E Ropean .Community CONTENTS

OCTOBER 1971 NO. 149 e ropean .community CONTENTS 3 Community News European Community is pub I ished in English, French, Italian, German, Dutch, Greek, Spanish, and Turkish by the offices 11 Unity From Monetary Uncertainty Raymond Barre of the European Community Information Service. Subscriptions can be obtained The current monetary crisis has given the Community coun from the European Community Information tries an important role in seeking solutions. If they join Service. forces to do so, a strengthened Community will emerge from this crisis. Washington, D.C.: Suite 707, 2100 M Street, N.W., 20037 12 Picking Up the Pieces New York, N.Y.: The Six followed the common position on international 155 East 44th Street, 10017 London: monetary reform in the addresses made by their delegates 23 Chesham Street, SW1 to the annual meeting of the International Monetary Fund. Paris: 61, rue des Beiles-Feuilies, 16e Rome: Via Poli, 29 15 Flowers: The World's Hardest Currency Will J. Reckman Bonn: Florists belonging to lnterflora are protected by the asso Zitelmannstrasse 22 ciation from losses due to exchange rate fluctuations. Their The Hague: "fleurin" is the key. Alexander Gogelweg 22 Brussels: 200, rue de Ia Loi Luxembourg: 16 Competition: Is Brussels Too Lenient? Peter Ulmer Centre european Kirchberg Simplification of the Community's procedure for investi Geneva: 72, rue de Lausanne gating violations of its competition rules could improve enforcement. Managing Editor: 18 Europe's Next 50 Years Kari Blackburn Kathleen A. Lynch To influence the course of events in a world of super powers and to preserve its traditional humanistic values, The views expressed by contributors do not Europe must unite. necessarily reflect the policies of the Euro pean Community. The editorial contents of European Community may be quoted or 19 Recent Books reproduced without further permission, un less expressly prohibited. Permission must be obtained to reproduce illustrations, ex cept graphs and charts. Due acknowledg 20 Publications Available ment to the European Community and credit to the author of any signed article are requested. COVER: Reporters question Commission President Franco Maria Malfatti after the September 13 Council meeting at which the Six developed a joint position on international A copy of this material is flied with the Department of Justice where, under the monetary reform. Foreign Agents Registration Act of 1938, as amended, the required registration state ment of the European Community Informa tion Office, 2100 M Street, N. W., Suite 707, Washington, D. C. 20037, as an agent of the Commission of the European Communi ties, Brussels, is available tor public in spection. The European Community Infor mation Office is the publisher of this ma terial. Registration does not indicate ap proval of the contents of this material by the United States Government. ~. , .. communitY News The Council said that the current situa common Market tion in which two member countries' cur Floating currency Rule rencies are floating has not caused market commission Protests disturbances. Nevertheless, the Council lor customs OUicers expressed the fear that if allowed to con How do officials work out the customs value tinue too long, the system of adjusting price of a Japanese camera while the yen floats? NEP Tax Credit differences at the border could eventually The Commission has passed a regulation The President of the Commission of the lead to difficulties in external as well as in to erase uncertainties about the value of European Communities, Franco Maria Mal ternal trade. fatti on October 6 delivered a "note verbale" imports when a country's currency fluctu to Ambassador J. Robert Schaetzel, chief of ates outside the limits set by the Interna the US Mission to the European Commu tional Monetary Fund. Officials are to use nities, protesting the tax credit bill and spe the most recent rate and the most repre cial tax treatment for Domestic International sentative selling rate in the member country Sales Corporations (DISC). where the customs value is being assessed. The Commission expressed the Commu nity's concern "over the discriminatory as pects of the tax credit bill and the export President MallaUi on subsidy effect which would result from granting a favorable tax status to DISC com Parliamentary Power panies." The Community believes that the The power of the purse is not sufficient to tax credit bill, limiting investment tax credit convert the European Parliament from a to goods of American origin, is incompatible basically consultative organization into a with the General Agreement on Tariffs and To dramatize their demand lor higher prices, Belgian viable legislative body, contends Commis Trade and would jeopardize benefits of tariff farmers in Louvain destroyed their cabbage crop. sion President Franco Maria Malfatti. concessions already granted by the United Under the circumstances, the Council de As a prelude to rectifying this situation, States. The retroactive provisions of the bill cided to put off decisions on prices for the President Malfatti told the Parliament's will immediately affect Community exports 1972/73 marketing year so that the elements Political Committee, on October 6, that he of equipment which amounted to $1 billion necessary for defining a fair policy on farm had appointed a panel of experts to study in 1970. income could be considered. It plans to the Parliament's role in the Community. The The effect of the measure, together with keep studying the current economic plight panel, consisting of independent constitu the surtax and the modifications in the ex of farmers and may ask the Commission to tional lawyers from both member and appli change rates of certain currencies, would make new price proposals after the Euro cant countries, will have six months to com practically paralyze Community exports of pean Parliament gives its opinion, at its plete its study. machinery to the United States. November 18-20 session. The panel will be asked to examine the DISC, an Export Subsidy problems arising from an envisaged Of the DISC draft bill, the Commission com strengthening of the Parliament's control mented that it would "artificially favor ex Rising concern over over an autonomous Community budget ports" by lowering manufacturing costs (hoped for by 1978). The questions to be through "very considerable exemptions us Economic Measures considered include what form the control from direct taxes on profits. This exemption The consequences of the US economic and should take, what other legislative powers would be incompatible with US obligations monetary measures in the social field were the Parliament should assume, and how they under GATT in the area of export subsidies one of the main topics of discussion during will affect its relationship with the other and "would entail the risk of serious dis the third meeting of the European Com Community institutions. The suggestions turbances in international competition." munity's Standing Committee on Employ should be the basis for a Commission report The Community reserved "the right to ment, on October 5. to the Parliament next spring. adopt measures to safeguard its legitimate The Committee, which was founded last interests, should the occasion arise." In the year to involve both labor and management meantime, it appealed to the US Govern in the process of formulating proposals, met competition Violation ment to reexamine both bills, "particularly in Brussels under the chairmanship of Carlo in the light of their unfavorable effects on Donat Catlin, Minister of Labor and National costs sugar Firm $4000 international trade and the dangers of a Insurance of Italy. Belgium's leading sugar refiner, S.A. Raf chain reaction they might provoke." Commissioner Albert Coppe reported to finerie Tirlemontoise, has been fined $4,000 the Committee on possible repercussions of for failing to give the Commission of the the US monetary and trade crisis on employ European Communities adequate informa Farm Market Shaken bY ment in the Community. These measures, tion on its trade practices, it was announced resulting in higher competitiveness of US in Brussels on September 16. Monetary Disorders products on the world market, could reduce The Communities' competition rules allow The European Communities Council of Min industrial employment by as much as 1 per the Commission to impose fines of up to isters, meeting in Brussels on September cent (300,000 jobs), Mr. Coppe said. He $5,000 on companies giving false or inade 27-28, reaffirmed the principles on which the stressed international economic interde quate information. Tirlemont, although en common farm policy is based but proposed pendence and called on Europeans to help titled to contest the Commission's decision no solutions to end the disunity created by solve international monetary problems in a before the Community Court of Justice in the present monetary disturbances. spirit of "world solidarity." Luxembourg, has decided not to do so. 3 termed three elements "necessary and in Uncertainty in Trade Barre cans tor separable" if fixed exchange rates were to Ralf Dahrendorf, Commission member in be established between member countries: charge of external trade, termed the trade realistic exchange rates; some flexibility to aspects of the US decisions as disconcert Dollar Devaluation ward third countries; and effective instru ing as the current monetary difficulties. Mr. Raymond Barre, Vice President of the Euro ments to control speculative capital flows. Dahrendorf urged the Community not to re pean Communities Commission, recently de Mario Ferrari-Aggradi, president of the act prematurely to the 10 per cent surcharge fended Community policy statements calling Council of Ministers, also spoke before the on exports to the United States, in order to for devaluation of the dollar. He said that Parliament and stressed the need for full avoid a trade war. He said that the Com the United States was morally, politically, European participation in solving current munity must pursue efforts to coordinate its and economically obligated to take action.

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