Committee Reports::Report No. 01 - Regional Development Fund::01 November, 1973::Report


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Committee Reports > List of Committees > Joint > 1973 > Committee on the Secondary Legislation of the European Communities > Report No. 01 - Regional Development Fund

REPORT

1. Since its appointment the Joint Committee has proceeded to review the general body of secondary legislation which comes within its Orders of Reference. While this review is continuing the Joint Committee, being of opinion that they are of fundamental importance to Ireland and should be brought to the immediate attention of both Houses, desires at this stage to report specially on the following—

(a) Proposal for a Council Regulation establishing a Regional Development Fund.

COM (73) 1170—25.7.73

(b) Draft decision by the Council on the creation of a Committee for Regional Policy.

COM (73) 1171—25.7.73

COM (73) 1218—25.7.73

2. THE JOINT COMMITTEE,

HAVING REGARD to the anxiety expressed in the Preamble to the Treaty of Rome of the European peoples “to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favoured regions” and to the terms of Article 2 of the Treaty;

HAVING REGARD to the declaration in the final communique of the Conference of Heads of State or of Government held at Paris from the 19th to the 21st October, 1972 as follows:

“The Heads of State or of Government agreed that a high priority should be given to the aim of correcting, in the Community, the structural and regional imbalances which might affect the realisation of Economic and Monetary Union.

The Heads of State or of Government invite the Commission to prepare without delay a report analysing the regional problems which arise in the enlarged Community and to put forward appropriate proposals.

From now on, they undertake to coordinate their regional policies. Desirous of directing that effort towards finding a Community solution to regional problems, they invite the Community Institutions to create a Regional Development Fund. This will be set up before 31 December, 1973, and will be financed, from the beginning of the second phase of Economic and Monetary Union, from the Community’s own resources. Intervention by the Fund in coordination with national aids should permit, progressively with the realisation of Economic and Monetary Union, the correction of the main regional imbalances in the enlarged Community, and particularly those resulting from the preponderance of agriculture and from industrial change and structural underemployment.”;

HAVING REGARD to the ideas and proposals outlined by the Commission in the “Report on the Regional Problems in the Enlarged Community” [COM (73) 550—3.5.73] with particular reference to the following:

“The Fund will have to concentrate its expenditure very largely in those regions which are the most in need in relation to the Community as a whole. In other words there must be standards to ensure that the means available to the Fund are used in a manner quite independent of any criterion of juste retour and which reflect the size and urgency of the regional problems facing the Community. The acceptance of this principle will be an important test of Community solidarity.” [Paragraph 29 (viii)of the Introduction to the Report]; and

HAVING REGARD to the present stage of development of Ireland’s economy which was acknowledged in Protocol No. 30 to the Treaty of Accession in the following terms:

“The High Contracting Parties,

desiring to settle certain special problems of concern to Ireland, and

having agreed the following provisions,

recall that the fundamental objectives of the European Economic Community include the steady improvement of the living standards and working conditions of the peoples of the Member States and the harmonious development of their economies by reducing the differences existing between the various regions and the backwardness of the less-favoured regions;

take note of the fact that the Irish Government has embarked upon the implementation of a policy of industrialization and economic development designed to align the standards of living in Ireland with those of the other European nations and to eliminate underemployment while progressively evening out regional differences in levels of development;

recognize it to be in their common interest that the objectives of this policy be so attained;

agree to recommend to this end that the Community institutions implement all the means and procedures laid down by the EEC Treaty, particularly by making adequate use of the Community resources intended for the realization of the Community’s above-mentioned objectives;

recognize in particular that, in the application of Articles 92 and 93 of the EEC Treaty, it will be necessary to take into account the objectives of economic expansion and the raising of the standard of living of the population.”

IS OF OPINION that—

(i)the Commission’s proposals for a regional policy are inconsistent with the guiding principles outlined above and represent a radical departure from what until now has been universally accepted as fundamental Community philosophy;

(ii)the proposals do not envisage the substantial transfer of resources from the developed regions of the community to the least developed ones which is essential to the balanced economic development of the Community as a whole;

(iii)the proposals do not provide a framework for the realisation of a common economic and monetary policy for the Member States by 1980;

(iv)as expenditure from the fund is to be entirely complementary to that of Member States, the proposals ignore the disparity between the resources available to those States to deal with regional imbalances and in particular the special problems of Ireland referred to in the protocol governing her accession;

(v)the proposals are inadequate in that no provision is made for the retention of a proportion of the fund to be administered by the Commission on means or projects to cater for particularly intractable regional problems or trans-border schemes, as envisaged in the guidelines submitted by the Commission on 14/15th May, 1973;

(vi)only regions and areas in which gross domestic product per head is substantially below the Community average should qualify for regional aid and that the criteria by which the list of regions is to be chosen as set out in Article 3 of the Regulation establishing a Regional Development Fund are unacceptable in that they do not advert to migration within the confines of Member States and are so loosely framed as to admit an area equal to one half of the entire Community and comprising one third of its population thereby vitiating the entire concept of a regional policy;

(vii)the financial appropriations to be provided in the Budget of the Communities in accordance with Article 2 (1) of the Regulation establishing a Regional Development Fund for the fund’s operations in each year should be sufficient to meet the fund’s contribution in respect of all qualified proposals coming forward during that year;

(viii)the rates of 15% for industrial and 30% for infrastructural projects are unnecessarily restrictive and will prove unsuitable in Irish circumstances;

(ix)the sums which the Commission suggests should be inscribed in the Budget of the Communities for 1974, 1975 and 1976 are so inadequate even having regard to the size of Ireland’s regional problems alone as to be capable of making only a marginal impact on the economic and social development of the Member States;

(x)article 3 of the Decision by the Council on the creation of a Committee for Regional policy should provide for the inclusion of representation of the social partners on the Committee and for liaison with the Economic and Social Committee and Article 5 should also provide for the taking of evidence from farming organisations;

(xi)whereas the Treaty of Rome places a solemn obligation on the Commission to propound policies which are genuinely based on Community principles and to protect the interests of smaller countries, and whereas it is more difficult for the Commission to carry out this obligation when it cannot rely on specific provisions of the Treaty but must, as in the case of the regional policy proposals, rely on the general authority of Article 235, the Governments of the Member States must ensure that the Commission retains its freedom to act in the interest of the Community as a whole.

(Signed) CHARLES J. HAUGHEY,

Chairman of the Joint Committee.

1st November, 1973.