CELEX: 51988PC0279
Language: en
Date: 1988-05-16
Title: AMENDED PROPOSAL FOR A COUNCIL REGULATION establishing a single facility providing medium-term financial support for Member States' balances of payments (Presented by the Commission pursuant to Article 149 (3) of the EEC Treaty)

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COM (88) 279
Vol. 1988/0087
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                COM(88 ) 279 final
                                                Brussels , 16 May 1988
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                                                      338   ЕЛ1
            AMENDED PROPOSAL FOR A COUNCIL REGULATION
            establishing a single facility providing
                medium-term financial support for
              Member States' balances of payments
                   ( Presented by the Commission
         pursuant to Article 149 ( 3 ) of the EEC Treaty )
 ---pagebreak---              AMENDED PROPOSAL FOR A CODNCIL REGULATION
             establishing a single facility providing
                   aediun-tera financial support for
                 Meaber States' balances of paynents
                          EXPLANATORY MEMORANDUM
Os 4 November 1987 , the Commission presented the Council
with a proposal for a Regulation establishing a single
facility providing medium-term financial support ( MTFS ) for
tie balances of payments of the Member States ( 1 ).
Tie text of the Commission 's proposal was examined in depth
within     the   Monetary     Committee .    The  Committee   expressed
itself in favour of a more complete merger of the existing
mechanisms       ( Community     loan    mechanism    and   medium-term
financial assistance ) and , in its report presented to the
EEOFIN Council of 18 April 1988 , suggested a number of
amendments to the Commission 's proposal . It also reached a
compromise solution on the question , which had remained
unsettled ,     of the size of           the unified     facility . The
Commission 's proposal was also examined by the European
Parliament 's Committee on Economic and Monetary Affairs and
Industrial Policy , which will           probably deliver its opinion
daringthemonthofjune .
In order to take account as much possible of the suggestions
pat    forward by these institutions , the Commission has
decided to propose to the Council an amended text which
nevertheless        respects     the    overall   structure    and  the
principal characteristics of its original proposal . The
Commission has also made use of the opportunity afforded by
tbe preparation of this amended proposal to make some minor
changes      to    the    original    text   so  as   to   improve   its
presentation .
Comments on the main changes            to the Commission 's original
proposal are set out below .
 (1 ) Doc . COM ( 87 ) 550 final ; OJ n°C 26 , 1.2.1988 , p.13
 ---pagebreak---                                             2
1 . Access and       conditions
a ) The amended proposal contains a general formulation
    regarding access to the renewed mechanism , which covers
    the two types of situation identified in the Commission’s
    original proposal . The text of the Regulation will not
    mention , explicitly that the mechanism could be activated
    to accompany a programme for the liberalization of
    capital movements , adopted despite a fragile balance of
    payments situation , but this possibility would be the
    subject of a declaration by the Commission and the
    Council when the Regulation is adopted . This solution
    would reflect the temporary nature of this possibility ,
    tied to the implementation by all the Member States of
    the free movement of capital ( see deletion of the third
    recital and amendments of the ninth recital , Article 1
    ( 1 ) and Article 4 ) .
    The     Regulation nevertheless makes it clear that the
    capital account , as well as the current payments balance
    is covered by the reference to a Member State in
    difficulties or seriously threatened with difficulties as
    regards its balance of payments ( see amendment of Article
    3 ).
b > As    a  reminder        that  if   a   Member   State   has   recourse   to
    Community financing it must set itself an exchange rate
    target , the recitals refer to the need for a situation
    where orderly trading conditions prevail                   ( see amendment
    of the second recital ).
cj The amended proposal clarifies the monitoring procedure :
    - the principle adopted is that the loan will be paid in
        instalments ( see amendment of Article 3 );
    - there      is    an   explicit    reference     to  the   fact   that  the
        Monetary Committee shall deliver an opinion before the
        Commission          decides      on    the    release      of    further
        instalments ( see amendment of Article 5 ).
 dj The new proposal sets no minimum or normal term for the
     loans granted . In general , the Council , acting on a
     proposal from the Commission , would lay down the detailed
     arrangements for financial support on a case - by - case
     basis , in the light of the situation in question ( see
     amendment of Article 6 ( 1 )).
     The enacting terms nevertheless state that in cases where
     restrictions on capital movements are introduced during
     the    term    of    a   loan  ( whatever    the  situation     which  gave
     rise to the granting of the loan ), its conditions would
     have to be reexamined under the procedures of Article 108
     ( see amendment of Article 4 ).
                                                                                 3
 ---pagebreak---                                        3
2 . Methods of financing , ceilings and limit on access
a ) The    amended    proposal    specifies     the   order    of  precedence
     between    the   two   methods    of    financing     the    MTFS  :   the
     normal financing method would be to approach the capital
     market ; the exceptional financing method for all types of
     loans , includin' a loan in support of a programme for the
     liberalization of capital movements , would be to call on
     the contributions of the Member States ( see amendment of
     the tenth recital and Article 1 ( 3 )).
b ) In the new proposal , the renewed mechanism contains the
     following ceilings for outstanding amounts in principal :
     - a ceiling of 16 000 million ECU on the total outstan ¬
        ding amount of loans which can be granted under the
        MTFS , financed from whatever source ( see Article 1 , new
        paragraph 3 ) ;
     - a sub-ceiling of 14 000 million ECU designed to limit
        the   outstanding      amount    of    loans    financed     by   loans
        contracted by the Community on the capital markets ( see
        amendment of Article 1 ( 1 ), subparagraph 2 );
     - a sub-ceiling       for   total direct contributions from the
        Member    States    which    may    be   needed     to    finance    the
        facility ; this amount is             the   same as the present
        ceiling for credits under             the   medium-term financial
        assistance mechanism ( 13 925 000 ECU ).
     In comparison with the amount allowed to the instruments
     in force , this modification of the ceilings of the
     unified facility represents a significant improvement in
      the Community 's effective financing capacity for the
     benefit of Member States in balance of payments diffi ¬
      culties . The outstanding amount of loans which can be
      financed by Community borrowings on the capital markets
     - the    source    of    finance    most     used    in    practice -    is
      increased by 75% whereas the direct contributions of the
      Member States may still be called upon as a last resort ,
      up to the ceilings for credits now in force .
 c ) The new text sets no individual limit on access to the
      mechanism     for   the   Member    States .     The   Council ,    on    a
      proposal from the Commission , would decide on the loan
      amount on a case - by - case basis ( see deletion of the last
      paragraph of Article 6 ).
 ---pagebreak---                                   4
3 . Financial techniques
    The   new   text   makes  it    clearer  that   operations   to
    refinance or rearrange Community borrowings must not
    involve    the    Community     in   the   transformation    of
    maturities , or in any exchange or interest-rate risk . It
    also provides that the Monetary Committee shall be
    informed of the developments in such operations ( see
    Article 7 , new paragraph 4 ).
4 . Review of  the mechanism
    The amended proposal provides that the renewed mechanism
    and its ceiling will be reexamined before the end of
    1992 . This wording seemed preferable to that used in the
    Commission 's    original    proposal    which    stated   that
    examination would take place no later than five years
    after the adoption of the Regulation .
                                                                    f
 ---pagebreak---                       AMENDED PROPOSAL FOR A COUNCIL REGULATION
                      establishing a single facility providing
                             aedlua-tera financial support for
                         Meaber States' balances of payaents
           Original proposai.                            Aaended proposai
 I.   CITATIONS                                             Unchanged
 Having regard to the Treaty esta¬
 blishing the European Economic
 Community ,      and     in     particular
 Articles 108 and 235 thereof ,
 Having regard to the proposal from
 the Commission , which consulted the
 Monetary      Committee        for     this
 purpose ,
 Having regard to the Opinion of the
 European Parliament ( 1 ),
 II . RECITALS
                1st recital                                 Unchanged
Whereas Article 108 of the Treaty
provides for the granting of mutual
 assistance ,    to be decided by the
 Council   on    a  proposal      from   the
Commission , to a Member State in
difficulties           or         seriously
threatened      with    difficulties      as
regards its balance          of   payments ;
whereas     the    Resolution       of   the
European Council of 5 December 1978
on     the    establishment        of    the
European Monetary System ( EMS ) and
related matters confirmed the need
for     a  Community       facility     for
medium-term financial assistance of
balances of payments ;
               2nd recital                             Aaended as follovs :
Whereas it should be possible for            Whereas it should be possible for the
the operation of lending to a                operation of lending to a Member
Member State to take place soon              State to take place soon enough in
enough in order to encourage that            order to encourage that Member State
Member State to adopt , in good              to adopt ,   in good   time and in a
time , measures likely to prevent            situation where orderly exchange rate
the occurence of an acute balance-           conditions prevail , economic policy
of-payments crisis ;                         measures likely to prevent the
                                             occurence   of  an  acute  balance– of -
                                             payments crisis and to support its
                                             efforts towards convergence ;
 ---pagebreak---                                                              2.
           Original proposal                Amended proposal
               3rd recital                      Deleted
Whereas a financing facility In the
form of a credit line or a loan
commitment to a Member State under¬
taking to implement a capital
liberalization programme debite a
fragile            balance- of- paymente
situation , should provide back-up
for such a programme in orderly
exchange-rate conditions ;
               4th recital                     Unchanged
Whereas each loan to a Member State
must be linked to the adoption by
that   Member     State    of     economic
policy    measures    designed     to  re¬
establish    or  to ensure    a   sustain¬
able balance- of- payraents situation
and adapted to the gravity of the
balance- of- payraente situation in
that State and to the way in which
it develops ;
               5th recital                     Unchanged
Whereas appropriate procedures and
instruments should be provided for
in advance to enable the Community
and Member States to ensure that ,
if required , medium-term financial
support      ie    provided       quickly ,
especially where circumstances call
for immediate action ;
               6th recital                     Unchanged
Whereas ,   in order to finance the
support     granted ,    the Community
needs to be able to use its credit-
worthiness to borrow resources that
will be placed at the disposal of
the Member States concerned in the
form of loans ; whereas operations
of this kind are necessary to the
achievement of the objectives of
the Community as defined in the
Treaty , especially the harmonious
development of economic activities
in   the    Community     as    a   whole ;
whereas      the    Treaty     makes    no
provision for the specific powers
of    action     required      for    this
purpose ;
                                                                b
 ---pagebreak---                                                                                        3
            Original proposai                               Aaended proposai
                 7th récital                                   Unchanged
Whereas by Decision 71 /143 /EEC ( 1 ),
as amended by Decision 85 / 656 / EEC
( 2 ), the Council set up machinery
for providing medium-term financial
assistance that was initially valid
for a period of four years from 1
January        1972 ;      whereas        this
machinery has since been renewed
and extended , on the last occasion
for two years until 31 December
1988      by      Decision      86 /656 /EEC ;
whereas this machinery provides for
the Member States to grant medium-
term loans , within certain limits ,
to    one    or     more    Member     States
experiencing          balance- of- payments
difficulties ;
                8th récital                                    Unchanged
Whereas       by      Regulation        ( EEC )
N°682 /81 ( 1 ), as amended by Regul¬
ation ( EEC ) n°1131 /85 ( 2 ), the
Council set up a Community loan
mechanism designed to support the
balances - of- payraents of the Member
States ;     whereas      this    mechanism
provides for the Community to
contract loans , according to needs
and within the limits set on out¬
standing borrowing , in order to on-
lend the proceeds to one or more
Member             States      experiencing
balance- of- payments difficulties ;
                9th recital                              Amended as follows :
Whereas        the      Community         loan  Whereas the Community loan mechanism
mechanism       has    demonstrated        its  has demonstrated    its effectiveness ;
effectiveness ; whereas its general             whereas its general design and the
design and the arrangements for                 arrangements for implementing it
implementing it still meet the                  still   meet    the    needs     of    the
needs of the Community ; whereas , in           Community ; whereas , in view of the
view of the Community 's borrowing              Community 's borrowing capacity and of
capacity and of the conditions                  the  conditions  available    to   it  for
available to it for borrowing from              borrowing from financial institutions
financial        institutions        or     on  or on capital markets , the mechanism
capital      markets ,      the   mechanism     could  constitute   the  main    form    of
could   constitute      the main     form of    mutual assistance provided for under
mutual assistance provided for                  Article 108 of the Treaty ; ( part of
under Article 108 of the Treaty ;               text deleted ); whereas the celling on
whereas it could also constitute ,              amounts     outstanding     under      the
under certain conditions and in an              mechanism     should     be      adjusted
appropriate form , an instrument to             accordingly ;
provide back-up for a programme of
capital liberalization ; whereas the
ceiling on amounts outstanding
under     the     mechanism      should     be
adjusted accordingly ;                                                                •/• ©
 ---pagebreak---                                                                                         4
           Original proposai                              Amended proposai
               10th recital                            Amended as follows :
Whereas , however , it is appropriate       Whereas , however , it is appropriate
that the financing obligations on           that the financing obligations on
Member    States    to    finance   mutual  Member States ( part of text deleted )
assistance under the machinery for          under the machinery for medium-terra
medium-term      financial     assistance   financial assistance stay in force
stay in force until the final "* tage       until the final stage of the European
of the European Monetary System so          Monetary System so as to ensure that
as to ensure that System 's cohesion        System' 8 cohesion and stability ,
and stability , irrespective of the         irrespective        of     the     conditions
conditions prevailing on inter¬             prevailing on international capital
national    capital markets ;      whereas  markets ;       whereas       the      present
the      present       procedures      for  procedures for exempting a Member
exempting a Member State from               State     from contributing or              for
contributing or          for mobilizing     mobilizing Member States'               claims
Member     States'      claims     should , should , nevertheless , be simplified ;
nevertheless , be simplified ;
               11th recital                            Amended as follows :
Whereas it is appropriate to merge          Whereas    it   is appropriate       to merge
medium-terra     financial     assistance   medium-term financial assistance and
and the Community loan mechanism            the Community loan mechanism into a
into a single facility for medium-          single      facility      for     medium-term
term     financial      support ,    while  financial      support .    ( part   of    text
retaining their specific methods of         deleted )
financing ;
III . ENACTING TERMS
                Article 1                               Amended as follows :
1 . In accordance with the decision         1 . In  accordance      with    the   decision
    adopted by the Council pursuant             adopted by the Council pursuant to
    to   Articles   3    or  4  and  after      Article 3 ( part of text deleted )
    consulting          the       Monetary      and after consulting the Monetary
    Committee , the Commission shall            Committee , the Commission shall be
    be empowered to contract loans              empowered to contract loans on the
    on the capital markets on behalf            capital markets or with financial
    of     the     European       Economic      institutions       on   behalf     of   the
    Community , with the aim of                 European Economic Community , with
    lending the proceeds to one or              the aim of lending the proceeds to
    more   Member    States    which   are      one   or  more    Member    States    which
    experiencing         or      seriously      are experiencing or          threatened
    threatened       with      balance-of       with    balance-of     payments     diffi-
    payments difficulties or which              cultles .
    have undertaken to implement a
    programme of capital liberaliz¬
    ation despite a fragile balance-
    of-payments situation .
                                                                                            3
 ---pagebreak---                                                                                          5.
            Original proposai                                Anended proposai
                                                   The outstanding amount of loans so
                                                   granted to Member States shall be
                                                   llmited to 14 000 million ECU ln
                                                   principal .
2 . The outstanding amount of loans           2 . If conditions available on capital
    to be granted to Member States                 markets       or      with       financial
    pursuant to paragraph 1 si. 'll be             institutions are unsatisfactory or
    limited     to 000    ...   million ECU        if the amount available under the
    in principal .                                 ceiling referred to in paragraph 1
                                                   is insufficient , Community loans
                                                   shall   be   financed    in    full  or   in
                                                   part by the other Member States
                                                   whose contibutions in principal
                                                   may not        exceed      the    ceilings
                                                   specified in the Annex .
                                              3 . The outstanding amount of loans to
                                                   be    granted      to    Member     States
                                                   pursuant to the present regul¬
                                                   ation ,    shall      be     limited       to
                                                   16 000 million ECU in principal .
                  Article 2                                      Unchanged
Where    a   Member     State    propose   to
call    upon sources of conditional
financing outside the Community , it
shall first consult the Conmission
and the other Member States in
order to examine , among other
things , the possibilities available
under the Community for medium-term
financial             support .          Such
consultations shall be held within
the Monetary Committee .
                  Artide 3                                 Amended as follows :
1 . On     the      initiative      of    the  1 . The medium-term financial support
    Commission       acting    pursuant    to       facility can be Implemented by the
    Article 108 of the Treaty or of                Council on the initiative :
    the Member State experiencing
    balance- of- payments difficulties             - of      the      Commission       acting
    and seeking a Community loan ,                    pursuant to Article 108 of the
     the Council , after examining the                Treaty in agreement with the
     situation     in  that Member     State          Member State seeking Community
    and     the    adjustment      programme          financing ;
     that     it    has    undertaken      to
     implement ,     shall    decide , as a        - of a Member State experiencing
    rule during the same meeting :                    or threatened with difficulties
                                                      on    its     current      or capital
                                                      account      of     the     balance-of-
                                                      payments .
                                                                                           ./
                                                                                                 ю
 ---pagebreak---                                                                                      6
            Original proposai                          Aaended proposai
    - whether to grant the loan , and     2 . The Council , after examining the
       the amount of the loan ;               situation     in    the   Member     State
    - the average duration of , and           seeking      medium-term        financial
       the techniques for disbursing          assistance and the recovery or
       the loan , which may be paid in        back-up    programme presentend          in
       one   amount     or   in   several     support of its application , shall
       instalments ;                          decide , as & rule during the sause
    - the économie policy cona . tlons        meeting :
       attaching to the loan , with a
       view to re-establishing a              - whether to grant a loan or
       sustainable           balance-of-        appropriate financing facility ,
       payments situation .                     its amount and its average
                                                duration ;
2 . If   the  amount    available   under
    the ceiling referred to in                - the   techniques      for    disbursing
    Article 1 ( 2 ) is insufficient ,           the loan or financing facility
    or   if  the  conditions    available       the release or drawings o f which
    on International capital markets            s hall as a rule be by successive
    are unsatisfactory ,        Community       Instalments ;
    loans to     Member States expe¬
    riencing        balance- of- payments     - the   economic policy conditions
    difficulties     shall  be   financed       attached      to    the    medium-term
    in full or in part by the other             financial assistance with a view
    Member States , whose contri¬               to reestablishing or ensuring a
    butions in principal may not                sustainable      balance- of- paymects
    exceed the ceilings specified in            situation .
    the Annex .
                                          3 . Where_medium-term_financial
    In such cases , the Council , in          assistance is financed in part or
    addition to taking the decisions          in full by recourse to the Member
    referred to in paragraph 1 ,              States , the Council , in addition
    shall decide on the size of the           to taking the decisions referred
    Member States'     contributions to       to in paragraph 2 , shall decide on
    the financing of the loan and on          the size of the contributions of
    the        flnanial        conditions     these States and on the financial
    attaching    to   the  credits   they     conditions       attaching       to    the
    make      available       in     that     credits    they    make   available      in
    connection .     The   Council    may     that connection . Ihe Council may
    exempt from contributing          any     exempt     from     contributing       any
    Member    State    which    maintains     Member State whi^h maintains          that
    that difficulties exist or can            difficulties      exist     or    can    be
    be foreseen as regards            its     foreseen as regards its balance of
    balance of payments .                     payments .
                                                                                          /I
 ---pagebreak---                                                                               7
            Original proposai                          Amended proposal
                 Article 4                           Amended as follows :
1 . On   the  Initiative    of  a  Member          ( part of text deleted)
    State undertaking to implement a
    capital liberalization programme
    despite    a    fragile  balance-of-
    payments situation , the Council ,
    after examining the situaci n in
    that Member State and the back¬
    up     programme      presented    in
    support of its applicatiion ,
    shall decide , as a rule during
    the same meeting :
    - whether to grant a financing
       facility , in the form of a
       credit line or an undertaking
       to grant a loan , which may be
       activated at the request of
       the benficiary Member State as
       and when     the need  arises and
       for a period that may          not
       normally exceed one year ;
    - the      overall      amount     of
       resources allocated ;
    - the back-up measures accom¬
       panying the liberalization of
       capital movements with a view
       to ensuring a         sustainable
       balance- of- payments situation .
2 . Loans drawn under the financing
    facility and granted pursuant to              ( part of text deleted)
    paragraph 1 shall , as a rule ,
    have a        terra of     one year
    renewable for a further one-year
    period .
3 . In   cases where    restrictions   on
    capital movements are introduced      In   cases     where  restrictions    on
    or re-introduced during the term      capital movements are introduced or
    of the loan , the latter may be       re-introduced during the terra of the
    consolidated only within the          medium-term financial assistance , its
    framework of a longer-term loan       conditions and arrangements shall be
    granted as mutual assistance          reexamined pursuant to Article 108 of
    pursuant to Article 108 of the        the Treaty .
    Treaty .
                                                                             ./ • •
                                                                                    12
 ---pagebreak---                                                                                            8.
             Original proposai                                Amended proposai
                   Article 5                               Amended as follovs :
The    Commission         shall    take    the The     Commission       shall      take    the
necessary      measures      to   verify    at necessary measures to verify at
regular intervals , in collaboration           regular intervals , in collaboration
with the Monetary Committee , that             with the Monetary Committee , that the
the economic policy of the Member              economic policy of the Member State
State in receipt of a Co., unity               in receipt of a Community loan
loan accords with the adjustment or            accords       with    the    adjustment      or
back-up programme and with any                 back-up programme and with any other
other conditions laid down by the              conditions laid down by the Council
Council pursuant to Articles 3 or              pursuant to Article 3 ( part of text
4 . To this end , the Member State             deleted) . To this end , the Member
shall place all the necessary                  State shall place all the necessary
information at the disposal of the             information at the disposal of the
Commission .       On   the   basis    of  the Commission .      On   the    basis     of  the
findings of such verification , the            findings of such verification , the
Commission and , where appropriate ,           Commission , after delivery of an
the Member States holding claims               opinion     by   the Monetary Committee ,
under the facility shall release               shall     decide     on    the     release   of
further      instalments .      The   Council  further       instalments .      The    Council
shall decide on any adjustment to              shall decide on any adjustment to be
be   made     to    the   initial    economic  made to the initial economic policy
policy conditions .                            conditions .
                   Article 6                                Amended as follovs :
1 . Loans granted as medium-terra              1 . Loans      granted      as     medium-term
    financial support shall have a                 financial support ( part of text
    terra of one year or more . They               deleted )      may    be      granted    as
    may be granted as consolidation                consolidation          of        short-term
    of   short-term monetary support               monetary support made available by
    made available by           the    central     the   central    banks     of   the  Member
    banks of the Member States .                   States .
2 . At       the       request      of     the 2 . At the request of the beneficiary
    beneficiary Member State , such                Member State , such loans may carry
    loans may carry the option of                  the option of early repayment .
    early repayment .
3 . Normally ,      no Member     State may               ( part of text deleted )
    draw on        this   facility     to  the
    extent of more than 50% of the
    ceiling referred to in Article
    1 ( 2 ).
                   Article 7                                Amended as follows :
1 . The       borrowing       and      lending 1 . The       borrowing        and      lending
    operations          referred      to    in     operations referred to in Article
    Article      l   shall be carried out          1 shall be carried out using the
    using the same value date and                  same     value   date    and     shall  not
    shall not involve the Community                involve      the    Community       in  the
    in       the       transformation       of     transformation of maturities or in
    maturities or in any exchange or               any     exchange      or    interest-rate
    interest-rate risk .                           risk .
 ---pagebreak---                                                                                       9
           Original proposai                               Amended proposai
    When      the     borrowings         are     When the borrowings are expressed ,
    expressed , payable or repayable             payable or repayable in the
    in the currency         of   a Member        currency of a Member State , they
    State , they may        be   concluded       may be concluded only after
    only after consultation with the             consultation with the competent
    competent     authorities      of   that     authorities of that Member State .
    Member State .
    Where a Member State receives a              Where a Member       State   receives    a
    loan carrying an early repayment             loan carrying an early repayment
    clause    and   decides     to    invoke     clause and decides to invoke this
    this option ,        the Commission          option , the Commission shall take
    shall take the necessary steps               the necessary steps , ( part of text
    after consulting the Monetary                deleted ) .
    Committee .
2 . At   the request of        the debtor    2 . At   the    request    of   the   debtor
    Member   State   and where       circum¬     Member    State   and   where    circum¬
    stances permit an improvement in             stances permit an improvement in
    the interest rate on the loans ,             the interest rate on the loans ,
    the     Commission       may ,     after     the Commission may ( part of text
    consulting          the        Monetary      deleted ) refinance all or part of
    Committee , refinance all or part            its      initial      borrowings        or
    of its initial borrowings or                 restructure       the     corresponding
    restructure the corresponding                financial conditions .
    financial conditions .
    Refinancing      or     restructuring        Refinancing        or     restructuring
    shall   not    have   the   effect    of     operations shall be carried out in
    extending the average duration               accordance with the conditions set
    of the borrowing concerned or                out in paragraph 1 and shall not
    increasing the amount , expressed            have the effect of extending the
    at the current exchange rate , of            average duration of the borrowing
    capital outstanding at the date              concerned      or     increasing      the
    of      the       refinancing         or     amount , expressed at the current
    restructuring .                              exchange       rate ,     of     capital
                                                 outstanding at the date of the
                                                 refinancing or restructuring .
3 . The    costs     incurred       by   the                   Unchanged
    Community in         concluding and
    carrying out         each operation
    shall be borne by the              bene¬
    ficiary Member State .
                                             4 . The Monetary Committee shall be
                                                 kept informed of developments in
                                                 operations referred to in the
                                                  third sub-paragraph of paragraph 1
                                                 and the second sub-paragraph of
                                                 paragraph 2 .
                                                                                      ./
                                                                                            ÎH
 ---pagebreak---                                                                               10 .
           Original proposai                            iisœsided proposai
                 Article 8
1.  If one or more Member States                            Unchanged
    that are creditors under this
    facility experience difficulties
    as regards their balance-of-
    payraents and / or a sudden decline
    In     their     foreign      cu rency
    reserves ,     they     may    request
    mobilization     of    their   claims .
    The Council , having due regard
    to the circumstances ,           shall
    decide to mobilize such claims ,
    In particular In accordance with
    one of the following procedures ,
    or a combination thereof :
    - by refinancing from Community
       borrowings      from      financial
       institutions or on capital
       markets ;
    - by a transfer of the claim to
       other creditor Member States ;
    - by early repayment in full or
       in part by the debtor Member
       State or States .
2 . Where refinancing takes place in
    accordance with paragraph 1 , the                       Unchanged
    debtor Member State shall agree
    that     its     debt ,     originally
    denominated in one currency ,
    shall be replaced by a debt
    denominated in the currency used
    for     the    refinancing .     Where
    applicable , the debtor Member
    State shall bear any additional
    cost resulting from an alte¬
    ration in the interest rate and
    the    costs     incurred by       the
    Community in concluding            and
    carrying out the operation .
3 . Any creditor Member State may           3 . Any creditor Member State may
    arrange with one or more other              arrange with one or more other
    Member States for the partial or            Member States for the partial or
    total transfer of its claims .              total transfer of its claims . The
    The    Member     States     concerned      Member    States   concerned  shall
    shall notify the Commission and             notify the Commission and        the
    the   other Member      States  of the      Monetary      Committee    of     the
    transfer .                                  transfer .
                                                                                      IÇ
 ---pagebreak---                                                                                        11
            Original proposai                               Amended proposai
4 . Any    Member     State    that    is   a 4 . Any   Member State that is a
     creditor in respect of a loan                creditor in respect of a loan
     carrying an early repayment                  carrying an early repayment clause
     clause shall take the requisite              shall take the requisite steps
     steps where the debtor Member                where    the    debtor   Member     State
     State    decides    to   invoke    this      decides to invoke this option . The
     option .     The     Member      Stares      Member     States    concerned      shall
     concerned      shall     notif ,     the     notify    the    Commission    and    the
     Commission and the other Member              Monetary       Committee      of       the
     States of the operation .                    operation .
                 Artide 9                                Amended as follows :
For the application of the ceilings           For the application of the ceilings
referred to in Articles 1 ( 2 ) and 3         referred to in Article 1 ( part of
( 2 ), the loan operations shall be           text deleted) , the loan operations
recorded at the exchange rate of              shall be recorded at the exchange
the     day     on     which     they     are rate of the day on which they are
concluded . The repayment operations          concluded . The repayment operations
shall be recorded at the exchange             shall be recorded at the exchange
rate of the day on which the                  rate of the day on which the
corresponding loan was concluded .            corresponding loan was concluded .
                 Article 10                               Amended as follows :
The      Council      shall     adopt     the The Council shall adopt the decisions
decisions      referred    to  in  Articles   referred to in Articles 3 , 5 and 8 ,
3 , 4 , 5 and 8 , acting by qualified         acting by qualified majority on a
majority on a proposal from the               proposal from the Commission , made
Commission , made after consulting            after      consulting      the     Monetary
the     Monetary     Committee      on    the Committee on the matter .
matter .
                  Article 11                                    Unchanged
The European Monetary Cooperation
Fund shall make the necessary
arrangements for the administration
of the loans .
The    funds shall be paid only to
central     banks    and    shall   be   used
 only for the purposes indicated in
Article 1 .
                  Article 12                              Amended as follows :
No later than five years after the             Before 31 December 1992 , the Council
 adoption of this Regulation , the             shall examine , on the basis of a
 Council shall examine , on the basis          report from the Commission , after
 of a report from the Commission ,             delivery of an opinion by the
 after delivery of an opinion by the          Monetary Committee and following
 Monetary Committee and following              consultation       with    the     European
 consultation       with     the    European   Parliament ,    whether     the    facility
 Parliament , whether the facility             established     still    meets ,    in    its
 established still meets , in its              principle , its arrangements and its
 principle , its arrangements and its          ceiling , the need which led to its
 ceiling , the need which led to its           creation .                                 .
 creation .
                                                                                             le
 ---pagebreak---                                                                                   12 .
          Original proposai                            Assanded proposai
               Article 13
1 . Regulation ( EEC ) N°682 /81 and                       Unchanged
    Decision 71 / 143 /EEC are hereby
    repealed .
                                                     Amended as follows :
2 . Amounts not yet repaid under           2 . Amounts not yet repaid under
    outstanding      Community        loan     outstanding       Community        loan
    operations concluded pursuant to           operations concluded pursuant to
    Regulation ( EEC ) N°682 / 81 before       Regulation ( EEC 9 N°682 /81 before
    the date of entry into force of            the date of entry into force of
    this Regulation shall           count      this   Regulation        shall    count
    against the ceiling referred to            against the ceiling referred to in
    in Article 1 ( 2 ) at their                Article 1    (1)  at their initial
    initial value in ECUs .                    value in ECUs .
3 . References    to  the    instruments                   Unchanged
    repealed by virtue of paragraph
    1   shall    be    deemed     to    be
    references to this Regulation .
                 ANNEX                               Amended as follows :
The ceilings for credits provided          The ceilings for       credits provided
for in Article 3 ( 2 ) shall be as         for in Article 1       ( 2 ) shall be as
follows :                                  follows :
Member State         Million     % total   Member State         Million      % total
                        ECU                                       ECU
Belgium                  875          6,28 Belgium                  875         6,28
Denmark                  407          2,92 Denmark                  407         2,92
Germany               2.715          19,50 Germany               2.715         19,50
Greece                   235          1,69 Greece                   235         1,69
Spain                 1.132           8,13 Espagne               1.132          8,13
France                2.715          19,50 France                2.715         19,50
Ireland                  158          1,13 Ireland                  158         1,13
Italy                 1.810          13,00 Italy                 1.810         13,00
Luxembourg                31          0,22 Luxembourg                 31        0,22
Netherlands              905          6,50 Netherlands              905         6,50
Portugal                 227          1,63 Portugal                 227         1,63
United Kingdom        2.715          19,50 United Kingdom        2.715         19,50
Total                13.925        100,00  Total                13.925        100,00
                                                                                       I?
 ---pagebreak---                       ANNEXE-CALENDRIER
10 mal     :    adoption de la proposition modifiée par la
                Commission .
13-15 mai  :    discussion   lors  de la  réunion  informelle
                 des ministres des Finances ( TravemUnde ) .
Transmission au Parlement
Un  projet   de rapport  portant  sur l' ensemble du dossier
devrait être adopté à la session plénière de juin .
ECOFIN du 6 juin
Accord de principe sur les propositions de la Commission .