CELEX: 31974L0637
Language: en
Date: 1974-12-17 00:00:00
Title: Council Directive 74/637/EEC of 17 December 1974 granting medium-term financial assistance to the Italian Republic

20 . 12. 74                          Official Journal of the European Communities                         No L 341 /51
                                                               II
                                          (Acts whose publication is not obligatory)
                                                      COUNCIL
                                                  COUNCIL DIRECTIVE
                                                    of 17 December 1974
                      granting medium-term financial assistance to the Italian Republic
                                                         (74/637/EEC)
 THE COUNCIL OF THE EUROPEAN                                       Whereas, pursuant to Article 3 of Decision No
 COMMUNITIES,                                                      71 / 143/EEC, it is necessary to determine the
                                                                   economic policy undertakings to be given by the
                                                                   recipient Member State, to comprise both immediate
 Having regard to the Treaty establishing the European             stabilization measures relating especially to credit
 Economic Community, and in particular Article                     policy and public expenditure, and also medium-term
 108 (2) thereof ;                                                 measures ; whereas the nature of such measures has
                                                                  been discussed in detail in the Monetary Committee ;
 Having regard to the recommendation submitted by
 the Commission, following consultation of the Mone­              Whereas the main objective of these measures must
 tary Committee ;                                                 be to enable the Italian Republic to achieve, in 1975,
                                                                  a surplus of at least US $ 1 000 million on its trade
Whereas Council Decision No 71 / 143 / EEC             of 22      balance, leaving aside net imports of petroleum
March 1971 setting up machinery for medium-term                   products ;
financial assistance, lays down that up to the ceilings
 specified in that Decision, Member States should                 Whereas the United Kingdom has declared that its
 make available medium-term credits in the form of                present and foreseeable balance of payments diffi­
 mutual assistance to a Member State in difficulties or           culties prevent it from contributing towards financing
seriously threatened with difficulties as regards its             the assistance to the Italian Republic ; whereas the
balance of payments, with the Council determining                 United Kingdom has declared that it is nevertheless
the economic policy undertakings the recipient                    ready to continue renewable credits in favour of the
Member State is required to give ;                                Banca d'ltalia of the same amount as those which it
                                                                  granted within the system of short-term monetary
                                                                  support,
Whereas intensive consultations have been held in the
Monetary Committee to discuss the economic situa­
tion of the Italian Republic ; whereas these consulta­
tions have shown that this Member State is facing real
balance of payments difficulties which, if they                   HAS ADOPTED THIS DIRECTIVE :
continue, could jeopardize the proper functioning of
the common market ; whereas, in view of the present
economic situation of the Italian Republic and the
                                                                                          Article 1
state of its foreign exchange reserves, medium-term
financial assistance is a particularly suitable method
for countering these difficulties ;                               In accordance with Decision No 71 / 143/ EEC, the
                                                                  Italian Republic shall be given medium-term financial
(') OJ No L 73 , 27. 3 . 1971 , p. 15.                            assistance on the terms set out below .
 ---pagebreak---  No L 341 /52                      Official Journal of the European Communities                             20 . 12. 74
                        Article 2                             2. The rate of increase in central government
                                                              expenditure must not exceed 16% in the 1975
The amount of the financial assistance          shall  be     calendar year. In addition, the central government
 1 159-20 million units of account.                           shall take steps to ensure that other public authorities
                                                              and the' social security institutions limit the growth of
 Member States' contributions to this assistance shall        their expenditure in 1975 to a similar extent.
 be as follows :
                                  million units of account   3 . The deficit on treasury transactions must not
                                                             exceed Lit 8 000 000 million in 1975. By treasury tran­
           Germany                        403-3              sactions are meant those listed in Annex.
           France                         403-3
           Belgium/Luxembourg             134-4
           Netherlands                    134-4                                         Article 7
           Denmark                         60-4
           Ireland                         23-4
                                                              1 . The discrepancy between central government
                                                             current expenditure and revenue must be gradually
                        Article 3
                                                             eliminated over the next five years by measures to be
                                                             taken immediately by the Italian authorities .
The full amount of the assistance shall be made avail­
                                                             To this end :
able to the Italian Republic on 18 December 1974.
                                                             — the expenditure and number of semi-public bodies
The loan shall be repaid in 1978 in four quarterly                shall be restricted ;
 payments, the first falling due on 18 March 1978 .
                                                             — direct      taxation   shall   be  increased   and    the
The Italian Republic may repay all or part of the loan            campaign against tax evasion stepped up ;
 in advance, giving three months' notice.                    — special efforts shall be made to improve adminis­
                                                                  trative organization and to prevent the transfer of
                        Article 4
                                                                  powers from central government to regional
                                                                  authorities from leading to duplication of tasks .
The amount shall be made available to the Italian
Republic in United States dollars at the rate of             2. Over the next five years, monetary financing of
$ 1-20635 per unit of account, applicable for the            treasury requirements must be gradually and substan­
entire duration of the assistance .                          tially reduced.
The loan shall be granted at an interest rate of             3 . In public capital spending, priority shall be
7-5625 % . The interest shall be payable every six           given to the development of public transport and
months in arrears .                                          increased use of national energy resources.
                                                             4. Saving shall be made in the consumption of
                        Article 5                            petroleum products for domestic use .
The assistance shall be granted subject to the condi­        5. The competent authorities shall take the neces­
tions set out in Articles 6 and 7 relating to the            sary steps, where appropriate using available Commu­
economic and monetary policy measures to be taken            nity instruments, in particular the Social Fund, to
by the Italian Republic.                                     improve the operation of relocation services and the
                                                             vocational training of workers .
                        Article 6
                                                             6. Special efforts shall be made to promote foreign
 1.   The increase in total lending must be kept below       investment in Italy, particularly in the Mezzogiorno.
Lit 22 400 000 million in the 12 months to 31 March
 1975. For the period from 1 April 1975 to 31 March          7. Detailed plans for implementing the measures
 1976, this increase must not exceed Lit 24 700 000          provided for in this Aricle shall be communicated to
million .                                                    the Commission by 30 June 1975.
By total lending is meant the financing of treasury
deficits (excluding financial assistance to financial                                  Article 8
intermediaries), loans granted by aziende di credito
(banks) and specialized financial institutions and           Acting on a recommendation from the Commission,
bonds issued by undertakings and public authorities          the Council shall, by 1 December 1975, adapt for the
other than the treasury.                                     following year the conditions laid down in Article 6 .
 ---pagebreak--- 20 . 12. 74                           Official Journal of the European Communities                         No L 341 / 53
                         Article 9                                                      Article 10
The Commission, in collaboration with the Monetary                This Directive is addressed to the Member States .
Committee, shall regularly check that the economic
policy conditions laid down in Articles 6 and 7 are
being respected . For this purpose, the Italian authori­
ties shall communicate to the Commission all the                  Done at Brussels, 17 December 1974 .
necessary information .
                                                                                             For the Council
As regards the measures provided for in Article 6,
intermediate objectives shall be jointly agreed during                                         The President
the year by the Italian authorities and the Commis­
sion .                                                                                        M. DURAFOUR
                                                          ANNEX
                                       Treasury transactions referred to in Article 6
             1 . Budgetary receipts
             2 . Budgetary expenditure
                 Budgetary deficit (1 — 2)
             4. Extra-budgetary operations :
                 — as appear in the balance sheet of the treasury
                 — others
             5 . Overall treasury cash deficit (3 4- 4)
             6. Operations of the Cassa Depositi e Prestiti (CDP) and autonomous public undertakings :
                 — main outgoings of the CDP
                 — net financing requirement of autonomous public undertakings
             7 . Borrowing requirement (5 + 6)