CELEX: 51990PC0073
Language: en
Date: 1990-02-20
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING REGULATIONS ( EEC ) NO 1676/85 AND ( EEC ) NO 1677/85 IN REGARD TO THE CONVERSION RATES AND MONETARY COMPENSATORY AMOUNTS TO BE APPLIED FOR THE PURPOSES OF THE COMMON AGRICULTURAL POLICY

COMMISSION OF THE EUROPEAN COMMUNITIES
                                           C0M(90) 73 final
                                           Brussels, 20 February 1990
                                 Proposal for a
                            COUNCIL REGULATION (EEC)
         amending Regulations (EEC) No 1676/85 and (EEC) No 1677/85 In
       regard to the conversion rates and monetary compensatory amounts
       to be applied for the purposes of the common agricultural policy
                         (presented by the Commission)
m&:
 ---pagebreak---                                                                    Czrry'W
                         EXPLANATORY MEMORANDUM
1. Under the agrlmonetary arrangements certain conversion rates are used
   between the ecu and the national currencies and it is possible to
    introduce exceptions to these.
    in view of the development of the financial tools available to
   traders and the rapidity with which they can be used it is proposed
   to extend the possibility of recourse to rates closer to reality as
   soon as the risk of distortion of the agricultural market of monetary
   origin becomes apparent.
    In addition to avoid any danger of disparity of treatment between the
   Member States it would be possible to specify the exchange rates to
   be used for common agricultural policy (CAP) purposes between the
   Member States currencies and those of non-member countries.
2. For the "floating" currencies, I.e. those not observing the European
   Monetary System 2.25% margin of fluctuation the market rate
   applicable for common agricultural policy purposes is calculated from
   the trend of the currency against the central rates of the eight
   "fixed" currencies respecting the margin of fluctuation of exchange
   rates.
    In view of the increasing use of the ecu it is proposed to adjust the
   rules to Introduce direct use of the ecu rates for determining the
   these market rates of the "floating" currencies and calculating the
   dependent amounts.
3. The present provisions on systematic dismantling of the monetary
   compensatory amounts (MCAs) In the pigmeat sector specify adjustments
   of the agricultural conversion rate within very strict limits. This
   restriction leads to frequent economically unjustified changes of the
   MCAs and moreover does not always allow the maximum gap of 8 points
   agreed between the pigmeat MCAs and the cereal MCAs to be respected.
   It Is proposed to relax the rules on determination of the conversion
   rate for pigmeat in order to resolve this problem in the dismantling
   of the pigmeat MCAs.
4. It Is proposed to take the opportunity to make a few minor
   clarifying changes in the wording of the Regulations.
 ---pagebreak---                                         - 3 -
                                  Proposal for a
                            COUNCIL REGULATION (EEC)
         amending Regulations (EEC) No 1676/85 and (EEC) No 1677/85
     In regard to the conversion rates and monetary compensatory amounts
      to be applied for the purposes of the common agricultural policy
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 43 thereof,
Having regard to the proposal from the Commission^),
Having regard to the opinion of the European Par I lament<2>,
Whereas   Council   Regulation    (EEC)   No 1676/85(3),   as   last   amended   by
Regulation (EEC) No 1636/87<4), set the conversion rates to be applied for
the purposes of the common agricultural policy; whereas Articles 2 (4) and
3 (2) of that Regulation make provision for derogations whereby conversion
rates corresponding more closely to economic reality can be used; whereas
the rules on the making of the derogations should        be adjusted In order to
take account of various specific situations;
Whereas,   in order   to improve   the clarity    of  the provisions    concerned,
European   Monetary  System   ECU   quotations   should   be  used   directly   for
calculation   of  the market   rates    referred  to  in Article    3(1) of    that
Regulation and Article 6(1) should be made more precise;
(1)   OJ No C
(2)   OJ No C
(3)   OJ No L 164, 24.6.1985, p. 1.
(4)   OJ No L 153, 13.6.1987, p. 1.
 ---pagebreak---                                          - 4 -
Whereas the method of calculation of the gap defined In Article 5(2)(b) of
Council   Regulation   (EEC) No 1677/85 (5) ,  as   last  amended   by   Regulation
 (EEC) No 1889/87<6), and of the conversion        rate referred   to   in Article
10(1) of that Regulation should be altered to take account of the market
rate defined In Article 3(1) of Regulation (EEC) No 1676/85;
Whereas   the provisions of 6a(2) of Regulation        (EEC) No 1677/85 prevent
within certain limits the creation of monetary compensatory amounts in the
pigmeat sector; whereas experience Indicates that these provisions should
be more accurately targeted,
HAS ADOPTED THIS REGULATION:
                                    Article 1
Regulation (EEC) No 1676/85 is hereby amended as follows:
1.   Article 2(4) Is replaced by the following:
     "4.  Derogation may be made from the agricultural conversion rate in
          accordance with the procedure laid down In Article 10(2), to permit the
          use of conversion    rates corresponding more closely        to economic
          reality and to prevent  a   risk of   market   distortion   of   monetary
          origin."
(5)    OJ No L 164, 24.6.1986, p. 6.
(6)    OJ No L 182, 30.7.1987, p. 1.
 ---pagebreak---                                                - 5 -
2.  The last Indent in Article 3(1) is replaced by the following:
           for the other currencies, on the basis of an average of the ECU
          rates    published    in    the    Official    Journal   of    the   European
          Communities,     Series    C,   over    a  period   to  be    determined   in
          accordance with the procedure laid down in Article 12."
3.  Article 3(2) Is replaced by the following:
    "2.   Derogation may be made from paragraph 1, in accordance with the
          procedure laid down in Article 10(2), In order to permit the use
          of conversion rates corresponding more closely to economic reality
          and to prevent a risk of market distortion of monetary origin."
4.  The following paragraph Is added to Article 3:
    "3.   A   specific   conversion     rate   close  to   economic   reality   may  be
          determined    In accordance with the procedure laid down in Article
          12   for  conversion    into a Member      State's   national    currency  of
          amounts    expressed    in   the   national    currency   of   a   non-member
          country."
5.  In Article 6 (1) the words "if they satisfy the following conditions"
    are replaced by "if all of the following conditions are met".
                                       Article 2
Regulation (EEC) No 1677/85 is hereby amended as follows:
1.  Point(b) in the second subparagraph of Article 5 (2) is replaced by the
    fol lowing:
    "(b) in respect of Member States other than those referred to In (a),
          to the percentage difference for the currency of the Member State
          concerned between:
 ---pagebreak---                                         - 6 -
         the agricultural conversion rate
   and
         the average of the ECU rates published In the Official Journal of
         the European Communities, Series C, over a period to be determined
          in accordance with the procedure laid down in Article 12."
2. Point (2) in Article 6a is replaced by the following:
   "(2) in accordance with     the procedure    laid down   In Article   12, the
         agricultural conversion rate of a Member State shall be adjusted
         so as to avoid the application of monetary compensatory amounts.
         Such adjustment must, however:
         -   not  bring  about   a  situation  where,   for   the  Member   State
             concerned,   the  difference   between   the   real  monetary    gap
             applicable  in the pigmeat   sector, on the one hand, and that
             applicable in the cereals sector, on the other, exceeds eight
             percentage points,
         -   reduce  the risk of adjustments of the monetary        compensatory
             amounts which are both frequent and economically unjustified."
3. The last subparagraph of Article 10 (1) is replaced by the following:
   "The    monetary  compensatory   amount   shall   be   converted   using   the
   bilateral   rates resulting from the central     rates or, as appropriate,
   the average rates referred to In the second        indent of Article 5 (2)
   (b)."
 ---pagebreak---                                      - 7 -
                                  Article 3
This Regulation shall enter   into force on the third day following that of
 its publication In the Official Journal of the European Communities.
Article 1, point 2 and Article 2, point 1 shall be applicable from [Monday]
            1990.
This Regulation shall be binding In its entirety and directly applicable in
a 11 Member States.
Done at Brussels,                                      For the Council
 ---pagebreak---                                                       - 8
                                                                                         (PMDN/EN/1076)
     FINANCIAL                        STATEMENT
                                                                       DATE: 25 JANUARY 1990
1. BUDGET HEADINS: Chapter 28 and Chapter 100                        Chapter 28-ECU 136 ml 11 Ion
                      + refund posts                                 Chapter 100-ECU 1 152,8 mi 11 ion
2. TITLC; Council Regulation amending Regulations (EEC) Nos. 1676/85 and 1677/85 on the conversion rates and
            the inanetary compensatory amounts to be applied for the purposes of the cannon agricultural
            policy.
3. LEGAL BASiS: Article 43 of the Treaty
4. Ai^6 OF PROJECT:
   - On the one hand, to use the ecu as the basis of reference to determine the market rates of 'floating'
      currencies and to calculate the amounts C*ipendlng thereon;
   - O n the other hand, to limit the possibilities of determining the agricultural conversion rate for
      pigneat.
                                     Period of 12 months   Current Financial Year   Following Financial Year
5.  FINANCIAL IMPLICATIONS                                         1990                         1991
5.0 EXPENDITURE
    - CHflfiGED TO THE EC BUDGET
    - (REFUNDS/XXXXXXXXXXXX)                 p.m.                    p.m.                        p.m.
    - NATIONAL ADMINISTRATION
    -OTHER
5.1 REVERE
    - OWN RESOURCES OF THE EC                p.m.                    p.m.
       (LEVIES/XXXXXXXXXXXXXX)                                                                   p.m.
    -NATIONAL
                                           1992                 1993               1994                1995
5.0.1 ESTIMATED EXPFJOITURE
5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALOJLATION:
6.0 CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET?
6.1 CAN ThE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET?
6.2 IS A SUPPLEMENTARY BUDGET hCCESSARY?
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE htCESSARY?
CBSEEVATiONS:
Thase adjustments have no fundamental Impact as regards the calculation of the MCAs but bas lea 11 y oonstltute
an administrative slmolifIcatlon.
 ---pagebreak---                                                                      ISSN 02S44475
                                                               COM (90) 73 final
                                                     DOCUMENTS
EN                                                                             °3
                                Catalogue number : CB-CO-90-099-EN-C
                                                             ISBN 92-77-57965-X
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