CELEX: 51977PC0538
Language: en
Date: 1977-10-31
Title: Proposal for a COUNCIL REGULATION on the exchange rates to be applied for the purposes of the agricultural structures policy (submitted to the Council by the Commission)

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COM (77) 538
Vol. 1977/0172
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 ---pagebreak---  COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(77)538 final
                                                Brussels . 31 October 1977
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                               Proposal for a
                             COUNCIL REGULATION
               on the exchange rates to be applied for the
               purposes of the agricultural structures policy
               ( submitted to the Council "by the Commission)
CQM(77 ) 538 final
 ---pagebreak---                                     EXPLANATORY MEMORANDUM
1 . In connection with the implementation of common measures financed by the
     EAGGF Guidance Section, the amounts specified in units of account in the
     agricultural instruments have to "be converted at the representative rates
     fixed by the Council pursuant to Article 2 ( 2 ) of Regulation No 129 * As the
     annexed table shows , these rates for converting agricultural units of
     account into national currencies have been altered on several occasions
     in recent years , often concurrently with the decisions on agricultural
     prices for the purpose of preserving the unity of markets and reducing                                  *
     the compensatory amounts .
2 . Although motivated by the requirements of the prices policy, the changes
     in the conversion rates also apply to the structures policy and pursuant
     to the rules in force (articles 4 and 6 of Regulation (EEC) No 1134/68)
     Community aid must be converted into national currencies at the represen­
     tative rates which obtained on the date when the conditions for granting
     the - aid are fulfilled .
     This means that the conversion rate to be used to calculate the amount
      of aid in national currency is determined by the representative rate
      operative at the time aid is granted. It is the time when the beneficiary
      acquires an "enforceable right", the granting of which he can request once
      all the conditions for payment are fulfilled.
      When payment of aid by the Member State is spread out over several years
      and when particular conditions are not laid down for the payment of the
      different instalments , these instalments are determined on the basis of
      the representative rate operative at the time aid is granted.                                      ^
  Pfovltion.l »ddr.«: «„• de «« LOI 200, B-1049 Bru...» - T,l90hon. 735 00 40/ 73530 40 - T.^r.ph^ "COMEOR Bru..*.
                                           Telex : " 21 877 COMEU fi " - AGRÊC 25670/ 22 037
 ---pagebreak---                                    2
3# Although it is recognized that the representative rates also need to "be
     "brought into line with economic reality for the purposes of the structures
      policy, the fact remains that the dates on which adjustments to these rates
      are made and their frequency are determined on the "basis of the require­
     ments of the prices policy and are not particularly well suited to the
      requirements of the structures policy. The consequences of repeated
     adjustments to the rates within one calendar year and on arbitrary dates
     are as follows :
     - during one calendar year different amounts of aid are granted for the
        same measure , which constitutes unjustified discrimination between
        recipients ;
     - the task of the national authorities responsible for the administration
        of aid and the determination of eligible expenditure is made more
        difficult ; this goes against the wishes expressed on many occasions
        for a simplification of the procedures currently in force ;
      - and, consequently, the task of supervision by the Commission becomes
        more difficult .
      On the other hand recipients of aid, the payment of which is spread out
      over several years , must be protected against a reduction in the real
      value of the aid due to a devaluation of the representative rate for a
      national currency occurring between the time when aid is granted and the
      time when the instalments are payable .
4 * To avoid the drawbacks resulting from frequent changes in the conversion
      rates , while bearing in mind that the success of the measures introduced with a
      view to improving agricultural structures depends on the level of the aid
      provided for in the agricultural instruments being maintained at its real
   - value in the event of payment being spread out over several years , it is
      proposed that :
      (l) for the purposes of the structures policy the representative rates should
          be brought into line with economic reality once a year . Since the
          accounting year for eligible expenditure under the EAGGP Guidance Section
          coincides with the calendar year , the date of entry into force of the
          new representative rates should be 1 January of the following year ;
 ---pagebreak--- (2) where payment of the aid is spread over a number of years - either
    "because it is payable in several instalments , or because it is payable
     for a number of years - the equivalent in national currency of the
    amount due and the amount of expenditure eligible for assistance from
    the Fund should be determined, in the event of devaluation of the
    representative rate for a national currency on the basis of the •
  • representative rate in force on 1 January of the year during which
    the instalment in question is payable *
 ---pagebreak---                              COUNCIL REGULATION ON THE EXCHANGE RATES
     TO BE APPLIED FOR THE PURPOSES OP THE AGRICULTURAL STRUCTURES POLICY
THE COUNCIL OP 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 Parliament ,
Whereas ,               Articles 4 and 6 of Council Regulation (EEC) No 1134/68
of 30 July 1968 laying down rules for the implementation of Regulation (EEC)
No 653/68 on conditions for alterations to the value of the unit of account
used for the common agricultural policy ( l ), 'provide that the amounts fixed in units
  of account in the agricultural instruments are to be converted at the representative
 rate obtaining on the date when the conditions for granting the aid are fulfilled ;
 whereas this provision consequently applies to aids fixed in units of account      ~
in the instruments concerning the improvement of agricultural structures ;
Whereas the main purpose of the adjustments to the representative rates is to
preserve the unity of the markets and to reduce the compensatory amounts ;
whereas the dates of entry into force of the new rates are not well stated to
the requirements of the structures policy, particularly where repeated adjustments
are made during a single calendar year ;
Whereas the success of measures to improve agricultural structures is threatened
by ~        . short-term adjustments to conversion rates which take effect orTdates
which are unrelated to these measures ; whereas their success depends on
           - the level of aid as provided for in the Community rules ; and
           - the maintenance of the aid at its real exchange value when under
              Community legislation payment of the aid is spread over several years ;
 (1 ) 0J No L 188 , 1.8.1968, p.l .
                                                                            «
 ---pagebreak--- Whereas , in order to have the same basis of calculation for all aid granted during
a calendar year , it is necessary to provide for a single change once a year in the
representative rates to "be applied under the agricultural structures policy ; whereas for
accounting and administrative reasons the representative
rate valid on 1 January of the year in question should be applied ;
Whereas where payment of aid is spread over several years , provision should "be
made for      the annual instalments , in the event of devaluation of the
representative rate for a national currency, to he" determined on the "basis of the
representative rate obtaining on 1 January of the year during which the
instalment becomes payable ;
Whereas the measures provided for in this Regulation may need to be amended when
 the European Unit of Account is introduced into the Common Agricultural ;
Policy,
HAS ADOPTED THIS REGULATION:
                              Article 1
The amounts of aid expressed in units of account in the agricultural instru­
ments relating to the common agricultural structures policy, the Community
financing of which is undertaken exclusively by the EAGGF Guidance Section ,
shall be converted into national currencies at the representative rates obtaining
on 1 January of the year during which the decision to grant aid is taken .
Where under Community legislation payment of aid is spread over several years , the
annual instalments shall , in the event of devaluation of the representative rate for
a national currency, be established on the basis of the representative rate
obtaining on 1 January of the year during which the instalment of the aid becomes
payable .
                              Article 2
This Regulation shall enter into force on the third day following its publica­
tion in the Official Journal of the European Communities . It shall apply to
decisions to grant aid taken on and after 1 January 1978 hy Member States .
This Regulation", shall be binding in its entirety and directly applicable in
all Member States .
                                                    For the Council
Done at Brussels .
                                                                        »
                                                    The President .
 ---pagebreak---                                                                                  AfJTTEX
Rates to be used for -the conversion of standard rate aid financed ty the EACGF-
Guidance Section ( equivalent of 1 u.a.)
 ---pagebreak---                                                 \
Rates to be used for the conversion of standard rate aid financed by the SAGGF -» ANNEX I
Guidance Section ( equivalent 'of l c u.a. )
 ---pagebreak---                     FINANC8AL                   STATEMENT
                                                                                             date «   6 . 1 0 „ 1977
   1 . BUDGET LINS COÎICLTCFIÏD »      Tltle 8
   2. ACTION , To establish the exchange rate to be applied for converting into national
   currencies the amounts of aid expressed in units of account in the aoricultural
   instruments
    - ,       ,        concerning
                           ,T       ; ' the common
                                                 "          policy on V/.. agricultural
                                                                           AY . IVUHUI A I. structures
                                                                                                 su u^tureb ,; " the xne Community
                                                                                                                            torn
   financing of which is undertaken exclusively by the EAGGF . Guidance Section
   T *1  ^ ^ "V /"I  ♦  t In ^ ^ n  ^  1    y* M 4* nL A –               I  I     ■ I   IM A A A    ^   k  .                     /
   3 . LEGAL BASIS J
                     Article 43 of the Treaty establishing the European Economic Community
  4. OBJECTIVES 8 To ensure that recipients of aid are treated on an equal basis ; to
  protect recipients against, .a reduction in the real value of the aid when payment
   is spread out over several years; to simplify the admini strat'ion of expenditure
   in order to be able to manage and check it better .
                                                    YEAH   J.?7.8             YEAR .. 1979                   YEAR . .1 ?8Q
 5.0.1 PLURI ANNUAL PATTERN OF EXPENDITURE                  NIL                See under 5.2                   See under 5.2
 5.1.1 PLURI ANNUAL PATTERN OP RECEIPTS                           NOT APPLICABLE
 5.2 hiETnOD OF CALCULATION As the entry into force of the proposed Regulation is envisaaed
  with effect from 1978 expenditure under Title 8 of the Community Budget cannot §e
  affected before 1979 . The financial consequences of the proposal which will occur
  from 1979 are dependent on
        lu6                    t 'ie lmP'- e,nentation of the measures concerned on the one hand in*
        the Member States in which the representative rate of its currency devalues
        and on the other in those in which this rate revalues , and
 2 . the amount of the rate of devaluation or revaluation
 As     these factors are unknown at the present time the financial consequences
  cannot be d etermined .
6.0 FINANCING POSSIBLE WITH CREDITS INSCRIBED IN RELEVANT CHAPTER OF CURiiENT BUDCET ?                                   YFS/l&X
                                                                                                                         YES/WCK
6«1 FINANCING POSSIBLE BY TRANSFER BST/'iiEW CHAPTERS OF CUH^IiVT BUDGET ?                                              YS5/5CK
6.2 NECfUSITY FOR A SUPPLEMENTARY BUDGET ?                                                                              KBSXN0
6.3 CREDITS TO BE WRITTEN INTO FUTURE BUjDGETS ?                                                                        TES/N0
COMŒWiS 1