title: Draft COUNCIL RECOMMENDATION to the Member States regarding methods of evaluating the cost of pollution control to industry (submitted to the Council by the Commission)

text:
ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (77) 630
Vol. 1977/0202
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak---              COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                 COM(77)630 final.
                                                                 Brussels . 8 Decem'be'r 1977
                                            Draft
                                      COUNCIL RECOMMENDATION
                      to the Member States regarding methods of eva
                      luating the cost of pollution control to industry
                         ( submitted to the Council "by the Commission )
ce;.: ( 77 ) 630 final .
 ---pagebreak--- In the Programme of Action of the European Communities on the
Environment , which was approved in the declaration of the
Council of the European Communities and of the representatives
of the Governments of the Member States meeting in the Council
of 22 November 1975 j the following action is called for (l ):
"The study of methods for evaluating the cost3 of anti-pollution
measures with a view to harmonizing them - The first stage will
be an attempt to define methods for evaluating the costs of
combating water , air and industrial pollution . The work will be
carried out in collaboration with the OECD ".
It should be emphasized that the evaluation of the costs of
existing pollution control plants not only provides information
on the costs of policy measures already taken but can also be
used to facilitate the forecasting of the costs of future
policy measures . Because a very wide range of pollution control
plant n exists , embracing wide variations in the level of control
achieved , the technical process used , and the data at xvhich the
plants were bui.lt , it is possible to construct cost curves from
such data , showing the range of costs associated with different
levels of pollution control . From these cost curves a forecast
can be made , for example ., of the costs associated with the
general introduction of the most technically advanced pollution
control plants currently in existence . Olher - information will
usually also be required in order to take new policy decisions
(e.g. information on pollution control techniques with which
there is as yet no practical experience ) but knowledge cf costs
actually incurred 5aay thus be of considerable importance .
In practice , different methods are still used in different
Member States and even within a single Member State to evaluate
the actual or probable costs incurred by industry , so the data
obtained are seldom directly comparable at Community level .
It is therefore necessary to adopt a common set of rules to
which all future studies of pollution control costs in industry
conducted in the Member States should conform .
Possible methods have beentt-ried in practical sectoral studies
within the Commission , by Member States themselves , and on
behalf of the OECp Environment Committee . In the light of
these studies and of extensive discussion in the Group of
(l )  O.J. No . C112 of 20 December 1973
 ---pagebreak--- Environment sil Economic Experts* of the problems they have raised ,
it now seems opportune to propose a single methodology for
future pollution control cost studies of particular sectors •
of industry within the Community which will ensure & min5.mum '
of comparability of the resists they produce .
As regards the sampling methodology used in actually collecting
cost data , this may consist in taking a sample of the industi*y
concerned by means of a questionnaire , in collecting information
from the producers of pollution control equipment , in studying
"representative " plants within the industry , or in a combination
of these . It is doubtful whether any one of these alternatives
is always to be preferred in all branches of industry , so that
it vould not be appropriate at this stage to decide in favour
of one of them . In this case , the maintenance of flexibility
in the methodology of evaluation is more important than the
relatively small improvement in comparability which would
result from the adoption of a single sampling methodology .
Finally , in order to ensure that as much comparable data as
possible on pollution control costs in industry is available '
at u Community level , it is appropriate that the results of
all such cost eval'iD(iticn studies available to Member States'
be communicated to the Commission .
* The Commission convened this group for the first time on
  £5 January 1972 . The group discussed problems of cost
  evaluation methodology at its meetings©? 25*1.72 , 25 - 5 - 72,
  8,9.1-73 , 10,11 - 5 - 73 and 29-1.7^- Working documents of the
  Commission on the subject were discussed by it on 11.7-7^
  and 16,17.6.75 and earlier drafts of this recommendation
  on 12.2.76 and 15 , 16.7.76 .
 ---pagebreak---        Draft Council Recommendation   to the Member States
                   Regarding Methods of Evaluating               ' .
             the Cost of Pollution €ontrol to Industry         •
TEE COUNCIL OF THE EUROPEAN COMMUNITIES     V
Having regard to the Treaty establishing the European Coal and
Steel Community ;
Having regard to the Treaty establishing the European Economic .
Community ;
Having regard to the Treaty establishing the European Atomic
Energy Community ; .
Having regard to the draft recommendation submitted by the           ■
Commission ;                       -                   '
Having regard to the Opinion of the European Parliament ;
                             ?■
Having regard to the Opinion of the Economic and Social Committee ;
Whereas if the Member States were to differ in their ecti.mates
as to the cost of anti pollution measures , particularly if these
estimates were not based on comparable legislative measures and
a uniform definition of couts , the possible repercussions of thin
on policies at the national level would sever e.lyhhamper the
implementation of a common policy : 5
Whereas this statement of principle was adopted in the Programme
of the European Communities on the Environment , which was
approved in a declaration of the Council of the European Communities
and of the representative3 of the Governments of the Member
States meeting in the Council of 22 November 1973. ( l ), y'~- '
Whereas these cost evaluations are intended to determine the size
of the burden to be borne by the economy as a v/hole or by
individual branches of industry if specific measures are taken
by the authorities to protect the environment , to provide data
on the most co^t-eff ective ways of rouc^ing pollution and , under
certain conditions , to help to determine quality objectives
and/or emission standards ;
WhereB3 the evaluation of the costs of existing pollution control
plants not only provides information on the costs of policy
measures already taken but can also be ucsed to facilitate the
forecasting of the costs of future policy measures ;
(l ) O.J. No . C112 of 20 December 1973
 ---pagebreak---                       - 2 -
                                    »»
Whereas it is of great advantage to both local and national
authorities and indispensable for decision-making at Community
level , to have access to comparative data on the costs of
existing pollution control plants in industry from various
Member States of the Community ;
Whereas for this purpose it would be beneficial that the Member
States introduce as similar methods of evaluation as possible
by adopting a common set of principles to whichjfuture . studies of
pollution control costs in industry should conform ;         . .
RECOMMENDS , within the meaning of the EEC Treaty , that in respect
of the evaluation of the cost of pollution control in particular
branches of industry , the Member States secure the use of the
principles , definitions and methods contained in the annex
to this recommendation and that whenever possible they communicate
to the Commission the results of all such studies .
Done at
                        *
                                       For the Council
                                       The Président
 ---pagebreak---                             A N N E X
                               Part I
              Principles , Dofinxtlons and Methods
1 . The pollution control costs to be evaluated in the industries
     concerned should relate to their plants contributing to the
     prevention , elimination or reduction of                 ■      '
     (a )     water pollution
     (b )     air pollution
     (c)      noise or vibrations or their effects                     .
     (d )     solid or liquid waste
     (e)      damage due to the above factors
2 . The actual collection of cost data should be preceded by a
     technical survey of the industry concerned . This descriptive
     phase should identify the different production technologies
     used in the industry , their environmentally harmful by-products ,
     and the primary and secondary pollution control processes
     ( including changes in the production process ) used to reduce
     these . Other factors or characteristics of the processes which
     are likely to give rise in practice to considerable differences
     in cost for otherwise similar pollution control processes should
     also be identified . Such factors may include , for example , the
     age of the plant or the characteristics of the ret« materials
     it uses . In such a case the since process operated by equipment
     of different age3 or using different raw materials should be
     treated as several separate processes for the collection of cost
     da-ua .                        .                             ^
     The survey will thus result in a catalogue of pollution control
     processes, with different technical characteristics and/or
     different average costs . It is for each of those processes that
     cost data should then be collected .
     For each iirccess in the final catalogue the survey should deter
     mine the probable lifetime of the plant and equipment concerned .
     It should also determine the frequency of u^e and relative
     importance of each process within r.he industry . .
3 . 'This descriptive phase should be followed by an assessment phase ,
     in which a "pollution control relevancy factor 1 ' , i.e. that
     proportion of the overall costs of a particular pollution control
     technique which can be imputed fco the requirements of pollution
     control , is explicitly laid down for each pollution control
     technique identified in the initial phase .
 ---pagebreak---     Thin faotor will in teaat U© 2.00% In oaene when?® the costs
    relate to plf-rc/ss serving exclusively f. or pollution control .
    In other cases , where a reduction of pol3.ut-.ion is achieved
    by a change in the manufacturing process itself , the factor
    should wherever possible be determined after consultation
    with the Commission .
k . The cost data for pollution control plants should be collected
    in such, a way that an evaluation of each of the following cost
    categories is available separately for each pollution control
    technique identified in the technical survey :
    Inventaient Conta
    (i ) Expenditure on the construction or acquisition of plant
           and equipment (in accordance with the definitions in the
           European System of National Acccmts (ESA )* item P ^l ),
                                 I
    (ii ) Expenditure on the construction or acquisition of
           buildings (in accordance with the definitions of ESA "
           P. kl ),
   (iii ) Expenditure on "the acquisition of land and/or the market
           value of land already Owned ,
    (iv ) Expenditure on maintenance (in accordance with the
           definition of ESA , P 4-1 ).           '
    Running Costs
      (v)   Exnenditure on labour ( in accordance with the definitions
            of' ESA, B 10 ),
    (vi ) Expenditure on energy (in accordance with the definitions
           of ELA , P 20 ),
   (vii ) Expenditure on materials other than energy (in accordance
           with the definitions of ESA , P 20 ),
  (viii ) Expenditure on services (in accordance with the
           definitions of ESA , P 20 ),
    ( ix ) Expenditure on rents (in accordance with the
           definitions of ESA , P 20 ).
    * Published by the Offici\l for Official Publications of the
       European Communities in IS70
 ---pagebreak---                ;
                                  - 3 -
    Even where deteiled figures are not available In industry for
    each of these cost categories , they should nevertheless always
    be estimated .
    The above mentioned data should be exclusive of value~added tax
    for those categories on which it is payable and should be
    calculated as gross costs before subsidies of any kind . The years
    to which categories (i ) - (iii ) refer should be identified ,
    whereas categories ( iv ) - ( ix ) should refer to costs incurred
    in the preceding financial year .                                 ,
5 . The above cost data should be accompanied by the following
    information :
    (i )   the market value of any materials recovered as a result '
           of the operation of the pollution control plant in
           question , irrespective of whether such materials are
           sold or used internally ,
    (ii )  the exact absolute levels of each pollutant- emitted by
           the relevant production plant in a specified time period
           both before and after the installation of the pollution
           control plant to which the costs refer ,
    (iii ) the ar^ual production volume of the production process
           to wh5.oh the pollution control costs refer .
6 . If the data are collected by means of a questionnaire addressed
    to a representative sample of the industrial sector , the
    following information should also be obtained :
    - the amount of any pollution charges paid by a firm in
      addition to , or instead of , pollution control measures ,
      both before and after installation of the pollution control
      plant in question ( in accordance with the definitions of
      ESA , E72 , R66 );
    - the nature and amount of any financial aid , whether in the
       form of subsidies , tax concessions or preferential loans
      received by industry in respect of the pollution control
       installations concerned .
7 . Any data other than the above which it is deemed dec-arable to
    collect should be expressed as separate figures , without being
    incorporated into any of the categories defined above .
8 . The principles , definitions and methods concerned in this
    Part of the Annexe should be used in the light of the
    comments contained in Part II .
 ---pagebreak---                                   Part IX
      Comments on' the" irinciples * Def i nitior.c and Methods contain cd
                     _           in. Part I                      ■
Généra t.
Lack of comparability can. arise f.rr numerous reasor.c , of v?hxcu
the following are the most important : different types of
installation may be included under th.3 heading of pollution
control s different; categories of costs cay be included in the
cval\taiio:i aud tlieo© nay be defined h\ dit'f erei>.-.- ways , the txae
period to which the data refer may differ from one study to another ,
and different sampling methodologies may be employed . In addition ,
ouch! cost data remain of li taited value unless it is clear to what
extort tho pollution' control to whi'.ch they refer has in fact reduced
pollution levels .
However , pollution control cci.t studies czn be carried rut vi th
differing aims in view , requiring the collection of mere or lees
detailed figures . Thus it is possible *co obtain va^.id xn:t:or;v,ation
on the raaoroeconoaic coots to industry of existing nollucion
control legislation without eit.her carrying otn: a survey of the
pollution co.r.trol processes used or using a detailed breakdown of » -
cost categories . It would therefore rot necessarily be appropriate
for such a study to une the same methodology as one which is
cor.'iirned. with the costs of individual processes in a particrlar
branch of industry . Furthermore , since ctadier airrirg at r.^araring
the overall juacroeconcnic effects ox environments.!. policy tsy
evaluating pollution control costc, in general provide cata vhxcxi are
of limited Vcluo in the context of a dxf fez* en*. iiati .'.>.^,l economy ,
it therefore does not seem essential at present to devellop^a common
methodology for them . A common methodology is therefore pr.-.marxly
retired for tho^e cost studies .vhion pexer to partxeuj-ar ^-ranci^es
of irduatry . However , the results . cf such sectoral atuaies can also
 serve as part ox* the basis for caicTlatins the macToecoxioxnic
 effects of - pollution control nseeaurss in the sectors concerned .
 re po\nt 1
 This article defines those measures which are to be ccnx-idered as
 pollutioxi control foi* the purposes of tbi3 recouimexidation . However ,
 it is for the technical auxvey to determine 'uhoae cypos? of
 pollution which arc- relevant for the branch of industry concerned
 by o. particular st'^dj »
 ---pagebreak---      costs incurred "by a "branch of industry may depend ^viUfially
en the particular .technical processes used In it , which may
vary widely froia oue country to another . If the cost drta obtained
ar9 to be comparable , they siust therefore be broken do;;n according
to the process concerned , the number of processes involved being
determined by a technical survey of the branch of industry before
the cost evaluation itself is carried out . The presentation of
separate cost data for each technical process allows them to be
u^ed in conjunction with- knowledge of the frequency of occurrence
of these processes in the Member States in ana7-.ysJ.ng the reasons ' .
underlying the total costs incurred in a particular branch of
industry .
re Tioint 3
Where process changes are concerned , it will seldom be easy to
agree on the magnitude of the ^'pollution ccvi!:rol relevancy factor".
However , as long as the factor chosen is explicit in the cor-t
study it will always be possible , by means of a simple conversion ,
to wake the results comparable with those of another study in which
the factor has been given a different value .
re point k
It is not to be expected that cost studies on particular branches •
of industry will always be conducted in different Member States
at the csame time . The comparability o.f their results will depend
on the ability to adjust them for changes in prices ., The       _
presentation of separate data for each cost category allows the .
uae of relevsL.it price indices to adjust data from different years
to a common base year .
re point 5 (i )
Since the cost data' collected tire intended to represent the burden
carried by industry, it is necessary that any revenue accruing
as a result of pollution control should also be assessed, so that
net costs are not overeat isiatod .
re point 5 i.ii ) - ■
V/ithout the careful, assessment of the performance of bne pollution
 control process concerned , it would not be possible to construct
a curve linking the average cost of different processes to tne
amount of pollution control they accomplish .
 ---pagebreak---                                      3
re peint 5 (iii )                           1
The absolute size of an industrial installation is one of the most
important det enn3.na.it s of the average cost of its pollution control .
Knowledge of it. is therefore of great importance in the analysis
of the cost fignrea obtained .
re -point 6
When cbvba is collected by way of a questionnaire from a
representative sample of industry , extra information should be
obtained on transfer payments between industry and the public
sector which are specifically rel&ted to pollution control .
In this way , the act^io.1 net financial burden carried by the
industry can be distinguished from the gross macroeconomic
'burden carried by the economy , the two differing by the amount
of any net financial transfer .
re point 7
Irs many cases those tonductinG; pollution control cost studies
may wish to collect supplementary data , e.g. concerning the
relative importas c a of pollution control costs compared to other
variables ouch as total investments or turnover , or on the invest
ment plans of industry . While such information may often ba
useful for certain purposes* it is not essential for the proposes
of this recojmicndation , so its collection should remain optional .


title: Recommendation for a Council Decision abrogating Decision 2005/694/EC on the existence of an excessive deficit in Italy

text:
   EN
EN    EN
 ---pagebreak---                COMMISSION OF THE EUROPEAN COMMUNITIES
                                               Brussels, 7.5.2008
                                               SEC(2008) 574 final
                               Recommendation for a
                              COUNCIL DECISION
   abrogating Decision 2005/694/EC on the existence of an excessive deficit in Italy
                           (presented by the Commission)
EN                                                                                EN
 ---pagebreak---                                      EXPLANATORY MEMORANDUM
   1.         BACKGROUND
   Article 104 of the Treaty establishes that Member States should avoid excessive deficits and
   lays down a procedure for their identification and correction. The excessive deficit procedure
   (EDP) is further specified in Council Regulation (EC) No 1467/97 on “speeding up and
   clarifying the implementation of the excessive deficit procedure”1, which is part of the
   Stability and Growth Pact. According to Article 104(2) of the Treaty, the Commission must
   monitor compliance with budgetary discipline on the basis of two criteria, namely: (a)
   whether the planned or actual government deficit exceeds the reference value of 3% of GDP
   (unless either the deficit ratio has declined substantially and continuously and reached a level
   that comes close to the reference value; or, alternatively, the excess over the reference value is
   only exceptional and temporary and the ratio remains close to the reference value); and (b)
   whether government debt exceeds the reference value of 60% of GDP (unless the debt ratio is
   sufficiently diminishing and approaching the reference value at a satisfactory pace).
   In accordance with the Protocol on the excessive deficit procedure annexed to the Treaty, the
   Commission provides the data for the implementation of the EDP. As part of the application
   of this Protocol, Member States must notify data on government deficits and debt and other
   associated variables twice a year, namely before 1 April and before 1 October, in accordance
   with Article 4 of Council Regulation (EC) No 3605/932,3.
   On 7 June 2005, the Commission initiated the EDP for Italy with the adoption of a report
   under Article 104(3), based on a general government deficit of 3.1% of GDP and government
   debt at around 106-107% of GDP in both 2003 and 20044. On 28 July 2005, the Council
   decided, on a recommendation from the Commission, that Italy was in excessive deficit
   according to Article 104(6)5. At the same time, and also based on a Commission
   recommendation, the Council addressed recommendations under Article 104(7) to Italy with a
   view to bringing the situation of an excessive government deficit to an end, by 2007 at the
   latest6. Specifically, to that end, the Italian authorities were recommended to: implement with
   rigour the 2005 budget; take the necessary measures to ensure a cumulative reduction in the
   cyclically-adjusted deficit, net of one-off and other temporary measures, of at least 1.6% of
   GDP over 2006-2007 relative to its level in 2005, with at least half of this correction taking
   place in 2006. In addition, the Italian authorities were recommended to ensure that the
   government gross debt ratio diminishes sufficiently and approaches the reference value at a
   satisfactory pace, in line with the correction of the excessive deficit, by restoring in the
   medium term an adequate level of the primary surplus. Furthermore, the Italian authorities
   1
            OJ L 209, 2.8.1997, p. 6. Regulation as amended by Regulation (EC) No 1056/2005 (OJ L 174,
            7.7.2005, p. 5).
   2
            OJ L 332, 31.12.1993, p. 7. Regulation as last amended by Regulation (EC) No 2103/2005 (OJ L 337,
            22.12.2005, p. 1).
   3
            The most recent notification of Italy can be found at:
            http://epp.eurostat.ec.europa.eu/portal/page?_pageid=2373,58110711&_dad=portal&_schema=portal.
   4
            SEC(2005) 750. After successive revisions, the general government deficit is currently reported at 3.5%
            of GDP in both 2003 and 2004. For the same years, the debt ratio has been revised downwards to
            around 104% of GDP, essentially due to the present higher estimate of nominal GDP.
   5
            OJ L 266, 11.10.2005, p. 57
   6
            All EDP-related documents for Italy can be found at the following website:
            http://ec.europa.eu/economy_finance/sg_pact_fiscal_policy/excessive_deficit9109_en.htm.
EN                                                          2                                                       EN
 ---pagebreak---    were recommended to pay particular attention to factors other than net borrowing, such as
   below-the-line operations, which contribute to the change in debt levels. In addition, the
   Council invited the Italian authorities to ensure that budgetary consolidation towards the
   medium term position of government finances close to balance or in surplus is sustained
   through a reduction in the cyclically-adjusted deficit, net of one-off and other temporary
   measures, by at least 0.5% of GDP per year after the excessive deficit has been corrected.
   Finally, the Council urged the Italian authorities to further improve the collection and
   processing of general government data.
   Table 1: Adjustment endorsed by the Council on 28 July 2005
   % of GDP, unless indicated otherwise           2005             2006                      2007
   General government balance                     -4.3      deficit clearly < 4       deficit clearly < 3
   Temporary measures                              0.4               -                         -
   change in structural balance                              +1.6 in 2006-2007 over 2005 (at least)
                                                                    at least half of this in 2006
   p.m.: Real GDP growth (%)                        0               1.5                       1.5
   Note: structural balance = cyclically-adjusted balance excluding one-off and other temporary measures
   Source: Council recommendation under Article 104(7), quoting the Commission services’ spring 2005 forecast
   and including subsequent evaluations
   On 22 February 2006, i.e. after the expiry of the deadline for taking action set in the Council
   recommendation, the Commission adopted a communication to the Council, which concluded
   that action taken until then by Italy seemed to be consistent with the Council recommendation
   and that, while the budgetary situation remained vulnerable, no further steps under the EDP
   were necessary at that stage7. In its meeting of 14 March 2006, the Council concurred with
   this assessment.
   According to Article 104(12), a Council decision on the existence of an excessive deficit is to
   be abrogated, on the basis of a Commission recommendation, when the excessive deficit in
   the Member State concerned has, in the view of the Council, been corrected.
   2.         RECENT DEFICIT DEVELOPMENTS
   Data released by the national statistical office on 29 February 2008 confirmed the general
   government deficit of 3.5% of GDP in both 2003 and 2004, after successive revisions of the
   original 3.1% of GDP that prompted the Commission to initiate the EDP for Italy in 2005.
   The deficit in these two years would have been even higher in the absence of one-offs, worth
   1¾% and 1¼% of GDP respectively. From almost 5% of GDP at the end of the 1990s, the
   primary surplus fell rapidly to 1.2% in 2004. In 2005, when GDP stagnated, the general
   government deficit attained 4.2% of GDP, notwithstanding ½% of GDP of deficit-decreasing
   one-offs, and the primary surplus was almost fully eroded.
   7
            SEC(2006) 238.
EN                                                         3                                                  EN
 ---pagebreak---    Data reported by Italy before April 2008 show that a significant budgetary adjustment took
   place in 2006, when the general government deficit reached 3.4% of GDP8. This compares
   with a targeted deficit of 3.5% of GDP set in the December 2005 update of the stability
   programme9. The headline deficit was negatively affected by the government decision to
   cancel the debt of the railway company related to the high-speed project, which resulted in a
   0.9% of GDP increase in the deficit. The almost 0.9 pp. of GDP nominal adjustment between
   2005 and 2006 was driven by buoyant revenues coupled with a slight reduction in the ratio of
   current primary expenditure to GDP, obtained thanks to almost flat intermediate consumption.
   This outweighed the mentioned railway debt cancellation. The substantial increase in many
   revenue items was related to a number of measures in the 2006 Budget Law and in an
   additional budgetary package adopted at mid-year. VAT receipts, as well as personal and
   corporate income taxes, each rose by 0.3 pp. of GDP year-on-year.
   In 2006, revenues net of one-offs finished at 1½ pp. of GDP higher than in 2005, whereas
   expenditure net of one-offs declined by more than ¼ pp. of GDP. Excluding one-off and
   temporary measures10, the 2006 deficit declined to 3% of GDP from 4.8% in 2005.
   In 2006, the structural balance, i.e. the budget balance net of cyclical and one-off effects,
   improved by 1.7 pp. of GDP relative to 2005, well above the at least 0.8 pp. required in the
   July 2005 Council recommendation under Article 104(7).
   Based on data provided by the Commission (Eurostat) following the reporting by Italy before
   April 200811, the general government deficit in 2007 was at 1.9% of GDP. There is a very low
   probability that potential future revisions in government accounts would raise the 2007 deficit
   ratio in excess of 3% of GDP12.
   8
            The 2006 deficit was revised downwards from the 4.4% of GDP notified before April 2008 (Eurostat
            News Release No 55 of 23 April 2007 and No 142 of 22 October 2007). The revision is mainly the
            result of lower capital expenditure due to the decision to accrue VAT refunds, which are related to the
            ruling issued by the European Court of Justice (ECJ) on VAT on company cars, in the years in which
            the filed claims are validated, rather than in 2006 as originally planned.
   9
            The programme, as well as its assessment by the Commission and the Council, can be found at:
            http://europa.eu.int/comm/economy_finance/about/activities/sgp/main_en.htm.
   10
            One-off and temporary measures increased the 2006 deficit by 0.4% of GDP in 2006. On top of the
            deficit-increasing debt cancellation, the following transactions are treated as deficit reducing one-off:
            sales of real estate (0.1% of GDP) and taxes on the revaluation of companies’ assets (0.4% of GDP). By
            contrast, the 2005 update of the stability programme projected deficit-reducing one-off measures at
            0.3% of GDP in 2006.
   11
            Eurostat News Release No 54 of 18 April 2008.
   12
            Deficit ratios are usually revised - upwards or downwards - after the publication of the first outcome in
            the spring notification. Some past revisions in Italy have been quite significant. However, the gap
            between the currently reported deficit for 2007 and the deficit reference value is large enough to suggest
            that any revision should not bring the 2007 deficit above 3% of GDP.
EN                                                           4                                                         EN
 ---pagebreak---    The 1.9% of GDP deficit reported for 2007, including 0.2% of GDP overall deficit-increasing
   one-offs13, is much lower than the 2.8% of GDP targeted in the 2006 stability programme,
   which included 0.1% of GDP of deficit-decreasing one-offs. This better-than-planned result is
   due to the positive base effect from the 2006 deficit net-of-one offs, which turned out 1.5 pp.
   of GDP lower than estimated in the 2006 update of the stability programme. The
   implementation of the corrective measures adopted with the 2007 Budget Law was effective;
   however, the better starting position was to some extent offset by the partial implementation
   of some additional expenditure, mainly social transfers and capital expenditure, which was
   decided in the course of 2007.
   The 1½ pp. of GDP headline adjustment in 2007 relative to 2006 was largely achieved thanks
   to a further substantial increase, by 1.2 pp., in the revenue-to-GDP ratio. A surge in both
   personal and corporate income taxes largely offset the reduction in both the temporary
   revenue, stemming from the revaluation of company assets, and the indirect taxes/GDP ratio,
   mainly due to a decline of excise duties on oil products. The diversion of the severance pay
   scheme TFR to the Italian social security institute explains almost 0.4 pp. of the rise in social
   contributions as a share of GDP14. On the expenditure side, substantially lower (one-off)
   capital expenditure relative to 2006 was partly offset by the surge in interest expenditure. The
   share of current primary expenditure to GDP decreased marginally between 2006 and 2007,
   as subdued growth of compensation of employees, reflecting the absence of the sizeable
   arrears paid in 2006, was largely compensated by an increase of social transfers other than in
   kind. Overall, primary expenditure fell by almost ¾ of a percentage point of GDP, while total
   expenditure declined by around ¼ of a percentage point of GDP in 2007.
   In 2007, revenues net of one-offs increased by 1½ pp. of GDP compared with 2006, whereas
   expenditure net of one-offs rose by more than ¼ pp. of GDP. Excluding this and other one-off
   and temporary measures, the 2007 deficit was 1.7% of GDP.
   The structural balance, i.e. the cyclically adjusted budgetary balance excluding one-off
   measures, is estimated to have improved by about 1¼ percentage points of GDP in 2007.
   Over the 2006-2007 period, the correction of the structural deficit amounted to 3 pp. of GDP.
   This exceeds by a comfortable margin the at least 1.6 pp. required by the July 2005 Council
   recommendation under article 104(7).
   13
           The 0.2% of GDP estimate of the deficit-increasing impact of one-off measures in 2007 is the result of
           0.2% of GDP deficit-decreasing one-offs, comprising proceeds from the sale of real estate and taxes on
           the revaluation of company assets, and the 0.4% deficit-increasing one-offs, which consisted of (i) the
           decision, adopted on 31/12/2007, to discontinue the obligation on tax collectors to advance to
           government the payment of a certain amount of taxes to be collected in the following year (0.3% of
           GDP); and (ii) reimbursement claims filed by taxpayers following the ECJ ruling against Italy's VAT
           regime for company cars (less than 0.1% of GDP).
   14
           The 2007 Budget Law ruled that employers with at least 50 employees should divert the severance pay
           scheme (Trattamento di Fine Rapporto – TFR) flows that employees decide not to transfer to private
           pension schemes towards a new scheme set up within the Italian social security institute (Istituto
           Nazionale della Previdenza Sociale - INPS). The flows accumulated in the new INPS scheme are
           recorded as government revenue that reduces the deficit, but the liabilities they generate for the
           government in the form of severance payments to employees will gradually translate into additional
           public expenditure. The deficit-reducing impact of this provision is projected to decrease over time, and
           within 8-9 years additional revenue and expenditure are expected to balance out.
EN                                                       5                                                           EN
 ---pagebreak---    In line with the invitation in the Council recommendation under Article 104(7) that Italy
   further improve the collection and processing of general government data, Italy has reduced
   statistical discrepancies. The development of online government is leading to a more efficient
   collection of information on budgetary transactions. Some shortcomings remain, like for
   instance a significant discrepancy between accrued and collected social contributions in 2006
   and 2007, Following the September 2005 EDP notification, Eurostat published Italy's data
   with no pending issues.
   3.        DEFICIT PROJECTIONS FOR 2008 AND BEYOND
   According to the Commission services' spring 2008 forecast, the general government deficit
   for 2008 is projected to increase to 2.3% of GDP, with real GDP growing at 0.5%. Net of one-
   off and temporary measures, i.e., proceeds from the sale of real assets and the final
   instalments of some one-off taxes, the 2008 deficit would still be below the reference value, at
   2.4% of GDP. In the November 2007 update of the stability programme of Italy, the official
   deficit objective for 2008 was 2.2% of GDP, also including around 0.1% of GDP of deficit-
   decreasing one-offs. Despite the better-than-estimated 2007 deficit outturn, the official deficit
   projection for 2008 was revised upwards on 12 March, to 2.4% of GDP, later confirmed in the
   April 2008 notification. The revision incorporates lower expected real GDP growth (0.6% as
   compared to 1.5% of GDP in the update), but also budgetary slippages. The slightly lower
   projection for the 2008 deficit in the spring forecast is explained by the assumption that some
   delays will continue to be experienced in the budgetary execution of investments. The spring
   forecast also projects lower interest expenditure.
   The 2.3% of GDP deficit in 2008 in the Commission services spring 2008 forecast would
   represent a rise in nominal terms close to ½ of a percentage point of GDP compared to 2007,
   despite the sharp drop of capital expenditure, which reflects the substantial one-off
   expenditure accrued in 2007. The projected worsening in the nominal deficit reflects not only
   lower economic growth, but also the negative budgetary impact of the 2008 budget, as well as
   some expansionary measures originally planned in 2007 and others adopted in the first few
   months of 2008. Specifically, the 2008 budget envisages the financing of the public sector
   wage agreement at local level for the period 2006-2007, including the due arrears (in the
   official projections, the wage bill increases by more than 6% in 2008 and slightly declines in
   2009), cuts in local property taxes, lower revenue due to rent deductibility and some increase
   of unemployment benefits. The budget law also stipulates a reform of both the tax rates on
   corporate income (IRES) and the regional tax on productive activity (IRAP), the budgetary
   impact of which would turn from positive in 2008 to negative in 2009, before becoming
   neutral in the following years. Some additional social transfers and investments approved in
   2007, as well as cuts in IRAP in the 2006 budget law, will have a delayed adverse budgetary
   impact in 2008. A number of minor measures involving additional expenditure and lower
   revenue were adopted by Parliament in February 2008. Overall, in 2008, expenditure net of
   one-offs should increase by 0.5 pp. of GDP, as a modest decline in the ratio of both interest
   expenditure and capital expenditure net of one-offs would be more than offset by a surge of
   current primary expenditure. Revenues net of one-offs should decline by almost 0.2 pp. of
   GDP in 2008.
EN                                                 6                                                 EN
 ---pagebreak---    Under unchanged policies, risks to the budgetary projections for 2008 emanate from pending
   court rulings, in particular concerning the non-deductibility of IRAP from the tax base of
   income taxes. Risks also arise from the economic growth outlook. In addition, the outcome of
   the substantial changes in corporate taxation is subject to considerable uncertainty in both
   directions.
   For 2009, the Commission services spring 2008 forecast, based on the conventional no-policy
   change scenario and real GDP growth at 0.8%, envisages that the general government deficit
   will rise slightly to 2.4% of GDP. This projected modest increase is driven by a falling tax
   burden, particularly lower corporate income taxes, as a result of both discretionary measures
   and the negative economic cycle. The November 2007 update of the stability programme
   targeted a deficit of 1.5% of GDP, with real GDP growing by 1.6%. As highlighted in the
   Council Opinion on the 2007 update of the Italian stability programme15, no corrective
   measures underlying the budgetary adjustment were spelled out in the programme.
   The projected deterioration of the structural position in 2008 compared to 2007, by more than
   ¼ of a percentage point of GDP, is clearly not in line with the at least 0.5% of GDP annual
   reduction that is stipulated in the Stability and Growth Pact and recalled in the Council
   decision under Article 104(7) after the excessive deficit has been corrected. In its opinion on
   the November 2007 update of the stability programme, which projected an improvement in
   the structural position of ¼ pp. of GDP in 2008, the Council noted that the structural balance
   risked deteriorating substantially in 2008, unless the better-than-projected 2007 starting
   position was carried through and concluded that the MTO might not be achieved by 2011 as
   planned in the programme. Accordingly, the Council invited Italy to strengthen the budgetary
   target for 2008, so as to secure an ambitious adjustment, and implement the planned fiscal
   consolidation thereafter, with specified measures to ensure adequate progress towards the
   MTO, so as to achieve it within the programme period, i.e. 2011.
   4.        DEBT DEVELOPMENTS AND PROJECTIONS
   Data released by the national statistical office on 29 February 2008 showed a general
   government debt at around 104% of GDP in both 2003 and 2004, after successive revisions of
   the original 106-107% of GDP that was observed at the time the EDP for Italy was initiated
   essentially due to a higher estimate of the GDP level. In 2005, the debt-to-GDP ratio
   increased for the first time in a decade, by 2 pp. Primary surplus provided almost no
   contribution to its reduction whereas, due to sluggish economic growth, the implicit interest
   rate on government debt largely exceeded nominal GDP growth, implying a significantly
   negative "snow ball" effect. The government debt ratio increased again in 2006 despite an
   increasing primary surplus and a less negative "snow ball' effect. In that year the "stock-flow"
   adjustment provided a particularly negative contribution to debt development, essentially
   because of the accumulation of liquid assets to finance the estimated VAT reimbursements
   following the ECJ ruling on VAT on company cars (see Footnote 8). In 2007, the government
   debt-to-GDP ratio decreased by 2.5 pp., to 104% of GDP, back to the level recorded in 2004.
   This result was achieved thanks to an increased primary surplus exceeding 3% of GDP. The
   "stock-flow" adjustment also contributed to the fall in the debt ratio as state liquid assets were
   reduced substantially at the end of 2007 relative to the previous year given the much smaller-
   than-anticipated amount of VAT reimbursements actually claimed by taxpayers. In addition,
   15
           OJ C 49, 22.2.2008, p. 49.
EN                                                 7                                                  EN
 ---pagebreak---    the "stock-flow" adjustment in 2007 benefited from a distribution of capital amounting to
   around 0.2% of GDP by a state-owned company (SACE SpA).
   The debt reduction over 2006-2007, based on an increasing primary surplus and without
   significant debt-increasing operations below the line, appears in line with the correction of the
   excessive deficit. However, as the primary surplus is projected to fall in 2008 and measures to
   raise it again in the medium-term have not been spelled out, the debt ratio is expected to
   decline only slightly in 2008 and 2009 (on a no-policy change basis).
   The Commission services' spring 2008 forecast, based on the no-policy change assumption,
   projects a continued reduction in the government debt ratio in 2008 and 2009, albeit at a
   slower pace due to a worsening primary surplus and dismal economic growth. Risks
   associated with economic growth and budgetary developments also apply to the debt-to-GDP
   ratio.
   5.        CONCLUSIONS
   The general government deficit increased from 3.5% of GDP in 2003 and 2004 to 4.2% of
   GDP in 2005. It then declined to 3.4% of GDP in 2006 and 1.9% in 2007, below the 3% of
   GDP reference value. The measures underlying the deficit reduction are mainly permanent in
   nature. Indeed, the deficit in 2006 and 2007 would have been even lower in the absence of
   one-offs. The structural balance, i.e. the cyclically-adjusted balance net of one-off and other
   temporary measures, improved by 3 pp. of GDP during 2006-2007, well above the fiscal
   effort of at least 1.6 pp. of GDP recommended by the Council. According to the Commission
   services’ spring 2008 forecast, the nominal deficit is expected to increase to 2.3% of GDP in
   2008 (still including one-offs amounting to about 0.1% of GDP, without which the deficit
   would nonetheless still be below 3% of GDP) and, on a no-policy change basis, to 2.4% in
   2009. This indicates that the deficit has been brought below the ceiling of 3% of GDP in a
   credible and sustainable manner.
   After decreasing for a decade to just below 104% of GDP in 2004 (from more than 121% of
   GDP in 1994), the government debt ratio increased by 2 percentage points of GDP in 2005
   and by further 0.6 of a percentage point in 2006. The debt ratio fell again to 104% of GDP in
   2007. The development of the debt ratio was significantly affected by a temporary
   debt-increasing financial operation in 2006 and its reversal in 2007. Without this operation the
   debt ratio would have remained broadly stable in 2006, reflecting the improvement in the
   primary surplus in line with the Council recommendation. According to the Commission's
   spring 2008 forecast, under the assumption of unchanged policies the debt ratio is projected to
   fall to around 102½% by 2009. The debt ratio can be considered to have diminished in line
   with the correction of the excessive deficit in 2007.
   From an overall assessment, it follows that the excessive deficit situation in Italy has been
   corrected. Accordingly, the Commission recommends that the Council abrogates its decision
   on the existence of an excessive deficit in Italy.
EN                                                  8                                                EN
 ---pagebreak---        Table 2: Budgetary developments, 2003-2009
                                                                                2007            2008              2009
 % of GDP, unless indicated otherwise           2003      2004  2005   2006
                                                                              outturn  SP (2) COM        SP (2) COM(3)    SP(2)
 General government balance                      -3.5     -3.5  -4.2    -3.4    -1.9    -2.4   -2.3      -2.2    -2.4     -1.5
                                                                                (-2.4)
 - Total revenues(5)                             44.8     44.2  43.8   45.4     46.6   46.2    46.4      46.3    46.4     45.9
 - Total expenditure(5)                          48.3     47.7  48.0   48.8     48.5   48.6    48.7      48.5    48.7     47.9
 Of which: - interest expenditure                 5.1      4.7    4.5    4.6     5.0     4.8    4.9       4.9     4.9      4.9
                                                                                (5.0)
 - gross fixed capital formation                  2.5      2.4    2.4    2.4     2.4     2.7    2.4       2.5     2.4      2.6
 Primary balance                                  1.6      1.2   0.3     1.3     3.1     2.5    2.6       2.6     2.5      3.4
                                                                                (2.6)
 One-off and temporary measures                   1.7      1.3   0.6    -0.4    -0.2     0.2    0.1       0.1     0.0      0.1
 Structural balance(1)                           -5.1     -4.7  -4.5    -2.8    -1.5    -2.2   -1.9      -2.0    -1.6     -1.3
                                                                                (-2.2)
 Structural primary balance(1)                    0.0      0.0   0.0    1.8     3.5     2.6    3.1        2.9     3.3      3.6
 Government gross debt(4)                       104.3 103.8 105.8 106.5 104.0 105.0           103.2 103.5 102.6          101.5
                                                                                (103.0)
 Change in debt ratio (a) = (b) + (c) + (d)      -1.3     -0.5   2.0     0.6    -2.5    -1.8   -0.8      -1.6    -0.6     -2.0
 Contributions: - primary balance (b)            -1.6      -1.2  -0.3   -1.3    -3.1    -2.5   -2.6      -2.6    -2.5     -3.4
                 - “snow ball” effect (c)         1.9       0.5   1.9    0.9     1.1     0.1    1.5       0.9     2.0      1.5
                 - stock-flow adjustment (d)     -1.6      0.3    0.5    1.0    -0.5     0.6    0.4       0.2    -0.1     -0.1
 Pm         Real GDP growth (%)                   0.0      1.5   0.6     1.8     1.5     1.9    0.5       1.5     0.8      1.6
                                                                                (0.6)
 Pm         Output gap                           -0.2      0.0  -0.6    -0.3    -0.3    -0.6   -1.0      -0.6    -1.6     -0.6
 (1)
            Cyclically-adjusted (primary) balance excluding one-off and temporary measures.
 (2)
             Cyclically-adjusted and structural balances and output gaps according to the programme as calculated by
             Commission services on the basis of the information in the programme.
 (3)
            No-policy change assumption.
 (4)
            The change in the gross debt ratio can be decomposed as follows:
             Dt Dt −1 PDt ⎛ Dt −1 it − y t             ⎞ SFt
                 −         =        + ⎜⎜      *        ⎟⎟ +
             Yt      Yt −1     Yt      ⎝ Yt −1 1 + y t  ⎠ Yt
             where t is a time subscript; D, PD, Y and SF are the stock of government debt, the primary deficit, nominal GDP
             and the stock-flow adjustment respectively, and i and y represent the average cost of debt and nominal GDP
             growth. The term in parentheses represents the “snow ball” effect.
 (5)
             Budgetary data provided in the SP for 2009 are trends based on unchanged legislation. In order to achieve the
             targeted general government balance, additional measures with a positive impact of 0.4% of GDP were envisaged.
 Sources: Commission services’ spring 2008 forecast (COM)and November 2007 update of the stability programme (SP) (in
 brackets new official projections based on unchanged legislation of March 2008).
EN                                                                9                                                          EN
 ---pagebreak---                                          Recommendation for a
                                        COUNCIL DECISION
        abrogating Decision 2005/694/EC on the existence of an excessive deficit in Italy
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community, and in particular
   Article 104(12) thereof,
   Having regard to the recommendation from the Commission,
   Whereas:
   (1)     By Council Decision 2005/694/EC16, following a recommendation from the
           Commission in accordance with Article 104(6) of the Treaty, it was decided that an
           excessive deficit existed in Italy. The Council noted that the general government
           deficit was above but close to the 3% of GDP reference value in both 2003 and 2004,
           while general government gross debt stood at around 106-107 % of GDP in both
           years, clearly above the 60 % of GDP Treaty reference value, and it had not declined
           at a satisfactory pace over recent years.
   (2)     On 28 July 2005, in accordance with Article 104(7) of the Treaty and Article 3(4) of
           Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the
           implementation of the excessive deficit procedure17, the Council made, based on a
           recommendation from the Commission, a recommendation addressed to Italy with a
           view to bringing the excessive deficit situation to an end by 2007 at the latest. The
           recommendation was made public.
   (3)     In accordance with Article 104(12) of the Treaty, a Council Decision on the existence
           of an excessive deficit is to be abrogated when the excessive deficit in the Member
           State concerned has, in the view of the Council, been corrected.
   (4)     In accordance with the Protocol on the excessive deficit procedure annexed to the
           Treaty, the Commission provides the data for the implementation of the procedure. As
           part of the application of this Protocol, Member States are to notify data on
           government deficits and debt and other associated variables twice a year, namely
           before 1 April and before 1 October, in accordance with Article 4 of Council
           Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol
   16
           OJ L 266, 11.10.2005, p. 57.
   17
           OJ L 209, 2.8.1997, p. 6. Regulation as amended by Regulation (EC) No 1056/2005 (OJ L 174,
           7.7.2005, p. 5).
EN                                                  10                                                EN
 ---pagebreak---        on the excessive deficit procedure annexed to the Treaty establishing the European
       Community18.
   (5) Based on data provided by the Commission (Eurostat) in accordance with Article
       8g(1) of Regulation (EC) No 3605/93 following the notification by Italy before 1 April
       2008 and on the Commission services’ spring 2008 forecast, the following conclusions
       are warranted:
        –      the general government deficit, after rising from 3.5 % of GDP in 2004 to 4.2%
               of GDP in 2005, was reduced to 3.4% of GDP in 2006 and finally to 1.9 % of
               GDP in 2007, which is below the 3% of GDP deficit reference value. Net of
               the budgetary impact of one-off measures, the deficit would be 1.7% of GDP in
               2007. This compares with a target of 2.8% of GDP set in the December 2006
               update of the stability programme,
        –      the adjustment was driven by an increase in permanent tax revenues over the
               2006-2007 period, which largely exceeded expectations. This was mostly
               thanks to a higher-than-expected effectiveness of the adopted measures and
               somewhat higher-than-projected economic growth. After an estimated
               worsening by ¼ of a percentage point of GDP in 2005, the structural balance
               (i.e. the cyclically-adjusted balance net of one-off and other temporary
               measures) is estimated to have improved by 1¾ and 1¼ percentage points of
               GDP in 2006 and 2007, respectively,
        –      for 2008, the spring 2008 forecast projects an increase in the deficit to 2.3% of
               GDP, including 0.1% of GDP one-offs proceeds from the sale of real estate.
               The envisaged worsening of the budgetary balance will be driven by both a rise
               in the ratio of current primary expenditure to GDP and lower current taxes.
               This is partly offset by an anticipated decline of capital expenditure, which
               reflects the substantial one-off expenditure accrued in 2007. Although the 2.3%
               of GDP deficit projection is only slightly above the official deficit target of
               2.2% of GDP set in the November 2007 update of the stability programme, the
               latter was projected using an estimated deficit outturn in 2007 significantly
               higher than the reported outcome. For 2009, the spring forecast projects, on a
               no-policy change basis, a deficit of 2.4% of GDP. This implies that the deficit
               has been brought below the 3% of GDP ceiling in a credible and sustainable
               manner. The structural balance is projected to worsen by more than ¼ of a
               percentage point of GDP in 2008 and, on a no-policy change basis, to improve
               by ¼ of a percentage point in 2009. This has to be seen against the need to
               make progress towards the medium-term objective (MTO) for the budgetary
               position, which for Italy is a balanced position in structural terms,
   18
       OJ L 332, 31.12.1993, p. 7. Regulation as last amended by Regulation (EC) No 2103/2005 (OJ L 337,
       22.12.2005, p. 1).
EN                                                  11                                                   EN
 ---pagebreak---             –    after decreasing for a decade to just below 104% of GDP in 2004 (from more
                 than 121% of GDP in 1994), the government debt ratio increased by
                 2 percentage points of GDP in 2005 and by further 0.6 of a percentage point in
                 2006, to 106½% of GDP. The debt ratio fell again to 104% of GDP in 2007.
                 The development of the debt ratio was significantly affected by a temporary
                 debt-increasing financial operation, i.e. the accumulation of liquid assets, in
                 2006 and its reversal in 2007. Without this operation the debt ratio would have
                 remained broadly stable in 2006, reflecting the improvement in the primary
                 surplus in line with the Council recommendation. According to the
                 Commission's spring 2008 forecast, under the assumption of unchanged
                 policies the debt ratio is projected to fall to around 102½% by 2009. The debt
                 ratio can be considered to have diminished in line with the correction of the
                 excessive deficit in 2007.
   (6)    In the view of the Council, the excessive deficit in Italy has been corrected and
          Decision 2005/694/EC should therefore be abrogated.
   HAS ADOPTED THIS DECISION:
                                               Article 1
   From an overall assessment it follows that the excessive deficit situation in Italy has been
   corrected.
                                               Article 2
   Decision 2005/694/EC is hereby abrogated.
                                               Article 3
   This Decision is addressed to the Republic of Italy.
   Done at Brussels,
                                                For the Council
                                                The President
EN                                                12                                             EN


title: Recommendation for a DECISION OF THE COUNCIL concluding an Agreement between the European Economic Community and the World Food Programme on the supply of cereals as food aid to developing countries (submitted to the Council by the Commission)

text:
ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (73) 66
Vol. 1973/0007
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak---  COMMISSION              OP     THE    EUROPEAN          COMMUNITIES
                                                         COM(73)66 final
                                                         Brussels , 26 January 1973
                            Recommendation for a
             ,             DECISION OF THE COUNCIL
              concluding an Agreement between the European
             Economic Community and the World Food Programme
             on the supply of cereals as food aid to developing
                                  countries
                  ( submitted to the Council Toy the Commission )
COM(73 ) 66 final
 ---pagebreak---                        EXPLANATORY MEMORANDUM
 1.  The Council , "by written procedure which expired on 23 May 1972 , drew up
    the 1971-72 outline plan for implementing commitments entered into "by
    the Community and the Member States under the 1971 Pood Aid Convention.
    In accordance with that Decision, the Commission negociated the agree
    ment with the WFP for the supply of 15 000 metric tons of cereals to
    developing countries (Recommendation for a Council Decision and Agree
    ment annexed hereto ).
2.  As regards the procedure to "be followed for Community approval of the
    programme which is to "be submitted to the Community "by the WPP in
    accordance with Article II of the Draft Agreement , the Commission
    points out that in order to implement the preceding Agreement with the
    WFP for the supply of 9 000 metric tons of cereals the Council , at its
    meeting on 25/26 September 1972 appointed the text to be recorded in its
    minutes of the declaration contained in the Annex to document r/758/72
    ( COMER 125 )* That declaration provides for a special accelerated
    procedure .                                                  ' '
                                                                        *
CONCLUSION
The Commission recommends that the Council adopt the Decision annexed hereto
concluding an agreement with the WPP for the supply of 15 000 metric tons of
cereals .
 ---pagebreak---            RECOMMENDATION" FOR A DECISION OP THE COUNCIL
     concluding an Agreement "between the European Economic Community
     and the World Pood Programme on the supply of cereals as food
     aid to developing countries
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community
and in particular Articles 113 , 114 and 228 thereof ;
Having regard to the recommendation from the Commission ;
Whereas the European Economic Community has deposited a declaration of
provisional application of the 1971 Pood Aid Convention ; whereas that
Convention takes effect from 1 July 1971 »
Whereas the World Pood Programme has given notice of its requirements in
cereals for the purpose of meeting emergency food requirements and of
carrying out projects for economic and social development in developing
countries, and whereas for that purpose a quantity of products equivalent
to 15 000 metric tons of unprocessed cereals should "be made available to
the World Pood Programme, under the 1 971/72 Community food aid programme
HAS DECIDED AS FOLLOWS :
 ---pagebreak---                            Article 1
The Agreement "between the European Economic Community and the World i< ood
Programme on the supply of cereals as food aid to developing countries ,
the text of which is annexed, is hereby concluded on "behalf of the European
Economic Community .
                           Article 2
The President of the Council is authorized to designate the persons
empowered to sign the Agreement and to confer upon them the powers
required in order to "bind the Community .
Done at                       19–                     By the Council
                                                      The President
 ---pagebreak--- >
                   AGRF.EMENT
 BETWEEN . THE EUROPEAN ECONOMIC COMMUNITY
       AND THE WORLD POOD PROGRAMME
           ON THE SUPPLY OF CEREALS
    AS FOOD AID TO DEVELOPING COUNTRIES
 ---pagebreak---  THE COUNCIL OP THE EUROPEAN COMMUNITIES,
                                            on the one hand, and
 THE WORLD POOD PROGRAMME , a Programme undertaken jointly "by the
United Nations and the Pood and Agriculture Organization of the
United Nations ,
                                            on the other hand,
Whereas the aim of the World Pood Programme is to make use of contributions
received under the Programme to meet with emergency food requirements and
to carry out projects involving the use of foodstuffs for economic and
social development purposes ;
Whereas the European Economic Community , whose Members are the Kingdom
of Belgium ,the Kingdom of Denmark, the Federal Republic of Germany , the
French Republic , Ireland , the Italian Republic, the Grand Duchy of .
Luxembourg, the Kingdom of the Netherlands and the United Kingdom of
Great Britain and Northern Ireland, who are all members of the United
Nations or the Food and Agriculture Organization of the United Nations ,
deposited a declaration of provisional application of the 1971 Pood Aid
Convention ;  whereas that Convention enters into force on 1 July 1971 *
Have decided to conclude this Agreement and have appointed as their
representatives for this purpose :
 ---pagebreak--- THE BOUNGIti ©F THB BUR9PEAN eSMMUNfl^IES i
THE WORLD FOOD PROGRAMME :
WHO HAVE AGREED UPON THE FOLLOWING PROVISIONS
 ---pagebreak---                              ARTICLE I
      Under its food aid programme ( cereals ) for the year
 1971/72 , and in accordance with the decision taken by the
Council on 23 May 1972 ,    the European Economic Community
undertakes to supply to the World Food Programme as a free
gift the equivalent of 15 000 metric tons of unprocessed
cereals for developing countries .
                             ARTICLE II
      The V/orld Food Programme undertakes to use the cereals
supplied as aid for emergency or for economic and social
development and food aid projects which shall be subject to'
prior approval by the European Economic Community .
                            ARTICLE III
1.        For each delivery , the European Economic Community ,
    taking into account the information received from the V/orld
    Food Programme , shall notify the latter in good time of the
    port or ports of shipment and the dates of availability 'at
    the said port or ports .
2.        Only seaports accessible to ocean-going vessels and
    utilized for' international freight may be named as ports of
    shipment .           '
                             ARTICLE IV
      The 15 000 metric tons of unprocessed cereals shall be
supplied in the natural state or in the form of products of
the' first processing stage , as requested by the V/orld Food
Programme and agreed by the European Economic Community .
Deliveries shall be made in bulk or packed in jute or cotton -
sacks with a gross content of 50 kg net , in accordance v;ith the
requirements of the projects .
 ---pagebreak---                               ARTICLE V
1.        The European Economic Community shall arrange for
     delivery f.o.b . port of shipment . The responsibilities of
     the European Economic Community and the World Food Programme
     with regard respectively to delivery f.o.b . and to talcing
     delivery shall be laid down in an exchange of letters
     between the Contracting Parties .
2.        The World Food Programme shall take delivery of the
     goods delivered and be responsible , in accordance with its
     general rules / for their transport , insurance and distri
     bution in the country of destination .
                                                                      A
3.        For the expenses referred to in paragraph 2 , the
     European Economic Community shall make to the World Food
     Programme a contribution of 14.28 US dollars per metric ton charge
     able to 'it . The European Economic Community undertakes to
     pay this contribution within thirty days following each
     acceptance of delivery of goods by the World Food Programme .
             . .   ■*    '                                       *
   ^                          ARTICLE VI
       The World Food Programme undertakes to inform the
European Economic Community of the conditions under which this
Agreement is implemented . To this end it shall make available
to the Commission of the European Communities :
( a ) with regard to transport : within a reasonable period
      after unloading , reports indicating the dates of arrival
      of the vessels at the ports of destination , quantities and
      qualities of products unloaded , and the dates on which
      unloading was completed ;
 ---pagebreak---                                 ■           ■                   ■ ■' 1 .
 ( b ) with regard to the use made of products : periodic infor
        mation on the progress made with projects for which
      . Community assistance has been provided ; on the use made of
        the products ; on the quantity distributed and on the
        number of beneficiaries together with details of the
        methods used for distributing the products , and in parti
       cular of the measures taken to prevent the products from
        being drawn into commercial channels .
                               ARTICLE VII
         In the event of fresh circumstances arising , the World
Food Programme and the European Economic Community shall
together decide on any amendments to be made to this
Agreement .
         .  • '                ARTICLE VIII   .
         This Agreement shall enter into force thirty days after
the date of signature .
                             . ARTICLE IX
         This Agreement is drawn up m two copies in the German ,
English , Danish, Spanish, French, Italian and Dutch languages,
these texts being equally authentic .
 ---pagebreak---                        EXCHANGE OP LETTERS
 Letter from the Representative of the World Food Programme
         With reference to the Agreement between the European
JEconomic Community and the World Food Programme on the
 supply of cereals as food aid to developing countries , and
particularly to Article V ( 1 ) of that Agreement , I would
propose that the following procedure be applied for delivery
f.o.b » by the European Economic Community ( EEC ) , and accep
tance of delivery by the World Food Programme ( WFP ), of
15 000 metric tons of cereals :
        . on the basis of information received from the WFP
           concerning transport , the EEC shall notify the WFP ,
           for each delivery , of the supplier or suppliers and
           shall indicate a period of fifteen days within which
          the WFP may fix the date of delivery :
          not less than fifteen days before the date laid down ■
          for each delivery , the WFP : shall notify the EEC of '
          the estimated date of arrival of the vessel in port ;
       . the WFP shall also notify the supplier or suppliers ,
          not less than five days in advance , of the exact date
          of arrival of the vessel in the designated port of
          shipment ;
      . the goods shall be delivered by the EEC to the place ■
          of shipment and on the date of availability indicated
     • pursuant to Article III of the Agreement ;        -      i -
          delivery shall be deemed to have been effected once
          the goods effectively pass the ship 's rail at the
          port of shipment , all costs of stowage being borne by
   .      the WFP ;
 ---pagebreak--- at the moment of delivery , risks shall pass from the
EEC to the WFP , all costs prior to delivery being
borne by the EEC and all costs after delivery being
borne by the WFP ;
should the EEC fail to deliver the goods at the
place and date indicated , where the WFP has rendered
it possible , any consequences resulting from this
shall be borne by the EEC ;
should the WFP fail to take delivery of the goods at
the place and date indicated , where the EEC has
rendered it possible , any consequences resulting from ,
this shall be borne by the WFP ;
the EEC and the WFP reserve  the right to nominate one
or more agents to implement  the Agreement , To deal
with any eventualities , the WFP shall nominate a
representative in each port  of shipment .
 ---pagebreak--- II . totter from the Representative of the European Economic
     Community
          I acknowledge herewith receipt of your letter dated
                             , worded as follows :
               " With reference to the Agreement between the
       ♦  European Economic Community and the World Food
          Programme on the supply of cereals as food aid to
          developing countries , and particularly to Article V ( 1 )
          of that Agreement , I would propose that the following
          procedure be applied for delivery f.o.b . by the
          European Economic Community ( EEC ) , and acceptance of
          delivery by the World Food Programme ( WFP ), of 15 000
          metric tons of cereals :
                 on the basis of information received from the
                 WFP concerning transport , the EEC shall notify
                 the WFP , for each delivery , of the supplier or
                 suppliers and shall indicate a period of fifteen
                 days within which the 'WFP may fix the date of
                 delivery ;
                 not less than fifteen days before the date laid
                 down for each delivery , the WFP shall notify the
                 EEC of the estimated date of arrival of the
                 vessel in port ;
                 the WFP shall also' notify the supplier or sup
                 pliers , not less than five days in advance , of, .
                 the exact date of arrival of the vessel in the
                 designated port of shipment ;
                 the goods shall be delivered by the EEC to the
                place of shipment and on the date of availabi
                 lity indicated pursuant to Article III of the
                 Agreement ;
 ---pagebreak---               delivery shall be deemed to have been effected
              once the goods effectively pass the ship 's rail
              at the port of shipment , all costs of stowage
              being borne by the WFP ;
              at the moment of delivery , risks shall pass
          i
              from the EEC to the WPP , all costs prior to
              delivery being borne by the EEC and all costs
              after delivery being borne by the WFP ;
              should the EEC fail to deliver the goods at the
              place and date indicated , where the WFP has
              rendered it possible , any consequences resul
              ting from this shall be borne by the EEC ;
              should the WFP fail to take delivery of the
              goods at the place and date indicated ,• where
              the EEC has rendered it possible , any conse
              quences resulting from this shall be borne by
              the WFP ;
              the EEC and the WFP reserve the right to-
              nominate one or more 'agents to implement the
              Agreement . To deal with any eventualities , the
              WFP . shall nominate a representative in each
              port of shipment ."
                                                   /•
    I would inform you that the EEC agrees to your pro
posals regarding the procedure for delivery and acceptance
of delivery of the cereals .
   • I request you to consider this procedure as settled
between the WFP and the EEC , in implementation of
Article V ( 1 ) of the said Agreement .


RECOMMENDATION FOR COUNCIL DECISION ON NEGOTIATIONS FOR A FOURTH INTERNATIONAL COCOA AGREEMENT


title: Recommendation for a Council Decision giving notice to France, in accordance with Article 104(9) of the EC Treaty, to take measures for the deficit reduction judged necessary in order to remedy the situation of excessive deficit

text: ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---


title: RECOMMENDATION FOR A COUNCIL DECISION on the conclusion of an agreement between the European Economic Community and Mauritius for the supply of cereals as food aid (submitted to the Council by the Commission)

text:
ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 1508
Vol. 1974/0242
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
 ---pagebreak---   COMMISSION OF THE EUROPEAN COMMUNITI ES
                                                        COM(74 ) 1508 final
                                                        Brussels , 19 September 1974
                              RECOMMENDATION FOR A
                                COUNCIL DECISION
on the conclusion of an agreement between the European Economic Community
             and. Mauritius for the supply of cereals as food aid
                 ( submitted to the Council by the Commission)
001.1(74) 1508 final
 ---pagebreak---  THE COUNCIL" OF THE EUROPEAN COMMUNITIES,
 Having regard to the Treaty establishing the European Economic Community ,
 and in particular Articles 113 > 114 and 223 , thereof ;
                                     \
 Having regard to the Recommendation from the Commission ;
 Whereas the European Eoonomio Community has oonoluded the second Convention
  relating 'to food aid^
 Whereas Mauritius , by its letter of 23 . 11 * 1974          <
 has requested food aid ;
                                                          j
 Whereas in view of the cereal supply situation in Mauritius that country
 should be accorded , by way of gift , 10.000 tonnes of cereals in the form of
 6.623 tonnes of flour of soft wheat under the Community Food Aid Program
 for 1973/74 ;
 DECIDES :
                               Article    1
 On behalf of the European Economic Community an Agreement , the text whereof
 is annexed hereto , shall be concluded between the European Economic Conuauni
 and Mauritius for supply of flour of soft wheat as food . aid .
                               Article    2
 The President of the Council is hereby authorized to designate those who
 are to sign the Agreement and to confer on them the requisite powers to
 bind the Community *
 Done at Brussels ,               19
                                                     For the Council
                                                      The Président
'^O.J. L 219 of 9.8.1974,
 ---pagebreak---               AGREELZENT
BETWEEN THE EUROPEAN ECONOMIC COMMUNITY
AND THE MAURITIUS ON               ■ '
THE SUPPLY OF FOOD AID IN THE FORI ! OF
CEREALS .
 ---pagebreak--- TIIE COUNCIL OF THE EUROPEAN COMMUNITIES ,
                                  \
                                    \
                                      \    of the one part ,
THE GOVERNMENT OF MAURITIUS '
                                           of the othcr part ,
HAVE DECIDED to conclude this Agreement and to this end have
designate , as their plenipotentiaries :
THE COUNCIL OF THE EUROPEÀN C0WÎU1JITIES :
THE GOVSRivEl'JDNT OF MAURITIUS î
WHO HAVE AGREED AS FOLLOWS î
 ---pagebreak---                                            \
                            ARTICLE  I
The European Economic Community shall supply "by way of gift to
 Mauritius            ( hereafter referred to as "the recipient country ") a
quantity of 10 000 tonnes of cereals in the "form of 6 623 tonnes of flour
 of sort wheat under the Community 's food aid program in cereals for 1973/74 *
                            ARTICLE  II
  Deliveries will be made in new jute or jute-aloe sacks with a net weight of
  67 kg each , FOB in accordance with the details laid down in the Annex which
  forms an integral part of the present Agreement .
                           ARTICLE   III
The recipient country undertakes to make all necessary arrangements for the
transport and insurance of the products from point of delivery to places
of destination .
It undertakes to exercise the greatest care to ensure that the tendering
arrangements for sea transport do not prejudice the free play of fair
competition . Any problems arising in this connection shall be the subject
of consultations under Article VIII of the present Agreement .
        /
                            ARTICLE  IV
The recipient country undertakes to use the product received as aid for
purposes of consumption and to apply , for the sale of the product on its
market , the prices normally charged on that market for products of
comparable quality . The proceeds from this sale shall be paid into a special
account with the general accounts department and allocated to the financing of
one or more development projects under arrangements which have been
agreed in advance between the recipient country and the European Economic
Community *
 ---pagebreak---                               ARTICLE   V
The Contracting Parties undertake to implement this Agreement in such a way
as to avoid any prejudice to the normal structure of national production
and international trade . To this end they shsO.1 take any measures required
to ensure that supplies as aid are in addition to and do not replo.ee business
transactions which might reasonably be expected in the absence of such supplies
      /
In particular , the recipient country undertakes to import commercially frcm
whatever source between 1 July 1974 and 30 June 1975 a minimum quanity of
53.800       metric tons of soft wheat or its equivalent in flour of soft wheat .
                              ARTICLE   VI
The recipient country shall take all steps required to prevent :
( i ) the re-export of the product received as aid and also of any products
         and by-products resulting therefrom ;
( ii ) the export , commercially o.r otherwise , within a period of six months
         commencing from the final delivery , either of any product procured
         locally of the same nature as that received as aid , or of any products
         and by-products resulting therefrom .
                              ARTICLE   VII
The recipient country undertakes to inform the European Economic Community
of how this Agreement is implemented . To this end it shall provide the
Commission of the European Communities with the following details :
    ( i ) Immediately after the unloading of each cargo : ports and dates of
          arrival of vessel ; nature , quantity and any observations as to the
          quality of the products unloaded ; date on t;hich unloading was
          completed ; costs of sea transport and of insurance relating thereto ;
  ( ii ) Every three months until the quantities received as aid have been
          fully used : quantities sold ; manner of sale ; actual selling prices ;
          normal selling costs on the recipient country 's market ; costs of
          insurance and of transport if applicable from the port of unloading
          to the places of destination ;
 ---pagebreak--- ( iii ) On 15 January every year until the special account has been fully
        expended s
        a ) Summary of the account ( incomings and outgoings ) to 31 December
            of the previous year ;
        b ) Stage of progress of the project or projects , indicating the
  •■        total resources expended to that stage .
                                                                    1
                              ARTICLE   VIII
The Contracting Parties shall at the request of either consult each other
on any questions concerning the implementation of this Agreement .
                              ARTICLE   IX
This Agreement is drawn up in duplicate in the Danish , Dutch , English ,
French , German and Italian languages , each of these texts having equal force .
 ---pagebreak---    \ .                  General provisions
    '3
                             Article  1
 Delivery shall "be effected and risks shall pass form the European Economic
 Community , hereinafter referred to as the EEC , to the recipient country at
 the moment at which the goods are put down at the point of exportation
 named by the Commission of the European Communities at the berth specified
                                                                  v
 by the recipient country or its agent referred to m Article 3 and under the
terms specified in the following articles . V/ithout prejudice to Articles 8 and
 9 the EEC shall bear all costs tip to delivery and the recipient country those
beyond delivery .
                            Article  2
On delivery a tolerance of 5 h less than the quantity of the product to bs
supplied in accordance with article I of the Agreement shall be admissible .
                           Article   3
The EEC shall appoint an agent to implement the provisions of the present
Annex - or for each consignment - whose name and address it shall make
known to the recipient country immediately following his appointment .
The recipient country shall appoint an agent in the port or ports of ship
ment , whose name and address it shall make known to the EEC with all
despatch and if possible before the appointment of agent of the EEC .
                           Article   4
Before implementing the procedures for appointing the agent of the EEC
referred to in Article 3 , the Commission of the European Communities and
the recipient country shall jointly establish the period during which
delivery must begin .
               Obligations of the European Economic Community
                           Article   5
Should the EEC not be in a position to carry out delivery on the date and
( if applicable ) on the schedule as provided in Article 7 » all costs
arising for the recipient country - for example demurrage void freight
and dead freight - shall be borne by the EEC .
 ---pagebreak---  Tho chariots and the arrangements
                              . T...    \
                                           r&lating to demurrage laid down in the
                                  "      *
 contract between the recipient country and the carrier must have been
 agreed in advance by the recipient' country and the agent of tho EEC .
                                             «
 The other coots referred to m the first paragraph shall only be refunded
 by the EEC if they have been paid by the recipient country with the approval
 of thé EEC .
     /
                                     Article     6                     -
                                                                          i
 Should it prove impossible for the EEC to supply all or part of the goods
                                     y
on the date and within the . time-limits provided for in Article ^ and without
prejudice to the provisions of Article 5 » a new date and a new time-limit
shall be agreed between the agents of the EEC and of the recipient country
for the delivery of all the goods or of the undelivered part thereof *
                    Obli /rations
                          a i
                                     of the recuaient
                                                   * -
                                                          country
                                                       ........ t. .
                                     Article     7
After contacting the EEC , the recipient country shall procure one or more
vessels to transport all the quantities provided for in Article 1 of the
Agreement , of dimensions corresponding to the normal capacity of the port of
shipment ; these vessels must be ready for loading on a date falling within
the period referred to in Article 4 *
The agent of the recipient country shall inform the EEC of this date
immcdately on learning it , and also '•that jfor commencement of delivery ,
if possible twenty days in advance and in any case ten days before the date
for commencement of delivery *
He shall establish with the agent of the EEC the schedule to which delivery
                       ».              •
ehall take place .
                                     Article     8
Should the recipient country be unable to begin loading on the date provided
for in Article 7t paragraph 1 , the agent of the recipient country shall
inform the agent of the EEC without delay .
 ---pagebreak---                                            V
 In this event a new date for the commencement of delivery and ( if applicable )
 a new schedule could be agreed between the agents of the EEC and of the
 recipient country . The costs arising from this delay shall in all cases
 except force majeure be borne by the recipient country .
 Should the new date provided for in paragraph 2 be more than 30 clear days
 after the date for ] oading provided for in Article 7i paragraph 1 , the EEC
     /
 may' dispose of the goods without prejudice to its commitment under Article 1
 of this Agreement .                                        .   ..
                                                                     i
                                  Article  9
                            «                             .        .
                                                                              /
 If the quantity made available for loading on a vessel cannot be put on
board in its entirety , the recipient country shall inform the EEC as soon
as possible and no later than fifteen clear days after loading has been
completed whether it intends to accept or to renounce the balance .
In the former case the provisions , of Article 8 , paragraphs 2 arid 3 » shall
apply to the balance , if delivery has not yet taken place .
In the latter ceise the EEC may consider that it has discharged its coi.mi1 merit
to the recipient country under Article 1 of this Agreement and shall bear
the costs resulting from such renunciation .                               ■
In any event after the expiry of an interval of fifteen clear days and in
the absence of any notice on the part of the recipient country , the renun
ciation shall be deemed to have taken place .
                                  Article  10
Upon delivery of the goods , the recipient country shall hand to the
agent of the EEC a certificate of acceptance stating the port of shipment ,
date of acceptance , the nature and quantity of the goods accepted and
including any comments on the quality of the goods , and send a copy thereof
to the Commission of the European Communities .