CELEX: 51980PC0334
Language: en
Date: 1980-06-11
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 1172/76 of 17 May 1976 setting up a financial mechanism (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (80) 334
Vol. 1980/0120
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(80 ) 334 final
                                                Brussels , 11 June 1980
                                 Proposal for a
                      COUNCIL REGULATION ( EEC )
        amending Regulation ( EEC ) No 1172 / 76 of 17 May 1976
        setting up a financial mechanism
            ( submitted to the Council by the Commission )
                              XrV .             \
                       l<r. •
                          V ;
 COM ( 80 ) 334 final
                               I
                              /
 ---pagebreak---                           EXPLANATORY MEMORANDUM
 1.   As part of the discussion on convergence and "budgetary questions
within the Community Institutions , the Council of Ministers ( Foreign
Ministers ), meeting on 29 and 30 May 1980 » agreed that payments be made
to the United Kingdom so as to reduce its net contribution to the
Community Budget ,    One of the measures to be taken so as to achieve
this aim , while complying with the Community 's own resources arrangements ,
is the setting-up of an altered financial mechanism by amending
Regulation ( EEC ) No 1172/76 of. 17 May 1976 setting up a financial mechanism.
2.   The draft Regulation amending the Regulation referred to above confirms
the aim provided for when the financial mechanism was set up in 1976 ,
which was to prevent a situation – incompatible with the proper functioning
of the Community – from arising whereby the economy of a Member State ,
whilst in a special situation , would be obliged to bear a disproportionate
burden in the financing of the Community Budget .     However , a simplification
of the methods of calculating the payment to be made to the Member State
applying is provided for , in particular the abolition of the provisions
which had the effect of preventing the mechanism from entirely fulfilling
its intended role .
Analysis of the amendments to Regulation No 1172 /76
1.   Amendments concerning the method of determining the amount of the
     payment
A feature of the old Regulation was that Article 3 provided for the
                           4
division into tranches of the excess amount – determined in accordance with
Article 2(c ) – of the applicant Member State 's contribution to the Community
Budget . _                                                         . •  -
This division into tranches , which resulted in a considerable reduction of
the payment , has been deleted in the Commission 's proposal .
 ---pagebreak--- In "the light of "the deoisions taken by the Council on 29 and 30 May 1980,
Article 4» whioh limited payments in the event of a positive balance of
payments , will also have to "be deleted.   Similarly, it is necessary to
remove the limit to the amount of the payment , which was the higher of
the following amounts :   25O million u.a. or 33$ of the total expenditure
chargeable to the financial year to whioh the Member State 's application
refers .
2.   Technical adjustment
However, some of the amendments to Regulation No 1172/76 are designed to
solve technical or practical problems which have cropped up during the
period in which the Regulation has been in foroe .                      1
These mainly concern the consequences of using the European unit of account
in the Budget , which raises the problem of the rate to be applied for the
various calculations provided for by the Regulation ( see , in particular,
the amended version of Article 2(c )).    In addition, the term "gross domestic
product " should replace the term " gross national product ", a concept no
longer used in statistical and-economio analysis .    Otherwise , this figure
would have to be reconstituted each time the Regulation was applied.       It
was also necessary to specify that the statistics to be used are to be the
most recent ones compiled by the Statistical Offioe .    These amendments have
been incorporated in particular in Artiole 7 » which sets out the procedure
for calculating the final amount of the payment .
 ---pagebreak---   COUNCIL REGULATION (EEC ) No.,           of      19§Q amsrvding
 Regulation ( EEC ) No H72/76 of 17 May 1976 Betting up & financial
                                 mechanism
 THE COUNCIL OP THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economio
 Community , and in particular Article 235 thereof .
    /
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament^,
                                                         2
Having regard to the opinion of the Court of Auditors ,
Whereas conditions incompatible with the proper functioning of the
Community could arise if a Member State 's eoonomy , whilst in a special
 situation , is forced to "bear a disproportionate "burden in the
 financing of the Community "budget ;
 Whereas , in accordance with the guidelines laid down "by the Heads of
Government in Paris on 10 December 1974 and made more specific in
Dublin on 10 and 11 March 1975 » and in order to prevent such conditions
 from arising during the process of convergence of the economies of the
Member States , Council Regulation (EEC ) No II72/76 of 17 May 1976 setting
up a financial mechanism^ provided «for a payment to "be made from the
"budget of the Communities to the Member States in question ;
 Whereas these guidelines have sinoe been confirmed on several occasions
by the European Council , and whereas the Council agreed on 29 and
 30 May I98O that changes should be made to this financial mechanism so
 that it can entirely fulfil its intended role .
 Whereas these changes must take aocount of existing Community acts and
Community solidarity ,
                                              -  /
 HAS ADOPTED THIS REGULATION :
                             -  Article 1
 Council Regulation (EEC ) No 1172/76 of 17 May 1976 is hereby amended as
 follows :
  2
  foj
  s W
  ■*0J L 131 . 20.5.1976", p.7 .
 ---pagebreak---                                         - 2 -
1.     In Article     :
    ( i ) The terms " gross national product 'V2J7P )" and "G1TP" in ( a ), ("b )
          and ( c ) shall "be replaced "by " gr-.'ss domestic product ( GDP )" and
          " GDP" respectively.
  ( ii ) The second paragraph shall he replaced "by the following :
          " The figures referred to in ( a ) and (b ) shall he calculated , as
          moving averages , from the results .for the preceding three years
          and on the basis of the most recent statistics compiled "by the
          Statistical Office of the European. Communities ."
( iii ) The third paragraph shall "be replaced "by the following :
          " The calculations provided for in this Article in respect of
          the GBP and per capita GDP referred to in ( a ) and (b ) shall he
          made on the "basis of the average annual value of the European unit
          of account ( SUA ). The payments made "by the Member States referred
          to in ( c ) are taken to "be the EUA estimates given in the Budget
          for the current financial year.        The GDPs for the current financial
          year shall "be the most recent estimates worked out "by the
          Commission in EUA ."
2.     Article 3 shall "be replaced "by the following :
       On assessing the facts of the situation , the Commission shall , if
       necessary , enter in an appropriate subdivision of the preliminary
       draft "budget for the year following the year in which the Member State 's
       application was made an appropriation equal to the provisional amount
       of the payment .
       The amount of the payment shall be the excess amount established under
       Article 2(c ), but it may in no case exceed the smaller of the following
       amounts :
       – the net transfers from the Member State during the current financial
          year under Article 31 of the Financial Regulation of 21 December 1977 ?
          regardless of net payments made to that State under this Regulation ;
          transfers received by the Member State during the current financial
          year shall include payments made on its behalf by other Member States
          as monetary coraensatory amounts paid pursuant to Article 2a of
          Council Regulation (EEC ) 17o 974/71         12 Kay 1971    certain measures
 ---pagebreak---            of conjunctural policy to be taken in agriculture following the
          temporary widening of the margins of fluctuation for the
          currencies of certain Member States*;
        – the payments by the Member . State to the budget of the
          Communities for the current financial year after deduction of
          the customs duties and agricultural levies defined in Article 2(a )
          and (b ) of Decision 70/243/ECSC , EEC , Euratom."2
3.  Articles 4 , 5 and 6 shall be deleted.
4.  The second paragraph of Article 7 shall be replaced by the following:
"After the revenue and expenditure account has been drawn up , and as soon as
it has the final data referred to in this Regulation , the Commission shall ,-
on the basis of this data , calculate the final amount of the payment and
settle the balance .     The above-mentioned GDP data shall be the first figure
published by the Statistical Office of the European Communities after the
revenue and expenditure account has been drawn up .
The payments made under this Regulation shall be expressed in EUA and paid
in the currency of the Member State .       The exchange rate used shall be that
of the day the Commission received the application referred to in Artiole 2 .
5.   Articles 8 and 9 shall be deleted .
                                     Article 2
This Regulation shall enter into force on the day of its publication in the
Official Journal of the European Communities .       It shail apply from the
Financial year 1980 .                     N
This Regulation shall be binding in its entirety and cTii-ic^ly applicable in
all Member States .
                              /
 20J ïïo L 94 , 28.4.1970 , p. 19 .
 ---pagebreak---                    FINANCIAL , RECORD
                                                                     DATE :
                                                                              6 June 1980
1 . " Budget heading :   Chapter 41 : Application of the " financial mechanism " pursuant
      to the Council Decision- of ^7 May 1976                          "
2 . Title of measure : Proposal for a Regulation amending Regulation. ( EEC )
      No H72/76 of 17 May 1976 setting up a financial mechanism
3 . Legal "basis :     Article 235 of the EEC Treaty
4. Aims of measure : Alteration of the financial mechanism set up in 1976 in the
      light of the Council meeting of 29 and 30 May.
                                     j     Period of          Current financial   Following financial
5 . Financial implications                 1 2 months              year ( 80 )             year ( 81 )
5.0     Expenditure
        - Charged to the EEC                                                              280 m EUA
          Budget
          ( Refunds/ Intervention )
5.1     Revenue
                                                                                                        *
                                             1982 and subsequent years
 5.0.1      Estimated expenditure - It is impossible to estimate what appropriations will
                                       "be required in future budgets until it is known how
                                       much each Member State will contribute towards the
 5.1.1                                  financing of the budgets and each Member State 's share
                                       of the Community GDP for the financial years in
                                        question.
 5.2     Method of calculation :                           . .
 Payment to the United Kingdom under the present Regulation                           187 m EUA
 Payment to the United Kingdom under the proposed amendment                           467 m EUA
                                                                                      280
 The estimated payment is based on the New Budget Proposal for 1980, taking into
  account the Letter of Amendment and the Commission 's latest national GDP estimates .
  6.0 Can the measure be financed from appropriations in the relevant                          YES/NO
         chapter of the current Budget?               ( No appropriation required in
                                                         1980 )          ,          '   .
  6.1    Can the measure be financed by transfer between cha.pters of                          lES/NO
         the current .Budget? ,
  6.2    Will a supplementary budget be necessary?                                             Xi£5/ N0
  b.3 > Will future "budget appropriations be necessary'