CELEX: 51993PC0019
Language: en
Date: 1993-02-09
Title: Proposal for a COUNCIL REGULATION (EEC) amending regulation (EEC) No 1883/78 laying down general rules for the financing of interventions by the European Agricultural Guidance and Guarantee Fund, Guarantee Section

COMMISSION OF THE EUROPEAN COMMUNITIES
                                           COM(93) 19 final
                                           Brussels, 9 February 1993
                             Proposal for a
                        COUNCIL REGULATION (EEC)
      anending regulation (EEC) No 1883/78 laying down general rules
     for the financing of interventions by the European Agricultural
              Guidance and Guarantee Fund, Guarantee Section
 ---pagebreak---                                                                             2
                             EXPLANATORY MEMORANDUM
1. The attached draft Regulation amends Council Regulation (EEC) No. 1883/78
    on general rules for the financing of intervention by the EAGGF, on two
   points :
       it makes permanent what has hitherto been a derogation, introduced in
       1988, in regard to the uniform interest rate (point 3),
       it introduces a new derogation in favour of a Member State where the
       interest rates for financing are extremely high (point 2).
2. Council Regulation (EEC) No. 1883/78 sets rules covering inter alia the
   financing of expenditure resulting from tying up the funds needed for
   intervention purchasing.
   Article 5 of that Regulation stipulates that the interest charges incurred
   by Member states in mobilising the funds used to purchase intervention
   products are to be financed at Community level using an interest rate
   uniform throughout the Community.
   In a Member state where national interest rates are very high use of the
   uniform interest rate has led to abnormal movements of products intended
   for intervention to other Member states and so disturbed the normal
   movement patterns. It is necessary therefore to introduce a derogation
   from the uniform rate rule.
   At present the interest rate in Greece is more than double the uniform
   rate. The proposed derogation will allow Greece to be repaid part of its
   additional costs.
3. One of the measures introduced in 1988 following the decision on budgetary
   discipline was a derogation from the uniform interest rate rule, for the
   period 1989 to 1992, whereby, for Member States where the interest rate
   borne is lower than that fixed, the uniform interest rate may be set at a
   level below its representative level.
   This derogation is a practical application of the rule set in the first
   paragraph of Article 2 of the Community's Financial Regulation that budget
   appropriations must be used in line with the principles of sound financial
   management, in particular economy end cost-effectiveness. The derogation
   should therefore be converted into a permanent provision of Regulation
   (EEC) No. 1883/78.
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                                 Proposal for a
                            COUNCII REGULATION (EEC)
          amending regulation (EEC) No 1883/78 laying down general rules
         for the financing of interventions by the European Agricultural
                  Guidance and Guarantee Fund, Guarantee Section
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
Having to Council Regulation (EEC) No. 729/70 of 21 April 1970 on the financing
of the common agricultural policy^ 1 ), as last amended by Regulation (EEC)
No 2048/88(2), and in particular Article 3(2) thereof,
Having regard to the proposal from the commission,
Having regard to the opinion of the European Parliament,
(1)   OJ No. L 94, 28.04.1970, p.13
(2)   OJ No. L 185, 15.07.1988, p. 1
 ---pagebreak---                                                                       1
Whereas, for intervention operations for which a unit amount has not been set
by market organisation rules, basic Community financing rules have been set by
Regulation (EEC) No 1883/78< 3 ), as last amended by Regulation (EEC)
No 787/89( 4 ); whereas this applies in particular to the method of
establishing the amounts to be financed, the financing of expenditure
resulting from tying up the funds needed for intervention purchasing, the
valuation of stocks to be carried over from one year to another and the
financing of expenditure resulting from the physical operations of storage;
Whereas Article 5 of Regulation (EEC) No 1883/78 provides that the interest
charges incurred by Member states in mobilising the funds used to purchase
intervention products are to be financed at Community level at a uniform
interest rate; whereas experience has shown that in a Member State where
interest rates are very high this can lead to abnormal movements of products
to intervention in other Member states and so disturb normal movement
patterns; whereas it is necessary to introduce a derogation from the uniform
rate rule in order to prevent such disturbance;
Whereas the possibility afforded by the second paragraph of Article 5 of
Regulation (EEC) No 1883/78(5) of setting the uniform interest rate at a
level below its representative level amounts to a practical application of the
principles set out in the first paragraph of Article 2 of the Community's
Financial Regulation^ ); whereas this provision should be put on a permanent
basis,
 (3)   OJ No.  L 216, 05.08.1978, p.l.
 (4)   OJ No.  L 85, 30.03.1989, p.l.
 (5)   OJ No.  L 185, 15.07.1988, p.6.
 (6)   OJ No.  C 80, 24.03.1991, p.l.
 ---pagebreak--- HAS ADOPTED THIS REGULATION:
                                   Article 1
Article 5 of Regulation (EEC) No. 1883/78 is hereby amended as follows:
1. In the second paragraph the words "in respect of the financial years 1989 to
   1992" are deleted.
2. The following third paragraph is added :
   "The first paragraph notwithstanding, if the interest rate borne by a Member
   State is more than twice the uniform interest rate the Commission may, in
   financing the interest costs incurred by that Member state, apply the
   uniform rate of interest plus the difference between double that rate and
   the actual rate borne by the Member State."
                                   Article 2
This Regulation shall enter into force on the day following its publication in
the Official Journal of the European communities.
It shall apply to expenditure incurred from 1 October 1992.
This Regulation shall be binding in its entirety and directly applicable in all
Member States.
Done at Brussels,                              For the Council
                                              The President
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                                   F I N A N C I A L          S T A T E M E N T
                                                                                   DATE
1. BUDGET HEADING: Bl - ^O-fZ,  Bl - 1721                        APPROPRIATIONS :
2. TITLE:    Council Regulation amending Regulation (EEC) No 1883/78 laying down general rules
             for the financing of interventions by the EAGGF - Guarantee Section
3. LEGAL BASIS:   Regulation (EEC) No 729/70 of 21 April 1970
4. AIMS OF PROJECT:      Make a derogation from the principle of a uniform rate
                                           PERIOD OF       CURRENT FINANCIAL        FOLLOWING
5. FINANCIAL IMPLICATIONS                  12 MONTHS             YEAR           FINANCIAL YEAR
                                            Mio ECU             Mio ECU              Mio ECU
5.0. EXPENDITURE
     - CHARGED TO THE EC BUDGET               4.2                                      4.2
       (REFUNDS/INTERVENTION)
     - NATIONAL ADMINISTRATION
     - OTHER
5.1. REVENUE
     - OWN RESOURCES OF THE EC
       (LEVIES/CUSTOMS DUTIES)
     - NATIONAL
                                      1994            1995            1996              1997
5.0.1. ESTIMATED EXPENDITURE
5.1.1. ESTIMATED REVENUE
5.2. METHOD OF CALCULATION:
                                See attached table
6.0. CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE
     CURRENT BUDGET?                                                                          NO
6.1. CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET?     YES
6.2. IS A SUPPLEMENTARY BUDGET NECESSARY?                                                    NO
6.3. WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?                                     YES
OBSERVATIONS :
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   calculation of costs for public storage operations in Greece
            Financial year 1993
   (on the basis of assumptions made in letter of amendment to P D B 93).
               Average     Cost      Rate      Amount         Amount
                stock                 PDB
                t        ECU A/t                 ECU   A      ECU    B
Bl-102:         600.000                        4.218.000      4.829.610
Durum wheat     600.000      74,00      9,5%   4.218.000      4.829.610
Bl-1721:                                          972.151     1.095.614
Tobacco           22.505    449,97      9,6%      972.151     1.095.614
Total                                           5.190.151     5.925.224
                                    Uniform     Amount         Amount
                                     rate
                                                 ECU   A        ECU    B
                                                4.562.593      5.224.169
                                       10,3%    4.562.593      5.224.169
                                                1.040.618       1.172.777
                                       10,3%    1.040.618       1.172.777
                                                5.603.211       6.396.946
                                   Supplement Additional     Additional
                                    applied       cost           cost
                                   to Greece   ECU A             ECU B
                                                 2.973.813      3.405.016
                                         6,7%    2.973.813      3.405.016
                                                   678.255         764.394
                                         6,7%      678.255         764.394
                                                 3.652.069       4.169.410
                                                           I
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                               COM(93) 19 final
                                                      DOCUMENTS
EN                                                                              03
                                 Catalogue number : CB-CO-93-023-EN-C
                                                             ISBN 92-77-52275-5
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