
and steel industries of the Member States whose currencies have appreciated
and favours those in Member States whose currencies have depreciated.
4.   Those industries which are at a disadvantage because of the retention of
conversion rates based on gold parities have already indicated in various
ways that they would like the Commission' to adopt for the calculation and .
payment of levies , conversion rato3 closer to economic reality.
5.   In order to place the ocllection of levies on a fairer basis , the
Comraission considers it necessary to adopt, new provisions as from 1 January
1974.                                                        " , .
 ■^his explanatory memorandum and the attached draft decision replace the
 tolevant parts of Document SEC(73)2846 final.
 ---pagebreak---                                        - 2 -                  x:x/5-i?/7>r;
II , Field of application of the new system
6.   The proposed dscision will have no effects outside the field of
applioation pf the EQ?0
7.   In the field covered "by the EC30 Treaty the calculation of the levies
referred to in - Article 49 and the drawing up of the ECSC operational "budget
and "balance -«heet must "be carried out in accordance with the new provisions .
The proposed decision 'will not change the equivalence in national currencies
of commitments arising from decisions taken with regard to aid, as a result
the balance of these commitments will he recalculated in units of account
in accordance with the new system when the ECSC "balance sheet is drawn up ,
On the other hand, the system of aid for coking coal and coke , which will "be
in force until 197&, will of oourse have to make use of the rates of
conversion into national currencies resulting from the new previsions
(Decision 73/287/ECSC of 25 July 1973, OJ No 259 , 15 September 1973, P .~36 to
42)7
8.   However, operations for which Commission decisions lay down specifio
measures on action to "be taken with regard to changes in conversion rates
must be excluded from the field of application of the proposed . decision.
What is involved is the operation of a clearing account relating to scrap
iron equalization transactions which were carried out before 30 November
1958 (Decision No 21/60 ECSC of 20 July 1960, OJ No 54, 24 August 1960,
PP* 1177-80), for the reasons indicated in the grounds for decision 2l/60 #
Confirmed ly the Co-art of Justice of the European Community by its
judgment in case No 37 /^4.
9.   A list   summarizing the effects in relation to the articles of the
Treaty is given in the Annex,
 ---pagebreak---                                        -•3-                       XIX/5 19/73-E
 III#   Principles and detailed rules of the new conversion system
 10 , For the currenoiea of those Member States which keep the exchange rates
 of their currencies in relation to each other within marrow margins - "the
                                                                          1
Community Tband" – it seems logical to adopt the " effective parities"      as
the conversion rates "between the unit of account and national currencies,
 since the " effective parities" constitute the basis of exchange relationships
"between those currencies ,
 11 , For the other currencies , the conversion rate - should also reflect their
depreciation or appreciation in relation to the currencies whose exchange
rates are "being kept within the Community "band.      However, instead of "basing
conversion rates on the market rates for one day, which could prove erratic,
the Commission proposes to "base the calculation on an average of the exchange
rates recorded during a given reference period.        In this way the
conversion rates for the other currencies will "be adjusted periodically on
the "basis of the average exchange rates of the currencies within the
Community "band recorded on the exchange market of the currency concerned
during the " reference periods ".    Except as regards the ECSC "balanoe-^sheet
( see section 13 "below), each reference period will "be the last month "but one
preceding a period of half a calendar year during which the conversion rates
are maintained.     However, there will "be no need to change the rate in
force where the difference "between this rate and the rate last fixed does
not exceed half the width of the Community "bandj i.e. 1.125/& at present ,
 1Ca In order to ensure identical periods of application in the two oases,
changes in the conversion rates for currencies which are "being kept
 within tho Community "band will follow a similar procedure.       The
  conversion rates will also "be applied "by . half calendar year periods*
  Gold parity or central rate , according to the oase .
 ---pagebreak---                                  -4~                   m/51 3/73 - 2
The rates adopted will be those recorded on the last working day of the
last month "but one preceding the half calendar year <*em«e?ned ».
13*   As regards the drawing up of the "balance-sheet , the Commission ,
following the example of other financial "bodies (for example the Bank ''
for International Settlements ), will take as "reference period'!
the last working day before the closing of the "balance-sheet .
IV . Consultation
14* As required "by Article 50(2 ) of the Treaty establishing the
ECSC , the Council of Ministers is "being consulted regarding the
decision relating to the rates for converting the Member States®
currencies into the unit of account used in decisions , reoommenjdations ,
opinions and communiques in the fields covered by the Treaty
establishing the ECSC .
 ---pagebreak---                                                                 XIX/5 19/73-E
                      DRAFT IECISIOIT 7i3CSC cf th£ Oo&nission
                                          _        n,r
             relating to the rates for converting the Member
             States 1 currencies into the unit of account used
             in decisions , recommendations, opinions and
             communiques in fields covered "by the Treaty
             establishing the European Coal and Steel Community:.
The Commission, of "the Europe; n Corinunities
Having regard to the Treaty establishing the European Coal and Steel Community f
and in particular Articles 8 f 14 f 26 and 50 thereof;
Having regard to Decision Mo        /EC3C of the Commission of                1973
relating to the definition of the unit of account used in its decisions ,
recommendations , opinions and communiques., in the fields covered by the Treaty
establishing the European Coal and Steel Community*-;         '
Whereas economic reality should be adhered to as closely as possible for
purposes «f conversion of the Member States * currencies into units of
account in the fields covered by the ECSC Treaty ;
After consulting the Council ;
HAS ADOPTED THIS DECISION":
 ---pagebreak---                                       - 2 -                    XI ;y5 19/ 73- -IL
 Conversion of the Member States * currencies into the unit of account used in
decisionsj recommendations , opinions and cocaininiquSs in the fields covered
"by the Treaty establishing the European Coal and Steel Community sh'-ll be
 carried out as follows s
 1 . For currencies whose rates are within the Community bard f "by using the
effective parity ( gold parity or central rate according to the individual
 case ) recorded on the last working day of a reference period as defined in
Article III "below.
 2,  For all other currencies , "by using a rate fixed by the Commission on
the basis of the average of the currency rates referred to in the preceding
paragraph and recorded on the exchange market of the currency concerned
during a reference period as defined in Article III below.      ITo change will
be made in the rates in force so long as the difference between them and
the rates last fixed does not exceed half the width of the Community band.
                                    Article . *
The rates established by application of the provisions of Article I shall
be applied by periods of half calendar years .
                                    Article   3
 The reference periods referred to in Article 1(2 ) shall be ;
 –    for the drawing up of the ECSC balance-sheet , the date of drawing up
      or, where necessary, the last working day before the date of drawing up ;
 –    for other operations the last month but one before the half calendar
       year     which the operations refer.
 ---pagebreak---                                     - 3 -                 XIX/5 19/733®
                                 Articled
This decisions
-   shall not apply to the ECSC administrative budget ;
-   shall not apply to provisions laying down speoifio measures concerning
    action to ho taken with regard to changes in conversion rates, in
    particular Decision 21/60/ECSC of 20 July 1960 ;
-   shall not change the value in national currencies of commitments arising
    from decisions taken with regard to aid, except for Deoision 73/287/ECSC
    of 25 Julj' 1973 concerning coking coal and coke for the iron and steel
    industry in the Community.    In these oases only the account estimated in
    units cf account may be altered.
                                 Article 5
The Commission shall inform the parties concerned of the conversion rates
laid down in accordance with the preceding Articles .
                                 Article  o.
In accordance with Articles I. II and III the conversions carried out shall
be used :
–   for the drawing up of the ECSC balance-sheet , as from 31 December 1973 ?
                            j
–   for the calculation of average values involved in the calculation of
    levies , as from the levies of 1974?
-   for other transactions, as from 1 January 1974#
This decision shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels,                19                       For the Commission
 ---pagebreak---                                                               XIX/5 1 9/73 - E
                                                              annex
                    Draft decision concerning the conversion
                       rates-' for: thetEQSC0tSflit:a6f aeconnfr^-.
   List summarizing the effects relating to the ECSC 's financial
                            operations
No    Article of                  Operations                   Effects
      the ECSC
      Treaty
                                                    4-
1        49               collection of levies        -In accordance with the
                                                       news provisions
2        49               Contracting of loans       "None , as this involves
                                                       contracts in accordance
                                                       with the law of the parties
         53(b )          Equalization mechanism jNone , as this involves the
                         for imported scrap          .winding up of mechanisms
                         iron                          relating to the period
                                                       before 30 November 1958*
                                                       The conversion rates
                                                       applicable are fixed in
                                                      Decision 21 /60 /fecSC
         54              Investments
                         – authorazation              Maintain the original
                            décisions                  equivalence in the
                                                       currencies involved
                         ~ contracts                   See 2
5        55              Besearch                      See 4
6        56              Reaaaptat ion ,
                         conversion                    See 4
7        9$              Coking coal                   See 1
8                        Operational
                         budget                        See 1
                         Balanc e-sheet                See 1