Bulletinof the European Communities

Supplement 7/82

European Union

Reports for 1982- by the Ministers of Foreign Affairs and- by the Commission

The Commission report was also published as COM (82) 783

25 November 1982

Blank pages not reproduced: 4 and 18

EUROPEAN COMMUNITIES

Commission

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contents

Report on European Union from the Ministers of Foreign Affairsto the European Council, Copenhagen, 3-4 December 1982

Commission report on European Union to the European Council,Copenhagen, 3-4 December 1982

Report on European Unionfrom the Ministers of Foreign Affairsto the European Council

The year 1982 marked the 25th anniversary ofthe signing of the Treaties of Rome and the 30thanniversary of the entry into force of the Treatyof Paris. On the occasion of the celebration ofthe first of these anniversaries the President ofthe Council stated that 'Since first being giveninstitutional form in the European Coal andSteel Community in 1952, Europe has acquireda tangible reality... ; it has become a reality andhas reached out to encompass new fields andnew States..

.'.

Action in 1982 both in the framework of theTreaties establishing the European Communitiesand in that of political cooperation takes thesame line; it has enabled progress to be achievedin the various fields of the Union and the com~mon conception of European Union to betranslated into reality. The purpose of this reportis to recall the main results of that action. Theseresults have been marked by solidarity in theface of the challenges, both internal and exter-nal, which have confronted the Community, andthis in turn has enabled progress to be made inlaying the foundations of ever-closer union

between the peoples of Europe.

* * *

Very considerable interest was aroused amongthe peoples of the Member States as Europe wasbeing constructed. In order to maintain this in~terest, it seemed necessary to design an instru-

ment which, alongside Community and inter-governmental action, would bring this Europewhich is so little appreciated, closer to thecitizens for whom it was brought into being.With this in mind, the Member States concludedan agreement establishing a European Foun~dation 1 whose task it will be to improve mutualunderstanding among the peoples of the Euro-pean Economic Community, to promote a betterunderstanding of the European cultural heritageboth in its rich diversity and in the points it hasin common, and to foster a greater under-standing of European integration.

In furtherance of this same end, the Represen-tatives of the Governments of the MemberStates meeting within the Council adopted on 30June 1982 a supplementary resolution 2 to theresolution adopted on 23 June 1981 concerningthe adoption of a passport of uniform pattern.

In response to a request from the EuropeanCouncil at its meeting on 26 and 27 November1981, the Ministers of Foreign Affairs of theMember States of the European Community, incooperation with the Commission, began ex-amination of a joint German and Italian in~itiativeon European Union 3 and progress hasbeen made in that .examination.

1 Bull. EC 3- 1982, points 1.2.1 to 1.2.2 OJ C 179, 16. 1982.3 Bull. EC 11-1981, points 1.2. 1 to 1.2.6 and 3.4.

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Activity within the frameworkof the Treaties establishingthe European Communities

Economic and social situation

In common with all the industrialized countries,the Comtrtunity has been faced with a worryingeconomic and social situation. The recession isalso making itself felt in the growing economicdifficulties encountered by the developingcountries. These must cope with an economicrecession which began in the mid- 1970s and hassince been assuming the proportions of a worldcrisis. The short-term effects of this recessionare not hard to calculate. They are lower levelsof production, which lead in turn to lower livingstandards. The longer-term social effects arealso beginning to be felt. Unemployment is rifeand young people entering the labour market areunable to understand that the society which has'trained them does not need them. Older personswho have served society for many years sudden-ly find that they are superfluous. This situation

leads inevitably to the questioning of traditionalvalues and of the very foundations on which thesociety constructed 20 or 30 years ago is based.

In the face of this situation, the Council of

Ministers of Economic and Financial Affairsand Ministers of Labour and Social Affairs,meeting on 16 November 1982, pinpointedmeasures to deal with the various negative

aspects of the crisis. 1 These measures relate to:

. international economic and financial stability;

. convergence and economic stability withinthe Community;. investment;

. the internal market;

. industrial policy;

. young people and the labour market;

. adjustment of working time.

The Council has noted that the EuropeanMonetary System has operated smoothly overthe last three years and has made an essentialcontribution to bringing about more stable andordered exchange relations in the Community,and economic and monetary policies moregeared to achieving stability and economicdevelopment.

The Council nevertheless considers that effortsto bring about the convergence of economic

policies must be stepped up, if the aim of

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creating a zone of monetary stability in Europeis to be attained. The Council has called on theMonetary Committee and the Committee ofGovernors of Central Banks to cont~nue ex-amining any possible technical improvements tothe system.

In view of developments in the monetary situa-tion, the Ministers of Finance decided to realignthe central rates of certain currencies within theEuropean Monetary SystemJ.

The Council devoted particular attention to in-vestment policy. Having adopted in March 1982a second Decision empowering the Commissionto contract loans for the purpose of promotinginvestment within the Community, the Councilnoted on 15 November 1982 that any lastingrise in investment depended largely on animprovement in the situation and on theeconomic outlook as well as increased self~

financing.

Iron and steel

One of the worrying aspects of the socio-economic situation is the problem of those sec-tors seriously hit by the crisis, in particular ironand steel.

As regards external relations under this heading,the Council welcomes the solidarity shown byEurope when concluding the arrangement withthe United States of America and is .confidentthat its proper mutual implementation canremove the difficulties that have arisen.

As to the internal aspect, the Council gave itsassent under Article 58 of the ECSC Treaty tothe draft Commission Decision concerning theextension of production quota arrangements inthe steel sector for one year from 30 June 1982.In addition to products covered hitherto, the

new arrangements also include wire rod.Furthermore, the changes involve provisions forupdating reference output, in particular for rein-forcing bars and merchant bars, higherthresholds in the event of exceptional difficultiesadjusting a company s reference in order to takeaccount of changes in production capacity aspart of a restructuring programme and provi-sions covering the cases of merger, separation orformation of a new company.

1 Bull. EC 11- 1982, point 1.2. et seq.2 Bull. EC 2- 1982, point 2. 1.1; Bull. EC 6- 1982, point

1.3.

As far as price policy is concerned, the Councilalso gave its assent concerning trade obligations.

As regards the social aspect of this dossier, theCouncil adopted a Decision concerning a con-tribution for 1982/83 to the ECSC financed by atransfer from the EEC budget to the ECSC.

Pursuant to this Decision, an additional con-tribution ,of 100 million ECU is granted to theECSC out of the general budget of the Com-munities for the financial years 1982 and 1983to allow implementation of the 1981/84 specialtemporary aids programme.

This amount is to contribute towards ensuringthe continuation of Community financing ofspecial temporary allowances in favour ofworkers in iron and steel firms and iron-oremines in the Community whose jobs are directlyor indirectly abolished or threatened in conse-

quence of a restructuring plan adopted by theundertaking, group of undertakings or publicauthorities in accordance with the general objec-tives for steel.

Social affairs

The Council adopted an important Directive onthe protection of workers from harmful ex-posure to metallic lead and its ionic compoundsat work. 1 This Directive is of particular signifi"cance in view of the range and importance of thesectors and the considerable number of workersconcerned. It is the first individual Directive

within the meaning of the Directive adopted on27 November 1980, which introduced a set offramework provisions for future regulations atnational and Community level in the field of theprotection of workers against harmful agents.

Analysing the situation of women in modernsociety, the Council adopted a resolution on thepromotion of equal opportunities for women.

In October 1982 the Commission sent theCouncil its proposals on the revision of theEuropean Social Fund.4 These proposals wouldinvolve far-reaching changes in the structure ofthe Fund by providing for Fund intervention inthe areas hardest hit by unemployment in in-dustrialized regions, by enhancing the Commis-sion s guiding function in this area and by put-ting an end to legal protection of regions whichenjoy absolute priority.

Environment

At its meeting in June 1982 the Council ap-proved several acts marking a further stage inthe introduction .of a Community policy of en-vironmental protection and improvement of thequality of life. Of note in this connection are:. the Regulation on the implementation in theCommunity of the Washington Conventionon International Trade in Wild Fauna andFlora; 5

. a Directive laying down air quality standardsfor lead: 6

. a Directive laying down methods for the sur-veillance and monitoring of environments af-fected by waste from the titanium dioxide in-dustry;. a Decision on the consolidation of pre-cautionary measures concerning chlorofluoro-carbons in the environment.

At international level, the Community alsoplayed an active part in the 'special meeting' ofthe Governing Council of the United Nations

Environment Programme which took place inNairobi in June 1982.

Transport

The Council held an important meeting in Junewhen it adopted a number of Decisions.

The Council reached agreement in the field of in-land waterway transport on a Directive layingdown technical requirements for inlandwaterway vessels.

In rail transport the Council adopted a Decisionconcerning price formation in respect of the in-ternational carriage of goods by rai1.9

In addition, the Representatives of the Govern"ments of the Member States of the EuropeanCoal and Steel Community, meeting within theCouncil, approved a Decision authorizing theCommission to enter into negotiations with

1 OJ L 247, 23. 1982.2 OJ L 327, 3. 12.1980.3 OJ C 186, 21.7. 1982.4 Bull. EC 10-1982, points 1.2. 1 to 1.2.8 and OJ C 308,25. 11.1982.5 OJ L 210, 19. 1982.6 OJ L 378, 31.12. 1982.7 OJ L 329, 25. 11.1982.8 OJ L 301 , 28. 10. 1982.9 OJ L 234

, 9. 1982.

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Yugoslavia on the carriage of coal and steel byraiI,1

The Council adopted two new provisionsdesigned to promote combined transport.

In the sphere of road transport, the Counciladopted a Decision on the conclusion of the

Agreement liberalizing in certain cases the inter-national ' carriage of passengers by road bymeans of occasional coach and bus services(ASORV The Council subsequently depositedthe instrument of Community approval of theAS OR Agreement with the EuropeanConference of Ministers of Transport.

With regard to air transport, the Counciladopted a Directive constituting an updated ver-sion of Directive 80/51/EEC on the limitation ofnoise emissions from subsonic aircraft.

Finally, the Council adopted:.. the second Directive on summer time ar-rangements for 1983, 1984 and 1985;

. a Directive on measures to facilitate the effec-tive exercise of freedom of establishment andfreedom to provide services in respect of ac-tivities of self-employed persons in certain ser-vices incidental to transport and travel agenciesand in storage and warehousing.

Energy

Having noted a fall in energy consumption andin demand for petroleum products, the Councilfelt that there was a need not only for furtherprogress towards attaining the objectives whichthe Community had set itself, which were torestructure demand in order to achieve more ef-ficient use of energy and to develop energysources other than oil, but also to keep a con-stant watch on the results obtained in the Com-munity. It noted that the Commission intendedpaying special attention, in future examinations,to the priority areas defined in its communica-tion on the development of a Community energystrategy 6 and which the Commission felt calledfor Community action.

The Council also stressed the need for MemberStates to develop gradually a common approachon price formation. In this connection, theCouncil considered that government policiesmust aim to reduce gradually the artificial ob~stacles preventing reliable information fromreaching the market.

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Research

The Council took two important decisions inthis area. It adopted a programme of researchand development in raw materials.7 Thisprogramme comprises the following basicfeatures:. continuation and extension in an integrated

framework of a number of research activitieshitherto undertaken as separate programmes;. incorporation of two programmes alreadyadopted and under way (secondary rawmaterials and uranium);. execution by either indirect action (shared-

cost contracts between the Commission andpublic or private research organizations in the

Member States) or by action on the part of theMember States, coordinated at Communitylevel;. funding for the programme of 54 millionECU.

It also adopted a research and teachingprogramme (1982/86) in the field of controlledthermonuclear fusion.

The Council also adopted:. a multiannual research and training pro-gramme in the field of biomolecular engineering,taking the form of indirect action;. a sectoral research and developmentprogramme of the European Economic Com-munity in the field of medical and public healthresearch ~ concerted action (1982/86);.. a European Economic Community researchand development programme for a machine

translation system of advanced designY

Agriculture

During the period under review the Councilfixed farm prices for the 1982/83 marketingyear and related measures. Its decisions (62

1 Bull. EC 6- 1982, point 2. 1.156.2 OJ L 184, 29. 1982; OJ L 247, 23. 1982.3 OJ L 230, 5. 1982.4 OJ L 173, 19. 1982.5 OJ L 213, 21.7. 1981.6 Supplement 4/81 - Bull. EC.., OJ L 174, 21.6. 1982.8 OJ L 157, 8. 1982.9 OJ L 375, 30. 12. 1981.10 OJ L 248, 24. 1982.II OJ L 317, 13. 11.1982.

Regulations) have produced an average increasein ECU amounting to 10.4'

In so doing, the Council was concerned to bringabout better price relativities (which led, interalia, to the adoption in the case of cereals of anincrease below the level of the aforementionedaverage figure) and to take steps to ensure bettermarket management.

At the same time, the Council adopted Regula~tions on the adjustment of the acquis com-

munautaire in the wine sector aimed at main-

taining a desirable market balance and at help-ing to rationalize the situation in this sector.

The Council also agreed to speed up examina~tion before the end of 1982 of proposals andcommunications regarding the acquis com-

munautaire in the fruit and vegetables and oliveoil sectors, with a view to enlargement.

Regional policy

In October 1981 the Commission transmitted tothe Council a proposal amending the Regulationestablishing the European Regional Develop-ment Fund.2 At its meeting in April 1982 the

Council held an initial policy discussion on twofundamental features of this dossier, namely, thegeographical concentration of the quota systemand the coordination of regional policies.

Approximation of laws

The Council adopted a Directive on informationto be published on a regular basis 3 as a follow-

up to the Directives on conditions for admissionto official stock exchange listing and conditionsfor distribution of the listing particulars to bepublished for such admission, adopted in March1979 and March 1980 respectively.

The Council also adopted a Directive on the ap-proximation of the laws of the Member Statesrelating to cosmetic products.

Compensation to theUnited KingdomThe Council discussed the budgetary solution tobe found for the United Kingdom for 1982 onthe basis of a Commission proposal. TheForeign Ministers reached an agreement in prin-ciple at their informal meeting on 24 and 25

May, and the final conclusions as to compensa-tion were worked out by the Ministers on 26 Oc-tober 1982.

Ministers will now have to take a decision on thesolution to be found for the ensuing problems.

Greek memorandum

In March 1982 the Greek Government submit-ted a memorandum on relations between Greeceand the European Communities. In a replydated 10 June the Commission stressed the needto tackle the particular problems facing Greeceand to take them into account in the frameworkoutlined by the Commission. The Council thenasked the Commission to remain in contact withGreece in order to obtain maximum informationon the various aspects of this problem. Thesecontacts began in September 1982 and havebeen particularly active.

Relations between theinstitutionsThe Presidents of the European Parliament, theCouncil and the Commission signed a jointdeclaration on 30 June on various measures toimprove the budgetary procedure. On that occa-sion the President of the Council stated his opi-nion that the signing was a major event in rela-tions between the Community institutions asthey needed to be able to cooperate in the jointtask of building Europe.

It was in the same spirit that the Council sent aletter to the European Parliament on 6 April1982 clarifying and making certain improve-ments to relations between the European Parlia-ment and the Council, regarding for instanceprogramme speeches by the Presidency, writtenand oral questions, appearances of the Presi~dents of the various specialized Councils beforeparliamentary committees and optional con-sultation and fresh consultation of the EuropeanParliament.

In a letter dated 25 October 1982 the EuropeanParliament was informed that, as far as possible,

1 OJ L 162, 12. 1982; OJ L 164, 14. 1982.2 OJ C 336, 23. 12. 1981.3 OJ L 48, 20. 1982.4 OJ L 167

, 15. 1982.5 Bull. EC 5- 1982, points 2. 10 and 2.3. 11; Bull. EC 10-1982, point 2.3.4.

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the President was prepared to take part in urgentdebates on Community subjects.

The Council has begun examining the resolutionadopted by the European Parliament on March 1982 on a draft uniform electoralprocedure for electing the members of the Euro-pean .Parliament.

The CouNcil has also begun examining:

. the Commission proposals for improving theconciliation procedure between the EuropeanParliament, the Council and the Commission;. the Commission communication on the roleof the European Parliament in the preparationand conclusion of international agreements andaccession treaties.

Enlargement

The accession negotiations have made impor~tant strides forward during 1982 in line with thewish expressed by the European Council on anumber of occasions - most recently in June1982 ~ for progress to be made in this area.

A first series of chapters was settled with Por-tugal in February, namely: capital movements,transport, regional policy, economic and finan-cialquestions and Euratom. The Communityhas defined its position on certain chapters in asecond series, and these are now beingnegotiated. The chapters involved are thoserelating to the industrial sector - customs unionECSC, external relations - and the chapters onthe right of establishment and taxation. Themost recent Ministerial meeting of the con-ference was held at the end of November.

A series of chapters has also been settled withSpain, namely: capital movements, transport,regional policy, right of establishment, economicand financial questions and approximation oflaws. The search for solutions in respect ofanother series of chapters is now at the stagewhere negotiations should be concluded in thevery near future. The chapters concerned arethose relating to the industrial sector - customsunion, ECSC, external relations and thechapters on taxation and patents. The nextministerial meeting of the conference scheduled for December next.

The inventory, accompanied by appropriateproposals on the problems posed by enlarge-ment for Community policies and for each of the

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Member States, which the June European Coun~cil asked the Commission to compile, has nowbeen presented by the latter.

External relations

Community policy on external relations hasalways been marked by solidarity and many ex-amples have been given. The Community andthe Member States again demonstrated thissolidarity in many areas during 1982, but in par-ticular:. by supporting the United Kingdom throughthe adoption of common measures during theFalklands crisis;. by undertaking purely humanitarian action

the form of gifts to the poorest sections of thePolish population;

. by continuing to give priority attention to theproblem of world hunger.

At trade-policy level, measures to combatprotectionist tendencies aimed at safeguardingthe international trading system and relationswith the other major industrialized countrieshave continued to be a major source of concernto the Community.

In this connection the Community wouldemphasize that despite the constantly growingworldwide economic crisis and the variousproblems pointed out in this report, the basicrules of GATT trading principles have beencomplied with and the Community is continuingits efforts to see that those principles continue tobe followed.

The advent of a growing dispute with the UnitedStates, which has deepened following the Ver-sailles Summit, at which the Communities wererepresented by the President of the EuropeanCouncil and the President of the Commission,prompted a vigorous reaction from the Council,which regretted the practice of unilateralmeasures and emphasized the need for disputesto be settled with strict regard for approved in~

ternational commitments, while indicating itsreadiness for a dialogue.

The continuing considerable imbalance in tradewith Japan to the detriment of the Community,

1 OJ C 87, 5.4.1982; Bull. EC 3- 1982, point 2.4.2 Supplement 3/82 - Bull. EC.3 Supplement 8/82 - Bull. EC.

despite the many consultations with thatcountry over a number of years, has led to theCouncil decision to initiate the procedure underArticle XXIII of the GATT, which coversmeasures by one party which are likely to cancelout or to jeopardize the advantages deriving forthe other party from the Agreement. In the

Community s view, such is the case with Japanwhose exports of manufactured products havedeveloped on a major scale over the last 20years, whereas the level of penetration of theJapanese market by manufactured productsfrom the Community has remained practicallythe same.

On the occasion of the 10th anniversary of thesigning of the free-trade agreements linking theCommunity with the EFT A countries, which areamong the Community s major trading partnersthe Council adopted a statement expressingsatisfaction at the excellent way in which theseagreements had operated and confirmed theCommunity s interest in improving and inten-sifying cooperation with its EFT A partners.

The Council laid down the main lines of Com-munity participation in the GATT ministerialmeeting.

Negotiations for the renewal of the MultifibreArrangement were concluded on terms which

. covered the basic concerns of the Community,and the Council was thus able to notify theCommunity s acceptance of MFA III. TheCouncil therefore took a decision at the sametime providing for denunciation of the MultifibreArrangement by the Community no later than31 December 1982 should the Community beunsuccessful in negotiating satisfactory bilateralagreements. Some of these agreements havealready been negotiated.

Following the imposition of martial law inPoland in December 1981 , the Council ter-minated sales of food products to that countryon exceptional terms and initiated the above-mentioned humanitarian measure. In the sameconnection, the Council adopted measures toreduce imports of certain products originating inthe USSR.

In the field of relations with the developingcountries, it should first of all be noted that theCommission has recently sent to the Counciland the European Parliament an importantmemorandum 1 calling for overall thinking ontrends in Community development policy, bothautonomous and contractual, with a view to

identifying the principles and guidelines whichshould direct the course of this policy during thisdecade. The Council has begun its examinationof this memorandum.

The accession of Zimbabwe, Antigua and Bar-buda, and Belize brings the number of ACPMember States of the Lome Convention to 63.The Convention, to which the Community isknown to attach special importance, has con-tinued to be implemented smoothly. The meetingof the ACP-EEC Council of Ministers inLibreville on 13 and 14 May 1982 led to areview of cooperation and, in particular, to thesolution of a problem concerning the .applicationof the Stabex 2 system, thanks to exceptionaland additional finance granted by the Com~munity for 19.82. Prior to that, a solution hadalso been found to the dispute over the level ofguaranteed prices for ACP sugar.

The Council began examination of another im-portant Commission communication on theimplementation of a Mediterranean policy bythe enlarged Community to take account of theforeseeable effects of enlargement. 3 Relations

with the Mediterranean countries were alsomarked by the positive conclusion of all negotia-tions for the renewal of the Financial Protocolswith the Maghreb and Mashreq countries, in-volving an overall budget of some 1 000 millionECU made available to the countries in questionby the Community in the form of grants or loansfor the next five years.

ministerial meeting with Egypt led to astrengthening of the cooperation ties based onthe 1977 Agreement. At the ministerial meetingwith Cyprus on 25 October the Community toldCyprus that the Council had adoptednegotiating directives for the Commission with aview to defining mutual trade arrangementsbetween the Community and Cyprus for 1983.The conclusion of the Protocol of adjustment tothe Cooperation Agreement with Yugoslavia fol-lowing Greek accession signalled a revival inrelations, thanks also to the short-term solutionunilaterally arrived at by the Community on thebaby beef' problem.

The Council has recently made a start on dis-cussion of the Commission proposals concern-

1 Supplement 5/82 - Bull. EC.2 System for the stabilization of ACP and OCT exportearnings.J Bull. EC 6- 1982, point 1.2. et seq.

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ing relations between the Community andMalta.

In the sphere of basic products the Communitycontinued its policy of active participation in in-ternational commodity agreements, in particularby signing the sixth Tin Agreement, ratifying theRubber Agreement and making further effortsto accede to a new improved Sugar Agreement.

Cooperation with India, Asean and otherpartners in Asia continued normally. The exten-sion of cooperation with Latin Americacon~tinued to be of major importance to the Council.The framework Cooperation Agreement withBrazil, which entered into force on 1 Octoberwill give a new dimension to cooperation withthat country.

At its meeting on . 22 November the Council(general affairs) decided, in the light of thedeclarations by the European Council of Marchand June 1982, to increase the technical andfinancial aid from the Community . to CentralAmerica for 1982.

The fight against world hunger continues to beatop-priority objective which the Community. endeavouring to promote in all its aid pro-

grammes, as well as in its food aid programme.The action plan against world hunger has alsocontinued to be implemented, with the Com~munity being in the process of implementing anew form of action in the form of support for:

food strategies, . starting with a number ofAfrican countries. The Council has also under-taken a feasibility study on longer-term en-

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couragement for food production in the develop-ing countries and of thematic measures (reaf~forestation, campaign against endemic diseases,environment).

The Community has continued to relieve misery,wherever it may have occurred, through itsemergency aid measures and refugee aid. Theprogramme of aid for the non-associateddeveloping countries, the number one priority ofwhich remains the development of food produc~

tion, has been greatly expanded in 1982. TheCommunity has stated its readiness to extend itscooperation to the . energy sector also, in theform of support for energy planning in thosedeveloping countries desiring it. The Council hasalso been concerned with the question of Com-munity aid in relation to the role of women inthe developing countries.

The. Generalized Scheme. of Preferences for1982 will contain further improvements to thescheme for the previous year, particularly forthe poorest countries.

The Community has been unstinting in its ef-forts to help find a consensus in favour of the ac-tual launching of global North~South negotia-tions, to which it remains profoundly attached.The results of the Western Economic Summit atVersailles bear witness to these efforts, since allthose attending the Summit held the view thatthe opening of global negotiations represented amajor political objective . The - Community

. regrets that no agreement has so far beenreached on the actual opening of these negotia~tions.

Political cooperation

1. Growing international and regional con~flicts and tension of concern to Europe haveonce more underlined the need for close politicalcooperation amongst the Ten. Only frequentand thorough consultations can enable the Tento bring their common positions and joint actionto bear with the necessary vigour and thereby

contribute to finding solutions to international

conflicts and to the preservation of peace andstability in Europe and in the world.

2. The report of the Foreign Ministers onpolitical cooperation (EPe) adopted on 13 Oc-tober 1981 in London (the London report) 1provided for a strengthening of political commit-ment and for a strengthening of the existingprocedures and mechanism of the politicalcooperation through a number of innovationswhich have been carried out successfully. Thusthe crisis procedure has been applied on anumber of occasions. The support given to thePresidency from preceding and succeedingPresidencies has proven to be most valuable insecuring continuity within the EPC. As also laiddown in the London report, the Commission hasbeen fully associated with political cooperationand represented .at ECP meetings at all levels.

3. The significance of the cooperation with theEuropean Parliament is underlined in inter alia,the London report, in which the close relationsbetween the EPC and the Parliament aredescribed in detail. In addition to the already ex-isting procedures, the Foreign Ministers haverecently expressed their readiness to keep theParliament, if it so desires, informed on the out-come of the special EPC crisis meetingsprovided for in paragraph 13 of the Londonreport.

4. As laid down in the London report, the Tenhave noticed an increased desire from a numberof third countries to enter into closer contact

with them. The Ten have responded effectivelyto these requests, particularly vis-a.-vis countriesof special interest to them. Regular contactswithin the framework of the EPC have been es-tablished with the applicant countries, Spain and'Portugal. These procedures should be seen as apreparation for the two countries ' full participa-tion in the EPC once they become members ofthe Community.

5. The Ten attach great importance to therelations with the United States and emphasizethe continuous need for close consultations. Tothis end the President of the EPC has met withhis American colleague. Furthermore, a firstmeeting between the political director of thePresidency assisted by the political directors ofthe preceding and succeeding Presidencies andhigh-level officials from the United States tookplace in September 1982 to substantiate thedialogue across the Atlantic. At that occasion

both sides stressed the importance of and theneed for close consultations and coordination.

East-West relations

6. Serious setbacks in East-West relationshave been a major element in the deterioratinginternational situation during recent years. Thepast years have brought new and disturbingviolations of the principles on which the UnitedNations is based and the Helsinki Final Act. Thecontinued occupation of Afghanistan with theevident willingness of the Soviet Union to pursueits aims by use of its massive military potentialhave contributed to create a climate of distrustand tension. The tragic events in Poland sincelast December which took place under pressurehave also had a major negative impact onoverall East-West relations. These events, takingplace in the heart of Europe, cause deep concernamong the Ten.

7. To halt the present negative trend and todevelop substantial and balanced East-Westrelations aimed at genuine detente, the causesunderlying the negative developments in East-West relations should be removed in order torestore respect for the principles of the UnitedNations Charter and the Helsinki Final Act andto ensure mutually advantageous cooperationthrough dialogue and negotiations. The Tenhave already shown their readiness to contributeto a positive development of East - West relationsand they have urged the Soviet Union todemonstrate a similar inclination.

Conference on Security andCooperation in Europe

8. The Ten attach particular importance to thecoordination of their views on the CSCE. Inten-

I Supplement 3/81 - Bull. EC.

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sive consultations continued throughout the yearand served to enhance the contribution made bythe Ten at the Madrid meeting which wasresumed on 9 November 1982. The Ten, now asbefore, view the CSCE process as a useful toolfor furthering their objectives in the East-Westdialogue. The Ten hope that it will be possible atthe resumed session of the Madrid meeting toreach agreement on a balanced and substantialconcluding document. Such a document shouldmark tangible progress within the human dimen~sion of the Helsinki Final Act and contain aprecise mandate for a conference on disarma-ment in Europe. In the opinion of the Ten thedraft concluding document submitted inDecember 1981 by eight neutral and non-aligned countries remains a good starting pointfor the negotiating process in Madrid. The Tenhave submitted some essential and reasonabledraft amendments to this document for negotia~tion which reflects recent developments in theEast-West relations.

Poland

9. Ever since the imposition of martial law inDecember last year the Ten have followeddevelopments in Poland with profound concern.In sincere compassion with the Polish people theTen have, on several occasions, reiterated theirrequests to the Polish authorities to lift martiallaw, free those .arrested and restore a genuinedialogue with the Catholic Church andSolidarity. Although the recent release of LechWalesa may indicate a step in the desired direc"tion the Ten regret that the prospects for an ear-ly improvement of the situation in Poland re-main uncertain.

Middle East10. The Ten have continued their activediplomacy with a view to promoting a com-prehensive peace settlement in the Middle East.As confirmed by the declaration of September 1982 on the Middle East, l such a set-tlement to be concluded with the participation ofall parties, which means that the PLO will haveto be associated with negotiations, should bebased on the principles of security for all Statesin the region including Israel's right to exist,justice for all peoples, including the right of self-determination for the Palestinians with all thatthis implies, and mutual recognition by all theparties involved.

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11. During the first months of the year effortswere concentrated on securing Israeliwithdrawal from the remaining part of Sinai.The Israeli .evacuation took place on scheduleand was completed on 25 April. In its statementon the Middle East of 30 March the EuropeanCouncil noted that the participation of fourMember States of the European Community inthe' Multinational Force and Observers in Sinai(MFO) was a positive contribution in connec-tion with the completion of the Israeliwithdrawal from Sinai.2

12. During spring the then President of theCouncil of Ministers, Mr Leo Tindemans, held aseries of contacts with the parties concerned toexplore their attitude further. Mr Tindemansreported to his colleagues on 21 June. In hiscomprehensive report Mr Tindemans, amongother things, pointed out the need for continuityin the endeavours of the Ten.

13. The development of the Arab-Israeli con-flict took a dramatic turn with the Israeli inva-sion of Lebanon in June. The Ten vigorouslycondemned the-invasion in their declarations of9 and 29 June 3 and called for the complete andprompt withdrawal of Israeli forces as well asthe departure of all foreign forces except thosewhich may be authorized by the Government ofLebanon.

14. However, following the dramatic andtragic events in Lebanon , there were signs of apositive development in the area. In his speechto the UN General Assembly on behalf of theTen on 28 September 1982 4 Mr Uffe Ellemann-Jensen, the current President of the Council ofMinisters , stressed that the Ten are encouragedthat the essential principles which in their viewmust be accepted and reconciled as the basis fora comprehensive, just and durable settlement arecommanding increasing acceptance. In the samespeech Mr Ellemann-Jensen welcomed the newAmerican initiative contained in PresidentReagan s speech on 1 September 1982. It offersan important opportunity for peaceful progresson the Palestinian question and a step towardsthe reconciliation of the parties' conflictingaspirations. All parties should seize the present

1 Bull. EC 9- 1982, point 2. 55.2 Bull. EC 3- 1982, point 1.3.3 Bull. EC 6- 1982, points 2. 74 and 2. 75.4 Bull. EC 9- 1982, point 3.4.

opportunity to initiate a process of mutual rap-prochement leading towards a comprehensive

peace settlement. In this connection, Ellemann-Jensen emphasized the importance ofthe statement adopted by Arab Heads of Stateand Government at Fez on 9 September, whichis seen by the Ten as an expression of theunanimous will of the participants, including thePLO, to work for the achievement ofa justpeace in the Middle East encompassing allStates in the area, including Israel. In the speechMr Uffe Ellemann-Jensen also called for asimilar expression of a will to peace on the partof Israel.

15. The Ten believe that discussions of theFranco- Egyptian draft resolution by theSecurity Council could playa useful part in es-tablishing a common basis for a solution of theproblems of the area.

16. In New York Mr Ellemann-Jensen metwith Mr Faruq Khaddoumi, Head of the PLOPolitical Department. Mr Ellemann-Jensen inthis context expressed the wish of the Ten to seethe Palestinian people in a position to pursue

their demands by political means and that theachievement of these should take account of theneed to recognize and respect the existence andsecurity for all.

17. Mr Ellemann-Jensen visited Beirut on6 November 1982, to express the Ten s sup-

port of the Lebanese Government and the unityand independence of Lebanon and to discuss as-sistance for reconstruction. Mr Ellemann-Jensenalso visited Amman (6-8 November), as Jordanplays a crucial part in ongoing peace efforts.

18. The Ten have on various occasionspointed out the danger which the conflictbetween Iran and Iraq continues to cause to thestability in the region. They have in theirdeclarations called for a peaceful solution to theconflict on the basis of the relevant UnitedNations resolution.

Afghanistan

19. The Soviet military occupation in 1979 ofAfghanistan , a former non-aligned and indepen-dent country, remains a source of grave concernto the whole world and continues seriously to af-fect the stability of the region. More than 20% ofthe Afghan population have had to flee their

home country, and unbroken resistance inAfghanistan clearly shows that the Afghan peo-ple reject the political system forced upon them.In their joint statement at the opening of the37th UN General Assembly the Ten stronglyurged consideration of the European Councilproposal of 30 June 1981 for a comprehensive

political settlement. Through a two-stage inter"national conference the proposal seeks to bringabout the cessation of external intervention andthe establishment of safeguards to prevent suchinterventions in the future, taking into full ac-count the legitimate interests of the countries inthe area. The Ten note with interest the effortsundertaken by the Secretary-General and hispersonal representative aiming at politicalsolution. Any solution should be reachedbetween all parties concerned, should be basedupon the principles of the United Nations resolu-tions, and should include the withdrawal offoreign troops. At its meeting on 29-30 March1982 the European Council denounced thenegative attitude of the Soviet Union, which hassuccessively rejected proposals made by theTen, the non"aligned movement, the IslamicConference and the UN General Assembly. TheTen also supported the initiative by the Euro-pean Parliament making 21 March 1982Afghanistan Day

South- East Asia

20. Like Afghanistan Kampuchea has beeninvaded and occupied by a foreign power. All ef-forts to bring about a solution to the Kam-puchea problem have foundered so far by therefusal of Vietnam to accept the relevant UnitedNations resolutions as the basis for a genuinepolitical settlement. The Ten have continued todevelop their relations with the Association ofSouth-East Asian countries (Asean), and theBelgian Foreign Minister, Mr Tindemans, at-tended the annual Asean ministerial meeting inSingapore in June on behalf of the Ten. The Tennote with interest new developments whichcould contribute towards a comprehensivepolitical solution. Resistance forces have cometogether and announced the formation of acoalition. There have also been contacts recentlybetween Vietnam and other governments in theregion. The Ten note with satisfaction that theresolution on Kampuchea at the 37th UNGeneral Assembly was adopted by anoverwhelming - and even increased - majority.They remain prepared to support any initiative

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which aims at establishing a truly representativegovernment in a neutral and independent Kam-puchea.

Africa

21. The Ten have continued to consult' on awide range of African issues.

22. They have in particular repeated their un-equivocal condemnation and rejection of thepolicy of apartheid in South Africa. They havecontinued their efforts to promote peacefulchange. To this end the Ten have continued tostudy how to best use the collective weight of theEuropean Community and they have continueda critical dialogue with South Africa.

23. The Ten remain convinced of the need forearly independence for Namibia in accordancewith Security Council Resolution 435. Theyhave commended the Western Five for their un-tiring efforts to this end. They have expressedsupport for all parties who have striven to bringabout independence for Namibia.

Latin America

24. The Ten have on several occasions reaf-firmed the importance they pay to their relationswith Latin America. They have, therefore, bothcollectively and as individual States, aimed atstrengthening the relations with the States in

Central America, the Caribbean region andSouth America. At its meeting on 29-30 June1982 the European Council instructed theForeign Ministers to study the appropriatemeans to strengthen cooperation between theTen and this region. At their meeting on 20September the Foreign Ministers agreed on anumber of steps to be taken with that purpose.

25. The Ten have expressed their serious con-cern about the growing tension in CentralAmerica, which in their view is mainly causedby long-standing and grave economic and socialproblems. They are convinced that only theimplementation of a political dialogue andnegotiations with the participation of all the par-ties concerned will bring about a peaceful settle-ment. The necessary political solutions shouldbe sought and found by the parties to the con-flict themselves.

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26. The Ten deplored the invasion of theFalkland Islands by Argentina, where force wasused against a Member of the Ten. They are,however, optimistic that this issue will not be anobstacle to the further development of their rela~tions with the countries of Latin America.

Cyprus27. The Ten continue to take the greatest in-terest in the Cyprus problem. They have statedtheir policy on many occasions, most recently inthe general debate of the 37th United NationsGeneral Assembly, when the President of theTen expressed support for the efforts of theSecretary-General of the United Nations tobring about a just and lasting solution that willeffectively maintain the unity, territorial integrityand independence of the Republic of Cyprus.

The United Nations

28. The Ten have strengthened further theiralready close cooperation in the United Nationssystem. Regular consultations have become thenorm not only in the General Assembly and itsvarious bodies, but also in the specialized agen-cies, international conferences and other organsof the United Nations. In all these fora the Tenhave endeavoured to harmonize their votingpositions as well as to reach agreement on com-mon statements and common explanations ofvote with a view to presenting the common posi-tions of the Ten on as many subjects as possible.

Disarmament29. At the United Nations second special ses-sion devoted to disarmament (7 June to 10 July1982) the 10 Member States of the EuropeanCommunity were represented at a high politicallevel and participated actively in the work of thespecial session. Besides giving their views incommon general statements in the plenary andin the main committees of the special sessionthe Ten also contributed with common replies toenquiries from the Secretary-General of theUnited Nations concerning the subjects 'therelationship between disarmament anddevelopment' and ' the relationship between dis~armament and international security

Commission report on European Union

Introduction1. This report on the progress of theCommunity towards European Union is thesixth 1 of its kind from the Commission to theCouncil and the Member States since theTindemans report2 in 1975.

2. During 1982 the European Community hasbeen severely tested by events. Trade disputesand monetary disturbances have confronted theCommunity with an imperative need to acttogether in defenc.e of the common interest. Byand large, the Community has responded well tothese challenges.

3. However, solidarity in the face of externalevents has not been matched by internal reform.In particular, the adaptation of the commonagricultural policy and the financing of theCommunity have threatened more than once toblock the decision-making process as a whole atcritical moments. They are endangering thenegotiations on the third enlargement, to includeSpain and Portugal in the Community.

Some progress has been possible in economicand social policies, but not enough to offer thefirm prospect that, in 1983, the Community willbe able to make a decisive advance towardseconomic recovery and reducing unemploy-ment. It is essential to make possible amacroeconomic strategy based on a genuinelyintegrated internal market, on industrial, energyand research and development policies that arefully consistent at a European level, and sup-ported by structural financial instrumentscapable of exerting a greater influence.

4. Nevertheless, in 1982, valuable groundworkhas been done which could enable progress to bemade towards a European Union. In this respectthe Commission believes that the Communitysuccess in meeting external challenges is a timelyreminder. In steel, for example, it has beendemonstrated, once again, that externalsolidarity is most effective when based on adeveloped common policy for internal as well asexternal aspects of the question. In contrast, thelack of common policies, or their weakening bylong-standing and unresolved disagreements, isa constant impediment to external solidarity, asit is, more broadly, to economic recovery withinthe Community.

This report now examines in more detail the

principal developments within the Communityin 1982, relating to progress towards EuropeanUnion.

Political and institutionalEu rope6. In June 1982 tripartite discussions betweenthe Presidents of the European Parliament, theCouncil and the Commission were brought to asuccessful conclusion with the signing of a jointdeclaration on budgetary questions.3 This agree-

ment is designed to improve the operation of thebudgetary procedure and thus to avoid, to theextent possible, recurrent delays in the adoptionof the Community s budget. The agreementcovers, in particular, the classification of expen-diture and its division between compulsory andnon-compulsory categories. It provides a clarifi-cation of the procedures to be followed and ofParliament's role.

This agreement inaugurates, it is to be hoped, aperiod in which there can be a more harmoniousfunctioning of the budget procedures of theCommunity.

7. As regards the European Union morebroadly, two major initiatives have been taken:

The first of these is the proposal for a EuropeanAct 4 jointly made by the Foreign Ministers ofthe Federal Republic of Germany and theItalian Republic in November 1981. It includesa declaration relating to economic integration.The proposal is designed to bring together thepresent Community process and the Europeanpolitical cooperation process and, at the sametime, to extend intergovernmental cooperation

to new areas. It also aims to improve the func~tioning of the Community s institutions, by mak-ing some adjustments to the balance of respon-sibilities between them, by improvingmechanisms for coordinating the political andeconomic arms of the Community and by aclarification of understandings about votingprocedures.

The second is wider-ranging and more ambitiousin character. In July 1982 the European Parlia-

1 Supplements 8/77, 1/79, 9/79, 4/80, 3/81 - Bull. EC.2 Supplement 1/76 - Bull. Ec.3 OJ C 194, 28. 1982; Bull. EC 6- 1982, point 1.1.1

seq.4 Bull. EC 11- 1981, points 1.2. et seq. and 3.4.

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ment adopted a resolution defining its attitude tothe reform of the existing Treaties and theachievement of a European Union. 1 The resolu-

tion concerns, in particular, a definition of thetasks of the Union, the financing of the Unionand the definition of a new balance of respon-sabilities between the Community s institutions.

The European Parliament intends to examine afull draft fDr a new Treaty in 1983 and has an-nounced its desire to see organized a conferenceon the future of the Treaties at the end of 1983.

8. Finally, the Commission has submittedproposals to the Council and to the EuropeanParliament concerning the role of the EuropeanParliament in the preparation and conclusion ofinternational agreements and accession treaties.These suggestions represent, in the opinion ofthe Commission, practical improvements whichdo not require a change in the division of powersbetween the institutions as laid down in theTreaties.

Economic and social Europe9. Two realignments have been made withinthe European Monetary System, in Februaryand in June of 1982, related to an insufficientconvergence of economic policies. Nevertheless,these realignments, and the internal policymeasures which accompanied them, again con-firmed the ability of the system to make orderlyadjustments, in accordance with fundamentaleconomic criteria, while preventing erratic or ir-rational exchange rate movements.

The Commission hopes that its proposals 2 for a

strengthening of the European Monetary Systemwill obtain the approval of the Council Ministers. A wider international stabilization ofexchange rates will be helped by such astrengthening.

10. The economic recovery which wasforecast for the second half of 1982 has notmaterialized. The prospects for 1983 are not en"couraging. The Commission has thereforeproposed to the Council 3 that the coordination

of economic policies, and the financial policymix within the Community, should ensure a bet-ter level of activity, while continuing to pursue areturn to the essential fundamental equilibria.The Commission has identified three main issues

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for internal economic policy towards which itspolicies are directed. They are:. inadequate investment and insufficient effortfor technological development;. excessive rigidities in wage and price forma-tion and the low profitability of enterprises; and. an inappropriate structure of public expen-diture and a rapid increase in public expenditurerelative to gross national product.

11. Measures to strengthen the underlyingeconomic environment, in particular in the fieldof investment, are essential to economicrecovery and are the basis for a return to moresatisfactory levels of employment. Howeverthey need to be accompanied by specificmeasures in the employment field, relating to thereduction and reorganization of working timeunder certain conditions, and the improvementof employment opportunities for young peoplein fulfilment of guidelines laid down by Euro-pean Council at its meeting in March 1982. TheCommission s proposal to the Council concern~ing the reform of the European Social Fund,and its draft of a Council resolution concerninga policy for vocational training in the EuropeanCommunity 5 are part of this same plan of ac-tion.

The Community has continued its efforts to en-sure a coherent approach to industries in need ofmajor restructuring. It has been necessary tomaintain and adapt the regime of productionquotas in the face of a further decline in marketprospects for the steel industry. In general, theCommission has continued to play an active rolein ensuring the compatibility of State aids with

Community objectives and has taken steps toobtain a more coordinated and effective in-tervention by Community funds, notably theRegional and Social Funds, in aid of the conver-sion of regions in industrial decline.6 Finally, it

has proposed measures in support of new in~

dustries, particularly information technologies,and in support of innovation in general. 7

I OJ C 238, 13. 1982; Bull. EC 7/8- 1982, points 2.4.and 2.4.2 Bull. EC 3- 1982, point 1.4. 1. et seq.3 Bull. EC 10- 1982, points 2. 1.2 and 2. 1.3.4 Bull. EC 10- 1982, points 1.2. 1 to 1.2.8 and OJ C 308,25. 11.1982.5 Bull. EC 10- 1982, point 2. 1.31.6 Bull. EC 10- 1982, points 1.1.17 to 1.1.19.7 Bull. EC 10- 1982, points 1.1. 7 to 1.1.11.

12. The failure to make determined progresstowards a genuine Community-wide internalmarket remains of concern to the Commission.Despite political undertakings at tn.e highestlevel, the latest being the conclusions of theEuropean Council in June 1982, no significantprogress .can be claimed. Proposals to developthe internal market are still, for the most part,blocked in the Council, despite efforts to presentthem as' a coherent whole, and in their widercontext. I In addition, it should be noted thatproposals about transport policy are alsoblocked.

Worse, there has been a proliferation of nationalmeasures aimed at reducing rather than freeingthe movement of goods and services within theinternal market. Such actions are a seriousthreat to one of the main pillars of the Unionand equally to the pursuit of a policy based onthe common interest, which is the only basis foran early economic recovery. The Commission isacting with determination to combat them.

13. During 1982 prolonged discussions havecontinued about the role of the Communitybudget, in particular as a source of direct as-sistance to structural adjustment, and about theimpact of Community financing on MemberStates. They have put further difficulties in theway of the development of Community policies.

These questions are also related to the questionof the expansion of the Community s ownresources. They will need to be resolved if theCommunity is to be able to finance the existingand the new policies it needs, especially in viewof the third enlargement.

14. The adaptation of the common agri-cultural policy is one key element in the develop-ment of Community policies. Despite a difficultsocial environment, the Community was able toadopt price proposals for 1982/83 which keptthe rate of growth of the EAGGF GuaranteeSection below the rate of growth in aggregate

budgetary resources, which introduced ahierarchy of prices reflecting the desire to closethe gap between Community and world marketprices for some key products, and which in-troduced the principle of limiting priceguarantees by means of production thresholdsfor four major products (cereals, colza, milk,processed tomatoes). However, apart from wineinsufficient progress has been made towardsstrengthening support systems for Mediter-ranean agriculture.

Europe in the world

15. 1982 has been a turbulent year. InDecember 1981 martial law was imposed inPoland. In April 1982 the Falklands crisisbroke. In July 1982 Israel invaded Lebanon.Economic relations with the United States andwith Japan are passing through an exceptionallydifficult phase. The simmering crisis related tothe growing indebtedness of a number of impor-tant developing countries reached a new acuity.The European Community has been .called torespond to these events. It has shown its abilityto maintain its cohesion and to respond in atimely fashion.

16. As regards the situation in Poland, theCommunity has taken practical steps in supportof its repeated condemnations of the impositionof martial law. Concessionary sales of Com-munity foodstuffs ceased, but aid has been madeavailable swiftly to the Polish populationthrough the intermediary of non-governmentalagencies. Restrictions on the export by theUSSR of goods to the European Communityhave been introduced. The European Council,meeting in March 1982, has underlined thegrave repercussions that the situation in Polandwill have for security and cooperation in Europeand for East-West relations overall. This hasbeen borne out already by the difficult at~mosphere surrounding the ministerial meetingsof the CSCE in Madrid this year and by anagreement amongst the major West~rn in-dustrialized powers to pursue a prudent coursein commercial and financial relations with theWarsaw Pact countries. The reclassification ofthe USSR within the OECD Export Credit Ar-rangement is intended to reduce the subsidy ele-ment in export credits to that country.

17. The Falklands crisis posed problems thatwere particularly delicate for the Community.Nevertheless, the Community agreed withrapidity to the imposition of an embargo on ex-ports from Argentina to the Community.Despite the difficulties in some Member States,Community solidarity was adequately main-tained for the duration of the military conflict.

1 Bull. EC 11- 1982, points 2. 1.7 and 2. 1.8.2 OJ L 102

, 16.4. 1982; OJ L 136, 18. 1982; OJ L 146,

25. 1982; Bull. EC 4- 1982, point 1.1.1 et seq.

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18. During 1982 relations between the Euro-pean Community and the United States werestrained, notably by the unilateral decision of theUnited States to impose economic sanctions onsome Community enterprises. These sanctionswere applied to enterprises supplying materialsusing lic~nces or components of US origin forthe construction of the trans-Siberian gaspipeline. ~he European Community has playedan active role in intensive consultations betweenthe United States and her main partners.Meanwhile the sanctions have been lifted.

Following the Western Economic Summit heldat Versailles in June 1982, consultations are alsoin progress on interest rates and internationalmonetary cooperation and on cooperation in thedevelopment of high technology. Steps have

been taken at the ministerial meeting of the IMFat Toronto, in September 1982, to consolidatethe financing of world trade and development.

19. In the midst of a world recession, tradedisputes are inevitably more acute. The Com.munity has pursued difficult discussions with theUnited States on trade in steel to a successfulconclusion. 1 Negotiations for the renewal of theMultifibre Arrangement have sought a fairbalance between the interests of the Communityand of the developing world.

The Community has been able, in 1982, toadopt a global common strategy for the develop-ment of trading relations with Japan. At a Coun.cil meeting in March 1982, a programme of ac~tion was begun, aiming to tackle the problem atits source, namely the low import propensity ofthe Japanese economy and the need for Japan toreflect its international responsibilities in theconduct of its macroeconomic policy.2

This year, the Community celebrated the 10thanniversary of the signature of the free trade

agreements with EFT A. Relations with these

countries continue to develop very satisfactorily.

20. Relations between the European Com-munity and the developing world as a wholehave continued to progress. In particular, theCommunity has made major efforts in 1982 tostrengthen its action to combat hunger in theworld. A new form of action, the food strategy, is being introduced in partnership with a numberof countries in Africa.

The Community is actively preparing, on thebasis of communications from the Commission

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a general review of the Community s relations

with the developing world. Discussions have

begun on relations with the Mediterranean basinas a whole,

4 in view of the forthcoming enlarge-

ment. Discussions are also beginning on amemorandum on the Community s developmentpolicy,S in view ofthe forthcoming renegotiationof the Lome Convention. However, the failure tolaunch global negotiations between the Northand the South despite the progress achieved inthis respect during the Western Economic Sum-mit at Versailles is a continuing disappointment.

21. Negotiations on the third enlargement ofthe Community to include Spain and Portugalhave continued to advance. They have nowreached a point .at which the Community mustprepare to examine the few remaining, but mostdifficult, matters. In response to a request fromthe European Council, the Commission hasprepared an updated review of the most impor-tant outstanding issues.6 The Community re-mains fully aware of its obligations towards thenewly established democracies. Nevertheless,this aspect of its external policy, more even thanany other, would be helped by the adaptationand development of a number of Communitypolicies.

Europe and the Europeans22. Much attention has been focused on thedebates within the European Parliament on theproposed Directive on company law concerningemployee information and consultationprocedures. The European Parliament is com-pleting its examination, and discussions maysoon start in Council.

23. The Representatives of the Governmentsof the Member States have signed the agreementsetting up the European Foundation, which isdesigned to increase understanding betwe.

European peoples and facilitate their participa-tion in the development of a European Union.

1 OJ L 307, 1.11.1982; Bull. EC 7/8- 1982, point 1.1.1

seq. Bull. EC 10- 1982, point 1.3. 1. et seq.2 Bull. EC 3- 1982, point 2. 35.3 Bull. EC 6- 1982. point 1.3. et seq.4 Bull. EC 6- 1982, point 1.2. et seq~5 Supplement 5/82 - Bull. EC.6 Supplement 8/82 - Bull. EC.7 Bull. EC 3- 1982, points 1.2. 1 to 1.2.3.

A further step has also been taken towards thecreation of a uniform passport. However,despite renewed calls for action from the Com-mission and from the European Parliament,there is no progress towards the simplifying ofchecks at internal Community frontiers: indeedin some cases such checks are being reinforced.

* * *

24. Once again, this has not been a good yearas regards public opinion. Clearly public opinionis more influenced by internal dissension, and byits inability to see the European Community as a

force for internal economic recovery, than bythe Community s undoubted role in external af-fairs.

25. The Commission views with concern atendency in public life to emphasize that whichseparates nations rather than that which bindspeoples together. The European Parliament, theCouncil and the Commission stand to remindEuropeans of their common interest and identityin an increasingly dangerous world. There canbe no more practical way to do this. than tomake 1983 a year for progress towards Euro-pean Union.

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European Communities - Commission

European Union - Annual reports for 1982

Supplement 7/82 - Bull.

Luxembourg: Office for Official Publications of the European Communities

1983 - 24 pp. - 17.6 x 25.0 cm

DA, DE, GR , EN, FR, IT, NL

ISBN 92~825-3512-

Catalogue number: CB-NF-82-007-EN-

Price (excluding VAT) in Luxembourg:ECU 2 BFR 90 IRL 1.40 UKL 1.20 USD2

At its meeting in The Hague in 1976 the European Council invited the Ministers of Foreign Affairs andthe Commission to report to it once a year on the results obtained and the progress which can beachieved in the short term in the various sectors of the Union, thus translating into reality the commonconception of the European Union.

On 3 and 4 December 1982 the twO latest reports were submitted to the European Council, whichauthorized publication.