E.E.C. cash rescue plan approved

Press, 4 October 1984, Page 10

E.E.C. cash rescue plan approved

NZPA-AP Luxemburg West European Foreign Ministers approved a financial rescue for the European Community yesterday, but said another money crunch was likely in 1985. The plan calls for the 10 member countries to chip in an extra JUS7SO million (1 billion European Currency Units) now to keep the Community afloat after its regular 1984 budget runs out later this month. The Ministers also adopted a 1985 regular budget of SUSI9.S billion (26 billion E.C.U.s) just three days before their legal deadline on Saturday. But they left unresolved several important problems, including the question of how the Community will meet another expected cash shortfall next year.

“I think the budget problems have been solved” for 1984, the Irish Foreign Minister, Mr Peter Barry, said after the 10-hour meeting ended. The Ministers expected the Community to be at least SUSI. 7 billion dollars (2.3 billion E.C.U.s) short in 1985. The officials asserted in a special declaration that they would find a way to meet the 1985 money gap, but did not specify the means. The Ministers also failed to adopt a proposed system for tightening control over the budget in the years ahead. That system was agreed to in principle by the Finance Ministers on Monday, but the Foreign Ministers left it incomplete.

One of the main obstacles to deciding the new spending rules was disagreement on whether the system

should be legally binding or simply an informal guideline. Under the proposed spending rules, a formal ceiling would be placed on E.E.C. spending at the beginning of each budget year. No such limits are in place. Mr Barry said the Foreign Ministers had concluded that approval of the rules was “not as simple as it appeared yesterday” after the Finance Ministers announced the plan. The Foreign Ministers would tackle the problem again in two weeks at their regular meeting in Luxemburg. The ?US7SO million in emergency financing for the remainder of 1984 is expected to keep the E.E.C. from defaulting on its financial obligations, but even that agreement could unravel in the days ahead. That is because Britain said that its approval of the emergency financing depended on approval of the new spending controls. A British Government spokesman told reporters that the Foreign Secretary, Sir Geoffrey Howe, would not ask the House of Commons to approve the extra financing until the spending rules were adopted. He expected those rules to be approved after another round of negotiations. Britain also tagged its approval on the European Parliament’s unblocking a SUSS6S-million (750-million-E.C.U.) rebate due to the British Government this year. The Parliament had blocked the rebate in July in retaliation for Britain’s initial opposition to emergency financing for 1984.