THE EUROPEAN COUNCIL

ROME 2 DECEMBER 1975

Documents in the dossier include:

The European Council in Includes preparatory work, conclusions, follow up statements Reproduced from the Bulletin of the European Communities, No. , 1975

European Community Members to Issue EC Citizens a HEuropean Passport European Community Background Information No. 41/1975 European Comm urn ty Information S ervi ce Washington DC

Declaration of Rambouillet 17 Department of State Bulletin, , 1975 . The European Council in Rome

European Council

Recognizing the need for an overall approach to 1101. The European Council, consisting of the Heads of Government of the Nine Member the internal problems involved in achieving Eur- States met in Rome on 1 and 2 December. The opean unity and the external problems facing Ministers for Foreign Affairs and the Commis- Europe, the Heads of Government consider it es- consistency sion were also present. sential to ensure progress and overall in the activities of the Communities and in the Decisions were reached, the most important of work on political cooperation. which concerned the Community s representation by one delegation at the North -South Confer- In practical terms, and to attain these objectives ence, establishment of May-June 1978 as the the Paris communique indicated: date for election to the European Parliament, is- The Heads of Government have therefore decid- sue of a uniform European passport from 1978, ed to meet, accompanied by the Ministers of For- the policy aspect of Community financing, and eign Affairs, three times a year and, whenever the controls to be applied in that area. The Coun- necessary, in the Council of the Communities cil also took a hard look at the Community and in the context of political cooperation. economic and social situation (with the Ram- bouillet Summit 1 and the Brussels Tripartite Con- The administrative secretariat will be provided for ference2 in mind) and European Union (state- in an appropriate manner with due regard for ex- ment of Mr Tindemans, the Belgian Premier). All isting practices and procedures. these matters were covered in a summary of con- In order to ensure consistency in Community ac- clusions issued by the Chair after the Rome tivities and continuity of work, the Ministers of meeting. Foreign Affairs, meeting in the Council of the Community, will act as initiators and coordina- tors. They may hold political cooperation meet- ings at the same time. European Council These arrangements do not in any way effect the Summit Meetings rules and procedures laid down in the Treaties or the provisions on political cooperation in the Luxembourg and Copenhagen Reports. At the 1102. The meeting which has just ended is the third since the deliberations of the Heads of Gov- various meetings referred to in the preceding para- graphs the Commission will exercise the pow- ernment when they assembled in Paris on 9 and 10 .3 Glancing further back , the ers vested in it and play the part assigned to it first year of this new practice highlights its spe- by the above texts. cific features and originality. What was soon to be known as the European ac- Unlike the Summits at The Hague (1 and 2 De- Council' , was born. Since then it has met in cember 1969), in Paris (19 and 20 ) cordance with the terms adopted by the Heads of and Copenhagen (14 and 15 December 1974), and Government, in Dublin (10 and 11 March), Brus- lately in (1 and again unlike the meeting of Heads of Govern- sels (16 and 17 July) and Rome 2 December). ment in December 1974, which was new in style , the establishment of what was soon term- ed the ' European Council' was a response to 1 The clear-cut problems. full text of the Rambouillet Declaration is reproduced in Part 3: Documentation. The Communique issued in Paris on 10 Decem- Points 1201 to 1205. Bull. EC 12- 1974, point 1104. ber spelt these out:

Bull. EC 11-1975 European Council European Council

The Rome Meeting The results

1103. The European Council met in the Palazzo 1104. The Ministers' decisions and discussions Barberini, which dates back to the XVIIIth cen- were covered in a ' summary of conclusions tury. It was chaired by Mr Aldo Moro, President drawn up on the authority of the Chairman. of the Council , Italy, and Chairman of the Eur- There follows the published text: opean Council. The other eight Heads of Gov- ernments were all present: Mr Leo Tindemans (Belgium), Mr Anker J0rgensen (Denmark), Mr The economic and social situation Helmut Schmidt (Federal Republic of Germany), Mr Giscard d'Estaing (), Mr Liam Cos- The European Council discussed the develop- grave (Ireland), Mr Gaston Thorn (Luxembourg), ment of the economic and social situation in the Mr Joop den Uyl (Netherlands), Mr Harold Wil- Community and again stressed the need for close son (United Kingdom). All were assisted by their co-ordination to be maintained between the econ- Foreign Ministers, except for Denmark whose oinic policies of the Member States in order to Minister for External Economic Relations was in consolidate the economic recovery which seems attendance, Belgium (Mr Van Elslande was ab- to have begun and to improve the present level sent) and Luxembourg, where Mr Thorn covered of employment. both functions. In the case of Belgium and Lux- The European Council confirms the broad lines embourg, Head of Government was accom- the which emerged at the July meeting in Brussels panied by a ~enior official. The Commission was and which were echoed in the declaration issued Vice- Presi- represented by President Ortoli and after the Rambouillet Summit , concerning the dent Haferkamp. desirability of closer international co-operation The European Council met in restricted session and of constructive dialogue among all the the national or Community officials were not pre- countries concerned to overcome current econ- sent at their discussions. At one point the Heads omic problems. of Government called in the President of the The European Council has noted with satisfac- Commission. tion the follow-up to the Tripartite Conference The Council first talked of economic and social held in Brussels on 18 November and the deci- problems: the conclusions to be drawn from the sion to instruct the Commission of the European Rambouillet Summit, the Community s economic Communities , in contact with both sides of in- and social situation and the Brussels Tripartite dustry, to study the main problems discussed Conference. It then considered the election of and to prepare a report with '"a view to a future Parliament , the ' European Passport' , budgetary meeting of that Conference. matters, and European Union. It devoted most of its second day to the Conference on International Economic Cooperation (North-South). Community budget and financing The Commission played an active part in the dis- The European Council carried out a thorough cussions preparing conclusions. This was , and in examination of the problems connected with the particularly so in regard to the North-South dia- supervision of Community expenditure and the logue and the policy commit- common energy Community s budget policy. ments where the final decision for single Com- munity representation was taken on the strength The Council agreed on the need for more effec- of a text proposed by President Ortoli. tive financial control over Community expendi-

Bull. EC 11- 1975 European Council European Council

ture and stated that it was in favour of the sug- The European Council noted the Commission gestions made by the Heads of Government of intention to submit to the Council proposals con- the United Kingdom , the Federal Republic of cerning the use of the European unit of account Germany and Ireland and the proposals of the in the Community budget.' Commission being examined expeditiously. The President of the Council and the President of the Commission were invited to make contact Elections to the European Parliament with the President of the European Parliament with a view to examining the role which that In- The European Council is agreed that elections to stitution might play in controlling Community the European Parliament shall take place on a expenditure by means of a Committee or Sub- single date in May or June 1978. Committee. Any country which at that date is unable to hold The Heads of Government agreed to make every direct elections shall be allowed to appoint its re- effort to ensure the early completion of the pro- presentatives from amongst the elected members cedure for the ratification of the Treaty setting up of its national parliament. a European Court of Auditors signed on 22 July The European Council noted Mr Wilson s state- last in Brussels, with a view to enabling the ment that the United Kingdom Government re- Court to commence activities during 1976. quired a further period for internal consultations before adopting a final position The European Council noted with regarding the date satisfaction fixed, and the conditions the information communicated by the President set by Mr J0rgensen for direct elections to the European Parliament in of the Commission regarding the strengthening Denmark. which had taken place to date in the powers of the Member of the Commission responsible for The European Council instructed the Council of the budget without prejudice, however, to the Ministers to continue examination of the pro- principle of the collective responsibility of the blems encountered and to submit a report which Commission as laid down in the Treaties. will enable the text of the Convention on elec- tions to the European Parliament to be finalized With reference to the agreement reached at Villa at the next European Council.' Marlia and formally adopted by the Council meeting in Brussels on 5 and 6 November re- garding the annual joint meeting of Ministers for Passport Union Foreign Affairs and Ministers for Finance carry out an overall assessment of Community The European Council is agreed on the intro- budget problems , the European Council considers duction of a uniform passport which may that discussions at such meetings should concen- issued as from 1978. trate on general Community policy, ensure great- er consistency as regards policies to be followed To that end , the European Council asks the and budget decisions and allow better distribution Council (Ministers for Foreign Affairs) to resolve all outstanding questions in of Community resources to be achieved by this area. means of the gradual introduction of multiannual The European Council also asks the expenditure forecasts. The Council discussion relating to (Ministers for Foreign Affairs) to continue work next year should take place on the basis of a on the abolition of frontier controls and on Commissiol). communication the , before the end of harmonization of conditions of entry into and April. abode in the Member States.

Bull. EC 11- 1975 European Council European Council

Communication from Mr Tindemans Community co-ordination procedure that a mem- on the accomplishment of his mission ber of the Communities' delegation be invited by the Chair to comment on specific questions in The European Council heard a statement by Mr the context of the mandate. These statements Tindemans, Prime Minister of Belgium on the shall not conflict with the agreed Community accomplishment of his mission of preparing a re- position. port on European Union. As agreed, a copy of (e) As the dialogue proceeds , the mandate will this report will be sent to all Governments before be further developed in accordance with the the end of the year. Community procedure.

Conference on international Other business economic cooperation The European Council adopted a proposal by the I. Basic problems Prime Minister of the United Kingdom that Community Ministers for the Interior (or Minis- The Commission will submit proposals and the ters with similar responsibilities) should meet to Council decide as soon as possible on appropriate discuss matters coming within their competence mechanisms to protect existing sources and en- in particular with regard to law and order. sure the development of alternative sources of Community energy, on reasonable economic con- The European Council also discussed the pro- ditions and also to encourage conservation in the blems posed by the shortage of oil and steps to use of energy. be taken in that connection. It also considered the compilation of the list of industrialized coun- tries who should be invited to attend the North- II. Procedure South Conference.

(a) The Community will be represented by a single delegation at the conference on interna- tional economic co-operation. Community reactions

(b) The Presidents of the Council and the Com- mission will act as spokesman for the Commu- 1105. The results of the Rome meeting were nity. the subject of largely favourable comment. The During the ministerial conference, the Chairman initial Community reactions were as follows: of the C9mmunity delegation will be able to in- vite the representatives of two Member States to Commission submit further comments in the light of their ex- perience and in accordance with the mandate ad- opted. 1106. Following the Commission meeting of December, the Spokesman declared in substance (c) In each commission , the spokesmen for the the following day: Community shall be assisted by a Community delegation comprising representatives of the President Ortoli and Vice-President Haferkamp Member States. who represented the Commission in Rome, sum- marized at the Commission meeting the results (d) It may be agreed in the framework of the obtained and the course of the Council's work.

Bull. EC 11- 1975 European Council European Council

The Commission was pleased that three big ad- The commitment by seven Heads of State or vances had been secured: Government of the Europe~n Community to dir- ect e~ections to the European Parliament in direct election to Parliament , which was (i) May-June 1978 is unquestionably one of the highly significant politically and an expression of positive results of the European Council in resolve to push on the construc- most the unanimous Rome. tion of Europe; The two (ii) in keeping with the Commission s proposals, countries not yet committed to that date the European Council agreed to accord budget is- do not oppose the principle of European elec- sues their true political stature; tions. It is quite probable therefore, that they will come round to the same position by 1978. This (iii) the Community single representation seems all the more likely in that these two coun- Paris at the Conference on International Econ- tries have a great parliamentary tradition and omic Cooperation of the utmost political , was have consistently pressed for greater democracy and institutional importance; it strengthened the in the Communities. Community authority and credibility, and its determination to win through to a common en- The European Parliament continues to attach ergy policy. great importance to the organization of European elections on the same date in all Community Yesterday the Commission and today the Energy countries , for political and psychological reasons. Committee started to appraise moves in that di- rection , bearing in mind the next critical dates At all events, the European Council' s commit- (Council meeting of 9 December arid lEA meet- ment to direct elections must be the signal for a ing on 18 and 19 December). general mobilization of political forces and public opinion in all the countries concerned. There is a Spinelli said: Mr considerable amount of preparatory w.ork to be In deciding that elections to the European Par- done if these elections are to be held in time. liament will take place on a single date in 1978 The " count -down starts today! Heads of Government, seventeen years after the The Council of Ministers of the European Com- Treaty of , have finally the Rome took effect munity must now adopt the draft convention , waged on a wide pop- yielded in the long battle submitted to it by the European Parliament. ular front , to democratize the Community. The decision on single representation for the Eur- The elections can be a milestone of Community opean Community at the North-South dialogue , by politically revitalizing integra- history because is, of course, the other encouraging feature of tion, they will help to break up the collusion of this European Council. bureaucracies and finally involve the citizens in the construction of Europe. This decision averts a grave threat to Commun- ity solidarity in a field which is vital to Europe future. Finally the creation of a European Passport in European Parliament 1978, year of the elections by universal suffrage, should be welcomed. These two measures on dif- will create a l1a7. Mr Georges Spenale, President of the Eur- ferent but complementary fronts, opean Parliament, made the following statement stronger sense of European identity. on the outcome of the European Council meet- Ing:

Bull. EC 11-1975 ~ )

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EUROPEAN COMMUNITY INFORMATION SERVICE 2100 M Street NW, Washington DC 20037 Telephone (202) 872-8350 New York Office: 277 Park Avenue, New York NY 10017 Telephone (212) 371-3804

BAC KGROUND NOTE

No 0 4 / 1 975

December 4, 1975

EUROPEAN COMMUNITY MEfVIBERS TO ISSUE EC CITIZENS A "EUROPEAN" PASSPORT

American col lectors of passport stamps wi 1 1 soon have to find a new hobby -- or travel to other parts of the world than the European Communityo

The Commun i ty I S nine membe r count r i es have dec i ded to rep ace nat i ona passports with a single type of European passport by 1978 as the fi rst step toward a passport union~ Once this union has been completed , citizens of the N i ne " wi 1 1 be ab to t rave 1 f rom one end of the Commun i ty to the othe r wi thout passing through customs0 For Americans , it wi l mean a single customs check on entering the fi rst Community country visited and one on leaving the last -- two passport stamps instead of 14~ (Belgium , the Netherlands , and Luxembourg have a 1 ready ended passport checks

European passports could be in use soon, because this change needs legislation only in GermanY0 Other parts of the passport union wi 1 1 take longer to work out, because they wi l take changes in national laws setting conditions of entry, length of stay, and checks of luggage, currency, and carso Eventual 1y~ the Nine wi 1 1 have to negotiate agreements with non- member countries to treat every holder of a European passport the same, regardless of national it

The passport dec is i on was made at a meet i ng of the Commun i tv members I heads of State or Government, foreign ministers , and EC officials in Rome on -2" The group, known as the II European Counei 1 " also discussed

the election of the Community s Assembly, known as the " European Parl iament, by d i reG t un i ve rsa 1 surf rage the Commun i tv I S econom i c and soc i a 1 cond i t ion the Community s budget and financial arrangements the Paris Conference on International Economic Cooperat ion ~ II ~ a re po r t, due b the end 0 t his me nth , 0 n b u i 1 din 9 a f u 1 1 Eu ropean Un i on

This material is prepared , issued, and circulated by the European Community Information Service, 2100 M Street , NW , Suite 707, Washington DC 20037 which is registered under ttle Foreign Agents Registration Act as an agent of the Commission of the European Communities , Brussels , Belgium. This material is filed with the Department of Justice where the required registration statement is available for public inspection. Registration does not indicate approval of the contents of the material by the United States Government. .... 2

What is the European Counci

The European Counc i 1 was born at the December 1974 Summi t of- the Nine when i ngs the heads of Government dec i ded that more frequent but ess forma 1 meet dec i s i on-mak i ng at the hi ghes t po 1 i t i ca eve 1 cou 1 d speed up the Commun i ty ' s process. The Community s usual decision-making process -- where the Commission proposes and the Counc i 1 enacts -- often bogs down in techn i ca 1 i ties and ba rga i n i n9 .

rect E ec t ions to the Pa rl i ament that the member The fi rs t 1 i ne of the Common Ma rkets found i ng treaty says union among countries are determined to lay the foundation of an ever closer the peoples of Europe. " The di rect election of representatives to the European Parl iament wi 1 1 be a cornerstone of that Union. It wi 1 1 give the peoples of Europe for the fi rst time a di rect say in the way the Community is run. The European Parl iament now has 198 members appointed by and from the national legislatures. This procedure was, however, always considered temporary. The Parl iament itself was to and did make proposals for the election of its members did the Pa r1 i ament by d i feet un i versa 1 suffrage. On y on Janua ry 14, 1975, h~ever, adopt a new raft convent i on for di rect el ect tons tak i ng into account the th ree on must now new members (Oenma rk, I re 1 and , and the Un i ted Ki ngdom) Th is convent i ana be unan i mous 1 y adopted by the EC Counc i 1 of M in is ters and rat i f i ed by the nat i eg i s atu res i on The European Counc i 1 smoothed the way for camp et i on of the convent secu ring the Nine I S ag reement on two deta i 1 s

that elections wi l be held on a single date between May and June 1978 that unti 1 the United Kingdom and Denmark work out internal arrangements, those countries can continue to appoint members of the European Parl iamente d office The di rectly elected Parl iament wi 1 1 have 355 members who sti 1 1 hol fo r five yea r s .

The Commun i ty I S Econom i c and Sac i a 1 Cond i t ion The The Eu ropean Counc i 1 met dur i ng Eu rope I S wors t recess ion since the wa r ~ Community s unemployed number 5, 000, 000, more than 4~ 5 per cent of the labor force~ fore i A 1 mas t a th i rd of the unemp eyed have jus t eft schoo 1 $ Thousands of. re work i n9 workers have returned to the i r home count r i es, and 1 500, 000 workers a short time~ These conditions pose a threat to the Community s social stabil itY$

To deal with this situation, the European Counci l agreed that member countries had no choice but the closest consultation over economic pol icy both within the Community and with the rest of the worldo

c t res u 1 t 5 0 f 1 a 5 t mo nth' The 0 U n c i 1 a 1 s 0 ex pre sse d 5 a tis f a. ion wit h the Tripart ite Conference" organized by the EC Commission and attended by representatives Commission to hold of labor, management, and government The conference asked the more such conferences so that al l parties involved in industry could explore current 1 abor , sac i a 1 ~ and economi c cond it i ens , . " - . '-.

3 -

The Commun i ty I Budget and Finane i ng

This year the Community has a budget of $783, 125, 000, a figure 2 per cent of I tota the membe rs 1 na t i ana 1 budgets Revenues came from cus toms dut i es, agricultural levies , and a ta~ pn coal and steel productiono The deficit was made up by contributions from member states, based on the size of thei r economieso

During recessions, countries ike individuals , are especial ly budget conscious , and the Common Market members are no exceptiono The European Counci discussed at ength ways of see i ng that Commun i tv funds are properl y handl ed and we 1 1 spent

The Counc i 1 sa i d it wou 1 d 1 i ke a number of budget tighten i ng proposa 1 5 studied soon and asked the EC Commission and the Counci l to get the Parl iamentl ideas on how the latter s budgetary powers could be expanded The Counci l also ag reed

to speed up the rat fi cat i on process for the Treaty creat i ng a European Court of Audit~ signed on July to h old j 0 i n t an n u 1 me tin 9 5 0 f the i r fin a nee and for e i 9 n m i n i s t e r 5 for a general review of the Community 1 5 budget to improve al location of funds between d i ffe rent po 1 i cy areas Eventua 1 y, these meet i ngs wou 1 d ead to budget forecas eve r a 1 time s ear

The II North-South" Dialogue

The European Ccunci 1 cleared up one cloud that had hung over the future of the Conference on International Economic Cooperation, scheduled for December 16 in Paris~ The heads of State or Government agreed that the Community would be represented by a single delegation~

The Counc i 1 a so dec i ded tha t work on a common energy po icy shou 1 d be resumed as soon as possible~ It asked the Commission to make proposals for conserving ene rgy resou rces and fa r deve lop i ng new sou rces

Bu i ding the Eu r~.E~~,n Un ion The Counci l also heard an interim report by Belgian Foreign Minister Leo Tindemans on the chances for bui lding the Communi s achievements so far into a European Un ion The report , commi ss i oned at the 1973 Copenhagen Summi t, is to be camp eted th i 5 month

Preparing the report, Tindemans has talked with a wide range of pol itical labor , and business leaders and has also received the views of the Community Court of Justice ~ the European Parl iament, the Commission , and the Economic and Social Commi ttee ~ an advisory body to the Commission and the Counei 1 ~ -- 4 -

Ach i evements of Prey i ous Eu ropean Counc i 1 s

The fi rst European Counci 1 was held in Dubl in on March 10-1 Here, the last detai ls of the United Kingdom s " renegotiation" of membership conditions were worked out: budget cont r i but i on and da i ry imports f rom New lea and

The second European Coun~i l met in Brussels on July 16-17. This Counci reaffi rmed that the Community would talk about closer ties with Portugal but tha t it cou 1 d " g i ve support on l y to a democ racy of a p 1 u ra 1 i s t natu re. II also defined the Community s position for the United Nation s special session on raw materials and development last September, and welcomed s decision to establ ish official relations with . the Community.

The next European Council is scheduled for Luxembourg on March 8- 9, 19760 leaders of Maior Industrial Democracies Discuss Economic Issues

President Ford and President Valery Gi. importantly, they reaffirmed our mutual card d'Estaing of France, Chancellor Helmut confidence in a sustained and full recovery Schmidt of the Federal Republic of Germany, from the deepest recession since the 1930' Prime, Minister Aldo M oro Italy, Prime Perhaps our most important accomplish- Minister Takeo Miki of Japan and Prime ment over the past several days has been Minister Harold Wilson 01 the United King- our recognition that the objective of sus- do'm 'met at the Chatea~t de Rambouillet near tained, stable economic growth will be facili- leaders of Pa1"is November 15-17. Follo~ving are re- ta ted by our common efforts. As marks 'made by President Ford at the con- major democratic nations, we reached sub- number of clus'ion the meeting, the text the stantial agreement on a issues Declaration of Rambouillet issued on Novem- concerning monetary policy, trade, energy, ber and opening remarks from a news and our relations with the developing world conference held by Secretary Kissinger and as outlined in our joint declaration. Secretary of the Treasury William E. Sim01~ Over the past three days, in this beautiful aboard Air Force One on November 17 setting, we have found a new spirit, a spirit coopera tion route to Washington. of and confidence stemming from a deeper understanding of our common destiny and our joint conviction that free REMARKS BY PRESIDENT FORD peoples can master their future. As a result of the work that we have Weekly Compilation of Presidential Documents dated Nov. started, the people of our countries can look Mr. President: I wish to express my ap- forward to more jobs, less inflation and a preciation for the gracious hos'pitality of greater sense of economic security. you and the French Government and the We conclude this conference with a sense French people. My appreciation also goes to of determination to carry forward this work my colleagues for the spirit of good will, the which has been so promisingly begun. spirit of friendship, which they have dem- onstrated during this meeting. I t has been a highly successful meeting TEXT OF D.ECLARA TION OF RAMBOUILlET ill every respect. The Heads of States and Governments of In our sessions, we have covered the range France, Federal Republic of Germany, Italy, of economic issues of concern to the indus- Japan, the United Kingdom of Great Britain trialized world and challenging our demo- and Northern Ireland and the U ni ted States cra tic societies. of America the Chateau de Ram- These meetings have been rewarding in met in bouillet from 15th to 17th of November a number of important ways. They have 1975, and agreed to declare as follows: deepened our understanding and apprecia- tion of our mutual economic interdepend- 1. In these three days we held a searching ence. They have enabled us to harmonize and produ.ctive exchange of views on the our views on key issues, and they have world economic situation on economic prob- strengthened our determination to solve the lems common to our countries, on their problems that we confront. Finally, and most human, social and political implications, and

December 8, 1915 805 . .

on plans for resolving them. pansion proceed, we must seek to restore 2. We came together because of shared growth in the volume of world trade. Growth beliefs .and shared responsibilities. We are and price stability will be fostered by main- each responsible for the government of an tenance of an open trading system. In a open, democratic society, dedicated to indi- period where pressures are developing for a vidual liberty and social advancement. Our return to protectionism, it is essential for success will strengthen, indeed is essential the main trading nations to confirm their to democratic societies everywhere. W e are commitment to the principles of the OECD each res'ponsible for assuring the prosperity (Organization for Economic Cooperation and of a major industrial economy. The growth Development) pledge and to avoid resorting and stability of our economies will help the to measures by which they could try to solve entire industrial world and developing coun- their problems at the expense of others, tries to prosper. wi th damaging consequences in the eco- 3. assure in a world of To growing inter- nomic, social and political fields. There is dependence the success of the obj ectives set responsibility on all countries especially out in this declaration, we intend to play our those with strong balance of payments own full part posi- and strengthen our efforts for tions and on those with current deficits to closer international cooperation and con- pursue policies which will permit the expan- structive dialogue among all countries, tran- sion of world trade to their mutual advan- scending differences in stages of economic tage. development, degrees of resource endow- 9. We believe that the multilateral trade men t and political and social systems. llegotiations should be accelerated. In ac- 4. The industrial democracies are deter- cordance with the principles agreed in the mined to overcome high unemployment, con- Tokyo Declaration they should aim tinuing inflation and serious energy prob- achieving substantial tariff cuts, even elimi- lems. The purpose of our meeting was nating tariffs in some areas, at significantly review our progress , identify more clearly expanding agricultural trade and at reduc- the problems that we must overcome in the ing non-tariff measures. They should seek future, and course that to set a we will to achieve the maximum possible level of follow in the period ahead. trad e Ii beraliza tion therefrom. We propose 5. The most urgent task is to assure the as our goal completion of the negotia tions recovery of our economies and to reduce the in 1977. waste of human resources involved in un- 10. W e look to an orderly and fruitful in- ployment. In em. consolidating the recovery crease in our economic relations with social- it is essential to avoid unleashing additional ist countries as an important element in inflationary forces which would threaten its progress in detente and in world economic success. The objective must be growth that growth. is steady and lasting. In this way, consumer 11. We will also intensify our efforts to and business confidence will be restored. achieve a prompt conclusion of the negotia- 6. We are confident that our present poli- tions concerning export credits. cies are compatible and complementary and 12. With regard to monetary problems, tha t recovery is under way. Nevertheless we affirm our intention to work for greater recognize the we need for vigilance and stability. This involves efforts to restore adaptabili ty in our policies. We will not greater stability in underlying economic and allow the recovery to falter. We will not ac- financial condi tions in the world economy. cept another outburst of inflation. At the same time, our monetary authorities 7. We also concentrated on the need for will act to counter disorderly market condi- new efforts in the areas of world trade tions, or erratic fluctuations, in exchange monetary matters and raw materials, includ- rates. We welcome the rapprochement lng energy" reached at the request of many other coun- 8. As domestic recovery and economic ex- tries, between the views of the U.S. and

806 Depa rtment of State Bu lIeti n the France on the need for stability that the 16. We welcome the convening of Co- reform of the international monetary sys- Conference on International Economic tem must promote. This rapprochement will operation scheduled for December 16. spirit facilitate agreement through the IMF (In- will conduct this dialogue in a positive ternational Monetary Fund) at the next to assure that the interests of all concerned session of the Interim Committee in Jamaica are protected and advanced. We believe that on the outstanding issues of international industrialized and developing countries alike mo11etary reform. have a critical stake in the future suc~ess 13. A co-operative relationship and im- of the world economy and in the co-operative must be proved understanding between the develop- political relationshirps on which it ing nations and the industrial world based. fundamental to the prosperity of each. Sus- 17. We intend to intensify our cooperatiol1 tained growth in our economies is necessary on all these pro blems in the framework of all the to growth in developing countries: and their existing institutions as well as in growth contributes significantly to health in relevant international organizations. our own economies. 14. The present large deficits in the cur- CONFERENCE rent accounts of the developing countries OPENING REMARKS FROM NEWS represent a critical problem for them and OF SECRETARIES KISSINGER AND SIMON also for the rest of the world. This must be dealt with in a number of complementary Secretary Kissinger ways. Recent proposals in several interna- The overall purpose of the meeting was to already improved the tional meetings have bring together the leaders of the industrial between de- tmosphere of the discussion democracies at a time when their economies early veloped and developing countries. But were in various states of recession. practical action is needed to assist the de- When it was proposed, it was suggested veloping countries. Accordingly, we will play these leaders ought to meet to give and other appro- that our part, through the IMF confidence to their peoples and to convey priate international fora, in making urgent that they were ill arrangements their peoples the sense improvements in international control of their future and were not simply stabilization of the export earnings for the waiting for blind forces to play themselves of developing countries and in measures out. assist them in financing their deficits. In this So we thought it was a matter of great' con text, should be given to the poor- priority importance; one, because for two years est developing countries. haye been maintaining that the political and economic growth clearly 15. World is economic cohesion of the industrial democ- vailabili ty linked to the increasing a racies was central to the structure of the secure energy sources. We are determined to non-Communist world; secondly, because we economies the energy sources needed for our believed that the interdependence of these for their growth. Our common interests re- economies makes isolated solutions impos- quire that we continue to cooperate in order sible; and thirdly, because we ' believed that imported to reduce our dependence on there were a number of concrete issues on energy through conservation and the de- which work had to begin and in which com- velopment of alternative sources. Through mon action was im.portant. these measures as well as international co- We spent a great amount of effort within operation between producer and consumer our government to prepare for this meeting, long term inter- countries, responding to the and there are always many stories when ests of both, we shall spare no effort in order there are di5agreements in the government; to ensure more balanced conditions and a harmonious and steady development in the Text from press release 572, which also includes world energy market. questions and answers.

December 8, 1915 807 but this has been an unusual occasion , an recession was psychological, had the sense unusual way in which all the departments that a consensus emerged that this confi- working together worked out common posi- dence that developed in our tions, ability to handle common philosophies, and achieved the economic problems was a very major fac- the basic proposals that were put before the tor. In fact, the confidence of the leaders other leaders. this process was shown by the fact that When this conference was called, I think they would talk about general principles and it is safe to say that some of our friends then turned over the drafting to either Min- wanted to use it as an occasion to blame us, isters or experts and that the or at least to imply that leaders only their economic diffi- spen t about an hour on the declaration. At culties could be solved primarily by Ameri- first we didn can want any declaration because efforts, and others may have had the we were afraid we would spend our whole idea that, especially in the monetary field time drafting it; and it didn t turn out that it could be used to bring about rapid solu- way, and that was important. tions in which the heads of government In the field of trade, there was an overruled the agree- long negotiations that had ment, first, that the negotiations on the gone on. multilateral trade negotiations should But as the preparation developed , I think completed next year; secondly, a a more sober spirit grew commit- also, and one of our ment by all of the countries there to bring big themes was that economic recovery was about a substantial reduction of trade meaningless if bar- it started another spurt of riers, including in the agricultural field and inflation and that what we had to aim for no attempt to hide behind Community man- was stable growth. dates or other obstacles. The second theme we had to get across There was also an agreement to accel- that the American economy was doing well erate or to foster the negotiations concern- and that therefore the concerns of other ing export credits. Bill will talk about the coun tries tha t our recovery was too slow agreemen ts in the monetary field-which put for their own was unj ustified. an end to a debate of years about the na- Thirdly, we had in a number of areas, ture of the floating system and the specific ideas on how relation the interdependence of between floating and stability, which should these countries ~ould be carried out-in the end in January in an field of trade, irl the agreement that should field of economic rela- at least put the field of international finance tions with the Socialist countries, in the on a more stable basis than it has been in . a field of monetary affairs, in the field of long time. energy, and in the field of development. In the field of energy, there has been an The discussions took place in a really un- agreement to cooperate closely or usually harmonious spirit. actively The fears which on the alternative sources and on conserva- some of us had that the others would bring tion and I believe this pressure on us will show up in the to accelerate what we think program of the International Energy is a well-conceived economic program Agen- proved cy, which is in the process of being unfounded, and after the negoti- President made his ted and which we hope to conclude by extensive intervention of the first day ex- December plaining our 15. economic program, the other In the field of development countries substantially accepted we identified this and the balance-of-payments deficits of the indeed, seemed to be appreciative of it. de- veloping countries, or their current account I think this was a very important event deficits, as one of the major problems on because it meant that they had more con- which we would work jointly, but fidence that in looking we also ahead to their own pointed out that there is a future they could count on close relationship steady growth between that and action that in the United States the is taken and since everybody wi th respect to oil prices. So we believe agreed that a substantial that percentage of the the consuming countries are in an excellent 808 Department of State Bulletin position for the beginning of the talks on (of the IMF) has obscured the deep mutual- international economic cooperation that are ity of interest to return to stable economic beginning in the middle of December. And and financial conditions in the world and we agreed to work together in all existing more orderly and stable exchange rates, and institutions. that is very significant because this instabil- To sum up, this unusual meeting of the ity that we have had contributed to as well heads of government of the countries that as resulted from tremendous institutional between them produce 70 percent of the financial strains. world trade represented a commitment to Also, the instability created great prob- the conception that our economic problems lems for many of the countries in the world were long term, that there were no quick in taking care of the erratic price move- fixes to them, that they required a steady men ts and setting economic policies and re- cooperative effort, that their political rela- storing stable growth in their own econo- tionship affected their economic rela tion- m! es. shi p, and that their economic rela tionshi p in Now, having said this, because one must turn assisted their political cooperation. look at the fundamental cause of the prob- And so the free countries vindicated the lem before we can begin to look for any of concept of their interdependence and laid the solutions, which is important, it has been out a program and a method for cooperation clear that the French and the United States which we hope will accelerate the recovery share some fundamental agreements on the of all of the peoples as well as their coopera- monetary system; there is no doubt about tion with the less developed countries for that. We both agree that the diversity of the benefit of everybody. financial arrangements-the floating system, But I think Bill ought to explain the if you will-has served us well. Under the monetary agreement because that is per- present circumstances, it is actually neces- haps the single most significant thing that sary to take care of the stresses and the happened there. strains that have been brought about by the severe inflation, recession, and of course the extraordinary oil increase. Secretary Simon So having identified the cause~, we thel1 There is no doubt that it was a significant must set about in curing the fundamental agreement reached between the French and problems of this economic instability, and the United States which, I believe and most therefore the communique, as it said, dealt everyone believes, is going to pave the way with two aspects of the monetary issue: for agreement at the (IMF) Interim Com- one, the operational and, two, the reform of mi ttee on overall monetary reform in J anu- the. system. ary. I think that the agreements that On the operational side we have reached have reached are a fair and balanced compro- an understanding that to achieve durable mise. Neither side won nor neither side lost. and meaningful stability in the underlying Each has protected its very critical na- economic and financial conditions, we have tional interests in spirit of cooperation. to provide for mutually cooperative and con- We have sought to bring a convergence ciliatory policies among ourselves but that views, and this is important. What we are national domestic economic policies must in- trying to do is build and expand on these deed be compatible. The world economy has areas of convergence, and as we succeed in suffered from all of the ills that I have doing this, the whole world community at spokel1 about, and the underlying problem large is going to benefit from this. remains with the severe inflation and of Now, I think that the disparity of views course the recession which was caused by of the past few years between the French this inflation. and the United States in particular on vari- On exchange markets, we are going ous amendments to the articles of agreement deal with erratic movements in exchange

December 8, 1975 809 ...... rates, which of course create, again, an in- stability. Erratic movements can be defined as movements that have no underlying eco- nomic reason. Ours is not an attempt to peg any of the currency rates at artificial levels; but there are erratic movements in financial markets on occasion that are not directly attributable to fundamental economic events, and at this point intervention policies will become mutually cooperative and compatible to smooth out these unstable periods.

810 Department of State Bulletin