shall establish a common agricultural policy for virtually all agricultural commodities produced within the six member states by the end of the transition period, December 31, 1969.10

The Community's Council of Ministers decided, upon entering the second stage of that transition period at the beginning of 1962, that the first steps be taken to create a common agricultural policy. Thus, on January 14, 1962, regulations for the common organization of markets in grains, pork, eggs, poultry, fruit and vegetables, and wine were adopted. At the same time, a regulation on financing the common agricultural policy was adopted. These regulations entered into effect on August 1, 1962.

Market Organization and Finance Regulations

A Common Market organization for a given commodity replaces preexisting national agricultural policies, including the national support and protection systems. The financial regulation provides for the revenues and expenditures that are necessary for the purchase of produce offered at or below a support price, for export rebates for certain exports made to non-member countries at or below the world market price, and for guidance expenditures for the creation of new agricultural infrastructures. Additional regulations for the European Guidance and Guarantee Fund and financing procedures needed for the retroactive application of the financial regulation were decided on in February 1964. The Council of Ministers had also agreed on December 23, 1963 to the establishment of a Common Market organization for beef and veal, dairy products and rice, and on principles for the fats and oils regulation. These regulations (not including fats and oils) entered into effect on July 1, 1964.

The common organization of the market for a given commodity depends for its basic orientation upon agreement on a common price for that commodity. This common price would prevail throughout the six Community countries and would replace the pre-existing national prices. On December 15, 1964, the Council of Ministers agreed on com

16 Text of the Treaty of Rome is printed in American Foreign Policy: Current Documents, 1957, pp. 426-518.

[Doc. IV-35]

463

mon prices for grains and on the guidelines for prices for the so-called conversion products, eggs, pork and poultry. These prices will enter into effect on July 1, 1967.

Unfinished Business

The principal agricultural matters which remained for the Community to settle at the beginning of 1965

were:

1. Establish common market organization for sugar, fats and oils, and tobacco.

2. Complete the common organization for fruits and vegetables. (The Council of Ministers decided in May 1965 on a levy to be used for imports during periods of oversupply even without proof of market disturbance.)

3. Establish single prices for beef and veal, rice, dairy products, sugar, fats and oils.

4. Provide no later than June 30, 1965, for the application of the financial regulation during the remainder of the transition period (the financial regulation included detailed provisions for the first three years of the transition period and the stage of the single market organization).

In addition to these measures, the conditions of competition in agriculture would have to be harmonized and state aids to agriculture abolished before a single market organization could be considered to be established.

The Mandate of the Commission

Two mandates issued by the Council to the Commission on December 15, 1964, were as follows:

The Council...

(G) ... invites the Commission to submit to it before April 1, 1965: proposals concerning the financing of the common agricultural policy for the period 1965/70.

(C) invites the Commission to submit, in the framework of its proposals on Regulation 25, referred to in Paragraph (G) of this resolution, proposals on the conditions under which Article 2 of Regulation 25 is to be applied when the common prices for various agricultural products go into effect.

Article 2 of Regulation 25 mentioned in Paragraph (C) reads as

follows under the title “Single market stage":

Revenue from levies charged on imports from third countries shall be the property of the Community and shall be appropriated to Community expenditure; the budget resources of the Community shall comprise such revenue together with all other revenues decided in accordance with the rules of the Treaty as well as contributions of Member States in accordance with Article 200 of the Treaty. The Council shall in due course initiate the procedure laid down in Article 201 of the Treaty so as to implement the above provisions.

According to Paragraph (G), the Commission prepared proposals for the Council concerning the financing of the common agricultural policy.

In the execution of its mandate, the Commission had to determine the date on which the common market would be completed. The Commission took as a base the date of July 1, 1967. (All members of the Council had agreed, in principle, to this date.)

Secondly, the Commission sought to determine what "other revenues decided in accordance with the rules of the Treaty" ought to be made available besides the contributions of the Member States, "as well as" the levies. The Commission thus referred back to a proposal that had been under discussion for some years that of including the revenue from the common external tariff.

In addition, the Commission had to act in accordance with the last sentence of Article 2, Paragraph 1, of Regulation 25 (above).

Article 201 of the Treaty of Rome, referred to in that paragraph is worded as follows:

The Commission shall study the conditions under which the financial contributions of Member States provided for in Article 200 may be replaced by other resources of the Community itself, in particular by revenue accruing from the common customs tariff when the latter has been definitely introduced.

For this purpose, the Commission shall submit proposals to the Council.

The Council, acting by means of a unanimous vote and after consulting the Assembly on such proposals, may lay down the provisions whose adoption it shall recommend to the Member States in accordance with their respective constitutional rules.

The constitutional rules to which Article 201 of the Treaty refers are

the rules in effect in most of the Member States which require that the arrangements involved be submitted to the national parliaments for approval. The Commission took into account the fact that certain national parliaments have linked this approval to the reinforcement of the powers of the European Parliament. To guarantee application of the procedure provided for in Article 201, the Commission therefore included in its proposals the ensemble of problems linked to the reinforcement of the powers of the European Parliament. The Commission also reflected the will of the Council which, on December 23, 1963, decreed as follows:

On the occasion of its discussion of the functioning of the European Agricultural Guidance and Guarantee Fund, the Council emphasized the great importance that it attaches to the problem of the reinforcement of the budgetary powers of the Assembly. At its February 1964 session, it will take up this question as well as the reports that it has received on the "fusion" and on the increasing of the role of the Assembly.

The Commission's Proposal

On the basis of the foregoing mandates and Community procedure, the EEC Commission proposed on March 31, 1965 to the Council of Ministers the application of the financial regulation for a two-year period with the progressive takeover by the Community of financial responsibility for the agricultural policy. The Commission proposed that the single market system be applied after July 1, 1967. Thus, refunds on exports to non-member countries, market support, and other measures would be entirely financed by the Community, provided these measures were carried out according to Community rules.

At the same time, the Commission proposed that steps be taken to ensure to the Community independent revenues from non-agricultural sources (i.e. customs duties) as well as agricultural revenues. In view of the large sum of money potentially involved ($2.4 billion per year), the Commission also proposed a decision-making process in which the European Parliament would participate in addition to the Council of Ministers and the Commission.

The Commission considered that the market organization and single prices for which decisions were still needed would be agreed upon before

July 1, 1967. The customs union would also be completed on that date.

The Commission proposals on the financial regulation, independent revenues, and strengthening the powers of the European Parliament were linked to each other. The European Parliament discussed the Commission's proposals and adopted a resolution backing them on May 12, 1965, though several modifications were proposed. The Foreign Affairs Committee of the lower house of the Netherlands Parliament, with all five major parties joining together, adopted on June 9 a resolution supporting the European Parliament's position. The Bundestag on June 30 unanimously asked the German government to support the European Parliament's position on the Commission proposals.

also certain basic errors or ambiguities that appear in the treaties on the economic union of the Six.1" That is why, sooner or later, the crisis was inevitable.

The three treaties, which respectively set up the E.C.S.C., Euratom and the Common Market, were concluded before France's recovery in 1958.20 They therefore made allowance primarily for what the others requested. Thus the E.C.S.C., independently of the French-German rapprochement which it was meant to express, consisted basically in restoring to Germany the disposal of its coal and steel and in giving Italy, which has a natural lack of coal and iron, the opportunity to obtain them inexpensively so that it could, in turn, provide itself with a large metallurgical industry. As regards Euratom, that institution was designed to pool everything that had been or was to be done in the field of atomic energy-of which France owing to the early start she had made, was to provide the greatest share-and then to control the production of fissile materials with a view to preventing their military use, although, of the Six, our country alone was in a position to manufacture nuclear weapons. As for the Treaty of Rome, lastly, it fully governed the conditions for the industrial community that was the prime concern of our neighbors, but in no way governed those for the agricultural common market, in which we were the most interested.

On the other hand, each of the three treaties instituted an appearance of an executive in the form of a commission independent from the States-although its members were appointed and remunerated by them-and an appearance of a legislature in the form of an Assembly bringing together members of the various parliaments, yet without their electors' having given them any mandate that was not national. This claim held by a technocracy, for the most part foreign, destined to infringe upon France's democracy in settling problems that dictate the

19 See ante, docs. IV-34-35.

20 For citations to the texts of these treaties, see footnote 5 to doc. IV-31, ante.

very existence of our country, obviously could not suit our purposes once we were determined to take our destiny into our own hands.

Who can ignore that the idea of grouping the States of Western Europe together from the economic and, I might add, political standpoints has long been ours? To verify this, one need only turn back to the statements I made on this subject during and immediately following World War II, at a time when no one else was speaking about it, and then on numerous solemn occasions, but also to all the deeds actually accomplished toward this end by my Government. As far as the economy is concerned, we indeed think it is true that the organized adjustment of the respective activities of the countries located on both sides of the Rhine and the Alps corresponds to the fact that they are close neighbors; that, from the standpoint of production, they are both` similar and complementary; and that it is in keeping with the conditions of our times to create entities more vast than each of the European States. In addition, France, who is making great strides forward and whose currency has become one of the world's strongest, has every reason to cast off her former protectionism and to open herself progressively to competition. That is why, for seven years, we have very actively helped to build the Economic Community, which was created in theory in 1957, but until 1959 existed only on paper, because the chronic deficit in the French balance of payments prevented the organization from taking a start on anything other than its discussions. But what we wanted yesterday and what we want today is a community that is fair and reasonable.

Fair: that means that agricultural products, allowing for their own particular conditions, should be included in the Common Market concurrently with industrial goods. Reasonable: that means that nothing which is important at present in the organization, and later in the operation of the Common Market of the Six, should be decided and, even more, applied, except by the responsible public authorities in the six States, that is, the Governments controlled by the Parliaments.

Now, we know-heaven knows that we know!-that there is a different concept of a European federation in which, according to the dreams of those who conceived it, the countries would lose their national personalities, and in which, furthermore, for want of a federator-such as, in the West, Caesar and his successors, Charlemagne, Otto I, Charles V, Napoleon and Hitler tried to be, each in his fashion, and such as, in the East, Stalin tried to bewould be ruled by some technocratic, stateless and irresponsible Areopagus. We know also that France is opposing this project, which contradicts all reality, with a plan for organized cooperation among the States, evolving, doubtless, toward a confederation. This plan alone seems to France to be consistent with what the nations of our continent actually are. It alone could one day make possible the adherence of countries such as Britain or Spain which, like ours, could in no way accept the loss of their sovereignty. It alone would make the future entente of all of Europe conceivable. However— and whatever the ulterior motives concerning political theories might have been-it could seem that the very long and meticulous negotiations in Brussels were on the verge of a successful conclusion. Of course, we had the utmost difficulty in persuading our partners to agree in practice to making agricultural products an integral part of the Community. Now, everyone knows that this is a sine qua non to us, for, if this condition is not met, we would remain burdened with the very heavy weight that supporting our agriculture represents for us-more than for our neighbors and we would consequently be handicapped in industrial competition. We therefore felt obliged, in January 1962, to agree to passage to the second stage of the Treaty, that is, to a substantial reduction in customs barriers, only on condition that the commitment to settle the agricultural problem, particularly from the financial standpoint, be formally entered into by the Six no later than June 30 of this year, on terms and according to a timetable that were explicitly stipulated. While there were some tears and some gnashing of the teeth at that time, we were able, at the last minute, to gain the support of our partners and we had reason to be

lieve that they would honor their commitments on schedule.

On the other hand, while noting that the very heavy international apparatus built at great cost around the Commission was often overlapping with the competent services of the six Governments, as the work progressed we had officially recognized the competence of the Community's civil servants and had noted that they refrained from excessive infringements on the only responsibilities that were valid, that is, those of the States.

It was too good to continue to the end. For in Brussels on June 30, our delegation came up against a refusal with regard to final drafting of a financial regulation in accordance with the commitments made. A little earlier, moreover, the Commission, suddenly emerging from its political reserve, had formulated on the subject of this regulation conditions intended to give itself its own budget, which would have amounted to as much as four billion dollars, with the States' handing over to it the levies and customs receipts that would have made it literally a major independent financial power. It is true that, according to the authors of the draft, this enormous budget, which the States would supply at the expense of their taxpayers, but which they would not control, would be subject to examination by the European Assembly. But the intervention of this body, which is essentially consultative and whose members have never, in any country, been elected for that purpose, would only aggravate the usurpatory character of what was demanded. Be this as it may, the combination-premeditated or not-of the supranational demands of the Brussels Commission, of the support that several delegations declared themselves ready to give them and, finally, of the fact that some of our partners at the last moment went back on what they had previously accepted, forced us to bring the negotiations to a close.

I must add that in the light of this event, we more clearly measured the situation in which our country would risk finding itself if one or another provision initially provided for by the Rome Treaty were actually applied. Thus, in the terms of the text, the