THE EUROPEAN COUNCIL

ROME2 DECEMBER 1975

Documents in the dossier include:

The European Council in RomeIncludes preparatory work, conclusions, follow up statements

Reproduced from the Bulletin of the European Communities, No. , 1975

European Community Members to Issue EC Citizens a HEuropean PassportEuropean Community Background Information No. 41/1975

European Comm urn ty Information S ervi ceWashington DC

Declaration of Rambouillet17 November 1975

Department of State Bulletin, December 8 , 1975

. The EuropeanCouncil in Rome

1101. The European Council, consisting of theHeads of Government of the Nine MemberStates met in Rome on 1 and 2 December. TheMinisters for Foreign Affairs and the Commis-sion were also present.

Decisions were reached, the most important ofwhich concerned the Community s representationby one delegation at the North -South Confer-ence, establishment of May-June 1978 as thedate for election to the European Parliament, is-sue of a uniform European passport from 1978,the policy aspect of Community financing, andthe controls to be applied in that area. The Coun-cil also took a hard look at the Communityeconomic and social situation (with the Ram-bouillet Summit 1 and the Brussels Tripartite Con-ference2 in mind) and European Union (state-ment of Mr Tindemans, the Belgian Premier). Allthese matters were covered in a summary of con-clusions issued by the Chair after the Romemeeting.

European CouncilSummit Meetings

1102. The meeting which has just ended is thethird since the deliberations of the Heads of Gov-ernment when they assembled in Paris on 9 and10 December 1974.3 Glancing further back, thefirst year of this new practice highlights its spe-cific features and originality.

Unlike the Summits at The Hague (1 and 2 De-cember 1969), in Paris (19 and 20 October 1972)

and Copenhagen (14 and 15 December 1974), and

again unlike the meeting of Heads of Govern-

ment in December 1974, which was new instyle , the establishment of what was soon term-ed the ' European Council' was a response toclear-cut problems.

The Communique issued in Paris on 10 Decem-ber spelt these out:

European Council

Recognizing the need for an overall approach tothe internal problems involved in achieving Eur-opean unity and the external problems facingEurope, the Heads of Government consider it es-sential to ensure progress and overall consistencyin the activities of the Communities and in thework on political cooperation.

In practical terms, and to attain these objectives

the Paris communique indicated:

The Heads of Government have therefore decid-ed to meet , accompanied by the Ministers of For-eign Affairs, three times a year and, whenevernecessary, in the Council of the Communitiesand in the context of political cooperation.

The administrative secretariat will be provided forin an appropriate manner with due regard for ex-isting practices and procedures.

In order to ensure consistency in Community ac-tivities and continuity of work , the Ministers ofForeign Affairs, meeting in the Council of theCommunity, will act as initiators and coordina-tors. They may hold political cooperation meet-ings at the same time.

These arrangements do not in any way effect therules and procedures laid down in the Treaties orthe provisions on political cooperation in theLuxembourg and Copenhagen Reports. At thevarious meetings referred to in the preceding para-graphs the Commission will exercise the pow-ers vested in it and play the part assigned to itby the above texts.What was soon to be known as the EuropeanCouncil' , was born. Since then it has met in ac-cordance with the terms adopted by the Heads ofGovernment, in Dublin (10 and 11 March), Brus-sels (16 and 17 July) and lately in Rome (1 and2 December).

1 The full text of the Rambouillet Declaration is reproducedin Part 3: Documentation.

Points 1201 to 1205.Bull. EC 12- 1974 , point 1104.

Bull. EC 11-1975

European Council

The Rome Meeting

1103. The European Council met in the PalazzoBarberini , which dates back to the XVIIIth cen-tury. It was chaired by Mr Aldo Moro, Presidentof the Council , Italy, and Chairman of the Eur-opean Council. The other eight Heads of Gov-ernments were all present: Mr Leo Tindemans(Belgium), Mr Anker J0rgensen (Denmark), MrHelmut Schmidt (Federal Republic of Germany),Mr Giscard d'Estaing (France), Mr Liam Cos-grave (Ireland), Mr Gaston Thorn (Luxembourg),Mr Joop den Uyl (Netherlands), Mr Harold Wil-son (United Kingdom). All were assisted by theirForeign Ministers, except for Denmark whoseMinister for External Economic Relations was inattendance, Belgium (Mr Van Elslande was ab-sent) and Luxembourg, where Mr Thorn coveredboth functions. In the case of Belgium and Lux-embourg, the Head of Government was accom-panied by a ~enior official. The Commission wasrepresented by President Ortoli and Vice- Presi-dent Haferkamp.

The European Council met in restricted session the national or Community officials were not pre-sent at their discussions. At one point the Headsof Government called in the President of theCommission.

The Council first talked of economic and socialproblems: the conclusions to be drawn from theRambouillet Summit, the Community s economicand social situation and the Brussels TripartiteConference. It then considered the election ofParliament, the ' European Passport' , budgetarymatters, and European Union. It devoted most ofits second day to the Conference on InternationalEconomic Cooperation (North-South).

The Commission played an active part in the dis-cussions , and in preparing conclusions. This wasparticularly so in regard to the North-South dia-logue and the common energy policy commit-ments where the final decision for single Com-munity representation was taken on the strengthof a text proposed by President Ortoli.

Bull. EC 11- 1975

European Council

The results

1104. The Ministers' decisions and discussionswere covered in a ' summary of conclusionsdrawn up on the authority of the Chairman.There follows the published text:

The economic and social situation

The European Council discussed the develop-ment of the economic and social situation in theCommunity and again stressed the need for closeco-ordination to be maintained between the econ-oinic policies of the Member States in order toconsolidate the economic recovery which seemsto have begun and to improve the present levelof employment.

The European Council confirms the broad lineswhich emerged at the July meeting in Brusselsand which were echoed in the declaration issuedafter the Rambouillet Summit, concerning thedesirability of closer international co-operationand of constructive dialogue among all thecountries concerned to overcome current econ-omic problems.

The European Council has noted with satisfac-tion the follow-up to the Tripartite Conferenceheld in Brussels on 18 November and the deci-sion to instruct the Commission of the EuropeanCommunities , in contact with both sides of in-dustry, to study the main problems discussedand to prepare a report with '"a view to a futuremeeting of that Conference.

Community budget and financing

The European Council carried out a thoroughexamination of the problems connected with thesupervision of Community expenditure and theCommunity s budget policy.

The Council agreed on the need for more effec-tive financial control over Community expendi-

European Council

ture and stated that it was in favour of the sug-gestions made by the Heads of Government ofthe United Kingdom , the Federal Republic ofGermany and Ireland and the proposals of theCommission being examined expeditiously.

The President of the Council and the Presidentof the Commission were invited to make contactwith the President of the European Parliamentwith a view to examining the role which that In-stitution might play in controlling Communityexpenditure by means of a Committee or Sub-Committee.

The Heads of Government agreed to make everyeffort to ensure the early completion of the pro-cedure for the ratification of the Treaty setting upa European Court of Auditors signed on 22 Julylast in Brussels, with a view to enabling theCourt to commence activities during 1976.

The European Council noted with satisfactionthe information communicated by the Presidentof the Commission regarding the strengtheningwhich had taken place to date in the powers ofthe Member of the Commission responsible forthe budget without prejudice, however, to theprinciple of the collective responsibility of theCommission as laid down in the Treaties.

With reference to the agreement reached at VillaMarlia and formally adopted by the Councilmeeting in Brussels on 5 and 6 November re-garding the annual joint meeting of Ministers forForeign Affairs and Ministers for Finance carry out an overall assessment of Communitybudget problems , the European Council considersthat discussions at such meetings should concen-trate on general Community policy, ensure great-er consistency as regards policies to be followedand budget decisions and allow better distributionof Community resources to be achieved bymeans of the gradual introduction of multiannualexpenditure forecasts. The discussion relating tonext year should take place on the basis of aCommissiol). communication, before the end ofApril.

European Council

The European Council noted the Commissionintention to submit to the Council proposals con-cerning the use of the European unit of accountin the Community budget.'

Elections to the European Parliament

The European Council is agreed that elections tothe European Parliament shall take place on asingle date in May or June 1978.

Any country which at that date is unable to holddirect elections shall be allowed to appoint its re-presentatives from amongst the elected membersof its national parliament.

The European Council noted Mr Wilson s state-ment that the United Kingdom Government re-quired a further period for internal consultationsbefore adopting a final position regarding the datefixed , and the conditions set by Mr J0rgensen fordirect elections to the European Parliament inDenmark.

The European Council instructed the Council ofMinisters to continue examination of the pro-blems encountered and to submit a report whichwill enable the text of the Convention on elec-tions to the European Parliament to be finalizedat the next European Council.'

Passport Union

The European Council is agreed on the intro-duction of a uniform passport which may issued as from 1978.

To that end, the European Council asks theCouncil (Ministers for Foreign Affairs) to resolveall outstanding questions in this area.The European Council also asks the Council(Ministers for Foreign Affairs) to continue workon the abolition of frontier controls and on theharmonization of conditions of entry into andabode in the Member States.

Bull. EC 11- 1975

European Council

Communication from Mr Tindemanson the accomplishment of his mission

The European Council heard a statement by MrTindemans, Prime Minister of Belgium on theaccomplishment of his mission of preparing a re-port on European Union. As agreed , a copy ofthis report will be sent to all Governments beforethe end of the year.

Conference on internationaleconomic cooperation

I. Basic problems

The Commission will submit proposals and theCouncil decide as soon as possible on appropriatemechanisms to protect existing sources and en-sure the development of alternative sources ofCommunity energy, on reasonable economic con-ditions and also to encourage conservation in theuse of energy.

II. Procedure

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

(b) The Presidents of the Council and the Com-mission will act as spokesman for the Commu-nity.During the ministerial conference , the Chairmanof the C9mmunity delegation will be able to in-vite the representatives of two Member States tosubmit further comments in the light of their ex-perience and in accordance with the mandate ad-opted.

(c) In each commission , the spokesmen for theCommunity shall be assisted by a Communitydelegation comprising representatives of theMember States.

(d) It may be agreed in the framework of the

Bull. EC 11- 1975

European Council

Community co-ordination procedure that a mem-ber of the Communities' delegation be invited bythe Chair to comment on specific questions inthe context of the mandate. These statementsshall not conflict with the agreed Communityposition.

(e) As the dialogue proceeds , the mandate willbe further developed in accordance with theCommunity procedure.

Other business

The European Council adopted a proposal by thePrime Minister of the United Kingdom thatCommunity Ministers for the Interior (or Minis-ters with similar responsibilities) should meet todiscuss matters coming within their competencein particular with regard to law and order.

The European Council also discussed the pro-blems posed by the shortage of oil and steps tobe taken in that connection. It also consideredthe compilation of the list of industrialized coun-tries who should be invited to attend the North-South Conference.

Community reactions

1105. The results of the Rome meeting werethe subject of largely favourable comment. Theinitial Community reactions were as follows:

Commission

1106. Following the Commission meeting of December, the Spokesman declared in substancethe following day:

President Ortoli and Vice-President Haferkampwho represented the Commission in Rome , sum-marized at the Commission meeting the resultsobtained and the course of the Council's work.

European Council

The Commission was pleased that three big ad-vances had been secured:

(i) direct election to Parliament, which washighly significant politically and an expression ofthe unanimous resolve to push on the construc-tion of Europe;

(ii) in keeping with the Commission s proposals,

the European Council agreed to accord budget is-sues their true political stature;

(iii) the Community single representation

Paris at the Conference on International Econ-omic Cooperation , was of the utmost politicaland institutional importance; it strengthened theCommunity authority and credibility, and itsdetermination to win through to a common en-ergy policy.

Yesterday the Commission and today the EnergyCommittee started to appraise moves in that di-rection, bearing in mind the next critical dates(Council meeting of 9 December arid lEA meet-ing on 18 and 19 December).

Mr Spinelli said:In deciding that elections to the European Par-

liament will take place on a single date in 1978the Heads of Government , seventeen years afterthe Treaty of Rome took effect, have finallyyielded in the long battle , waged on a wide pop-ular front , to democratize the Community.

The elections can be a milestone of Communityhistory because , by politically revitalizing integra-tion, they will help to break up the collusion ofbureaucracies and finally involve the citizens inthe construction of Europe.

European Parliament

l1a7. Mr Georges Spenale , President of the Eur-opean Parliament , made the following statementon the outcome of the European Council meet-Ing:

European Council

The commitment by seven Heads of State orGovernment of the Europe~n Community to dir-ect e~ections to the European Parliament inMay-June 1978 is unquestionably one of themost positive results of the European Council inRome.

The two countries not yet committed to that datedo not oppose the principle of European elec-tions. It is quite probable therefore, that they willcome round to the same position by 1978. Thisseems all the more likely in that these two coun-tries have a great parliamentary tradition andhave consistently pressed for greater democracyin the Communities.

The European Parliament continues to attachgreat importance to the organization of Europeanelections on the same date in all Communitycountries , for political and psychological reasons.

At all events , the European Council's commit-ment to direct elections must be the signal for ageneral mobilization of political forces and publicopinion in all the countries concerned. There is aconsiderable amount of preparatory w.ork to bedone if these elections are to be held in time.The " count -down starts today!

The Council of Ministers of the European Com-munity must now adopt the draft conventionsubmitted to it by the European Parliament.

The decision on single representation for the Eur-opean Community at the North-South dialogueis, of course, the other encouraging feature ofthis European Council.

This decision averts a grave threat to Commun-ity solidarity in a field which is vital to Europefuture.

Finally the creation of a European Passport in1978, year of the elections by universal suffrage,should be welcomed. These two measures on dif-ferent but complementary fronts, will create astronger sense of European identity.

Bull. EC 11-1975

D m

EUROPEAN COMMUNITY INFORMATION SERVICE

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

BAC KGROUND NOTE

No 0 4 / 1 975

December 4, 1975

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

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

The Commun i ty I S nine membe r count r i es have dec i ded to rep ace nat i ona passports with a single type of European passport by 1978 as the fi rst steptoward a passport union~ Once this union has been completed , citizens of the

N i ne" wi 1 1 be ab to t rave 1 f rom one end of the Commun i ty to the othe r wi thoutpassing through customs0 For Americans , it wi l mean a single customs check onentering the fi rst Community country visited and one on leaving the last -- twopassport stamps instead of 14~ (Belgium , the Netherlands , and Luxembourg havea 1 ready ended passport checks

~ )

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

The passport dec is i on was made at a meet i ng of the Commun i tv members I headsof State or Government, foreign ministers , and EC officials in Rome on December1-2" The group, known as the II European Counei 1 " also discussed

the election of the Community s Assembly, known as the "European Parl iament,by d i reG t un i ve rsa 1 surf rage

the Commun i tv I S econom i c and soc i a 1 cond i t ionthe Community s budget and financial arrangementsthe December 16 Paris Conference on International Economic

~ a re po r t, due b the end 0 t his me nth , 0 n b u i 1 din 9 a f u 1 1Cooperat ion

Eu ropean Un i on ~ II

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

.... 2

What is the European Counci

The European Counc i 1 was born at the December 1974 Summi t of- the Nine when

the heads of Government dec i ded that more frequent but ess forma 1 meet i ngs

at the hi ghes t po 1 i t i ca eve 1 cou 1 d speed up the Commun i ty ' s dec i s i on-mak i ng

process. The Community s usual decision-making process -- where the Commission

proposes and the Counc i 1 enacts -- often bogs down in techn i ca 1 i ties and

ba rga i n i n9 .

rect E ec t ions to the Pa rl i ament

The fi rs t 1 i ne of the Common Ma rkets found i ng treaty says that the membercountries are determined to lay the foundation of an ever closer union among

the peoples of Europe. " The di rect election of representatives to the European

Parl iament wi 1 1 be a cornerstone of that Union. It wi 1 1 give the peoples of Europe

for the fi rst time a di rect say in the way the Community is run.

The European Parl iament now has 198 members appointed by and from the nationallegislatures. This procedure was, however, always considered temporary. The

Parl iament itself was to and did make proposals for the election of its membersby d i feet un i versa 1 suffrage. On y on Janua ry 14, 1975, h~ever, did the Pa r1 i ament

adopt a new raft convent i on for di rect el ect tons tak i ng into account the th reenew members (Oenma rk, I re 1 and , and the Un i ted Ki ngdom) Th is convent i on must now

be unan i mous 1 y adopted by the EC Counc i 1 of M in is ters and rat i f i ed by the nat i ana

eg i s atu res

The European Counc i 1 smoothed the way for camp et i on of the convent i on

secu ring the Nine I S ag reement on two deta i 1 s

that elections wi l be held on a single date between May and June 1978

that unti 1 the United Kingdom and Denmark work out internal arrangements, thosecountries can continue to appoint members of the European Parl iamente

The di rectly elected Parl iament wi 1 1 have 355 members who sti 1 1 hol d officefo r five yea r s .

The Commun i ty I S Econom i c and Sac i a 1 Cond i t ion

The Eu ropean Counc i 1 met dur i ng Eu rope I S wors t recess ion since the wa r ~ The

Community s unemployed number 5, 000, 000, more than 4~ 5 per cent of the labor force~

A 1 mas t a th i rd of the unemp eyed have jus t eft schoo 1 $ Thousands of. fore i workers have returned to the i r home count r i es, and 1 500, 000 workers a re work i n9

short time~ These conditions pose a threat to the Community s social stabil itY$

To deal with this situation, the European Counci l agreed that member countries

had no choice but the closest consultation over economic pol icy both within the

Community and with the rest of the worldo

The 0 U n c i 1 a 1 s 0 ex pre sse d 5 a tis f a.c t ion wit h the res u 1 t 5 0 f 1 a 5 t mo nth'

Tripart ite Conference" organized by the EC Commission and attended by representativesof labor, management, and government The conference asked the Commission to holdmore such conferences so that al l parties involved in industry could explore current1 abor , sac i a 1 ~ and economi c cond it i ens

3 -

The Commun i ty I Budget and Finane i ng

, . " - . '-.

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

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

The Counc i 1 sa i d it wou 1 d 1 i ke a number of budget tighten i ng proposa 1 5

studied soon and asked the EC Commission and the Counci l to get the Parl iamentlideas on how the latter s budgetary powers could be expanded The Counci l alsoag reed

to speed up the rat fi cat i on process for the Treaty creat i ng a European Courtof Audit~ signed on July

to h old j 0 i n t an n u 1 me tin 9 5 0 f the i r fin a nee and for e i 9 n m i n i s t e r 5 for ageneral review of the Community 1 5 budget to improve al location of funds betweend i ffe rent po 1 i cy areas Eventua 1 y, these meet i ngs wou 1 d ead to budget forecas

eve r a 1 time s ear

The IINorth-South" Dialogue

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

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

Bu i ding the Eu r~.E~~,n Un ion

The Counci l also heard an interim report by Belgian Foreign Minister Leo Tindemanson the chances for bui lding the Communi s achievements so far into a EuropeanUn ion The report , commi ss i oned at the 1973 Copenhagen Summi t, is to be camp etedth i 5 month

Preparing the report, Tindemans has talked with a wide range of pol iticallabor , and business leaders and has also received the views of the CommunityCourt of Justice ~ the European Parl iament, the Commission , and the Economic andSocial Commi ttee ~ an advisory body to the Commission and the Counei 1 ~

-- 4 -

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

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

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

The next European Council is scheduled for Luxembourg on March 8-9, 19760

leaders of Maior Industrial Democracies Discuss Economic Issues

President Ford and President Valery Gi.card d'Estaing of France, Chancellor HelmutSchmidt of the Federal Republic of Germany,Prime , Minister Aldo M oro Italy, PrimeMinister Takeo Miki of Japan and Prime

Minister Harold Wilson 01 the United King-do'm 'met at the Chatea~t de Rambouillet nearPa1"is November 15-17. Follo~ving are re-marks 'made by President Ford at the con-clus'ion the meeting, the text theDeclaration of Rambouillet issued on Novem-ber and opening remarks from a newsconference held by Secretary Kissinger andSecretary of the Treasury William E. Sim01~aboard Air Force One on November 17

route to Washington.

REMARKS BY PRESIDENT FORD

Weekly Compilation of Presidential Documents dated Nov.

Mr. President: I wish to express my ap-preciation for the gracious hos'pitality ofyou and the French Government and theFrench people. My appreciation also goes tomy colleagues for the spirit of good will, thespirit of friendship, which they have dem-

onstrated during this meeting.I t has been a highly successful meeting

ill every respect.In our sessions, we have covered the range

of economic issues of concern to the indus-

trialized world and challenging our demo-cra tic societies.

These meetings have been rewarding ina number of important ways. They havedeepened our understanding and apprecia-tion of our mutual economic interdepend-ence. They have enabled us to harmonizeour views on key issues, and they havestrengthened our determination to solve the

problems that we confront. Finally, and most

December 8, 1915

importantly, they reaffirmed our mutualconfidence in a sustained and full recoveryfrom the deepest recession since the 1930'

Perhaps our most important accomplish-ment over the past several days has beenour recognition that the objective of sus-tained, stable economic growth will be facili-ta ted by our common efforts. As leaders ofmajor democratic nations, we reached sub-stantial agreement on a number of issuesconcerning monetary policy, trade, energy,and our relations with the developing worldas outlined in our joint declaration.

Over the past three days, in this beautifulsetting, we have found a new spirit, a spiritof coopera tion and confidence stemmingfrom a deeper understanding of our commondestiny and our joint conviction that freepeoples can master their future.

As a result of the work that we havestarted, the people of our countries can lookforward to more jobs, less inflation and agreater sense of economic security.

We conclude this conference with a senseof determination to carry forward this workwhich has been so promisingly begun.

TEXT OF D.ECLARA TION OF RAMBOUILlET

The Heads of States and Governments ofFrance, Federal Republic of Germany, Italy,Japan, the United Kingdom of Great Britainand Northern Ireland and the U ni ted Statesof America met in the Chateau de Ram-bouillet from 15th to 17th of November1975, and agreed to declare as follows:

1. In these three days we held a searchingand produ.ctive exchange of views on theworld economic situation on economic prob-lems common to our countries, on theirhuman, social and political implications, and

805

on plans for resolving them.2. We came together because of shared

beliefs .and shared responsibilities. We areeach responsible for the government of anopen, democratic society, dedicated to indi-vidual liberty and social advancement. Oursuccess will strengthen, indeed is essentialto democratic societies everywhere. W e areeach res'ponsible for assuring the prosperityof a major industrial economy. The growthand stability of our economies will help theentire industrial world and developing coun-tries to prosper.

3. To assure in a world of growing inter-

dependence the success of the obj ectives setout in this declaration, we intend to play ourown full part and strengthen our efforts forcloser international cooperation and con-structive dialogue among all countries, tran-scending differences in stages of economicdevelopment, degrees of resource endow-men t and political and social systems.

4. The industrial democracies are deter-mined to overcome high unemployment, con-tinuing inflation and serious energy prob-lems. The purpose of our meeting was review our progress, identify more clearlythe problems that we must overcome in thefuture, and to set a course that we willfollow in the period ahead.

5. The most urgent task is to assure therecovery of our economies and to reduce thewaste of human resources involved in un-em.ployment. In consolidating the recoveryit is essential to avoid unleashing additionalinflationary forces which would threaten itssuccess. The objective must be growth thatis steady and lasting. In this way, consumerand business confidence will be restored.

6. We are confident that our present poli-cies are compatible and complementary andtha t recovery is under way. Neverthelesswe recognize the need for vigilance andadaptabili ty in our policies. We will notallow the recovery to falter. We will not ac-cept another outburst of inflation.

7. We also concentrated on the need fornew efforts in the areas of world trademonetary matters and raw materials, includ-lng energy"

8. As domestic recovery and economic ex-

806

pansion proceed, we must seek to restoregrowth in the volume of world trade. Growthand price stability will be fostered by main-tenance of an open trading system. In aperiod where pressures are developing for areturn to protectionism, it is essential forthe main trading nations to confirm theircommitment to the principles of the OECD(Organization for Economic Cooperation andDevelopment) pledge and to avoid resortingto measures by which they could try to solvetheir problems at the expense of others,wi th damaging consequences in the eco-nomic, social and political fields. There is responsibility on all countries especiallythose with strong balance of payments posi-tions and on those with current deficits topursue policies which will permit the expan-sion of world trade to their mutual advan-tage.

9. We believe that the multilateral tradellegotiations should be accelerated. In ac-cordance with the principles agreed in theTokyo Declaration they should aim achieving substantial tariff cuts, even elimi-nating tariffs in some areas, at significantlyexpanding agricultural trade and at reduc-ing non-tariff measures. They should seekto achieve the maximum possible level oftrad e Ii beraliza tion therefrom. We proposeas our goal completion of the negotia tionsin 1977.

10. W e look to an orderly and fruitful in-crease in our economic relations with social-ist countries as an important element inprogress in detente and in world economicgrowth.

11. We will also intensify our efforts toachieve a prompt conclusion of the negotia-tions concerning export credits.

12. With regard to monetary problems,we affirm our intention to work for greaterstability. This involves efforts to restoregreater stability in underlying economic andfinancial condi tions in the world economy.At the same time, our monetary authoritieswill act to counter disorderly market condi-tions, or erratic fluctuations, in exchangerates. We welcome the rapprochementreached at the request of many other coun-tries, between the views of the U.S. and

Depa rtment of State Bu lIeti n

. .

France on the need for stability that thereform of the international monetary sys-tem must promote. This rapprochement willfacilitate agreement through the IMF (In-ternational Monetary Fund) at the nextsession of the Interim Committee in Jamaicaon the outstanding issues of internationalmo11etary reform.

13. A co-operative relationship and im-proved understanding between the develop-ing nations and the industrial world fundamental to the prosperity of each. Sus-tained growth in our economies is necessaryto growth in developing countries: and theirgrowth contributes significantly to health inour own economies.

14. The present large deficits in the cur-rent accounts of the developing countriesrepresent a critical problem for them andalso for the rest of the world. This must be

dealt with in a number of complementaryways. Recent proposals in several interna-tional meetings have already improved thetmosphere of the discussion between de-

veloped and developing countries. But earlypractical action is needed to assist the de-veloping countries. Accordingly, we will playour part, through the IMF and other appro-priate international fora, in making urgentimprovements in international arrangementsfor the stabilization of the export earningsof developing countries and in measures assist them in financing their deficits. In thiscon text, priority should be given to the poor-est developing countries.

15. World economic growth is clearlylinked to the increasing a vailabili ty energy sources. We are determined to securefor our economies the energy sources neededfor their growth. Our common interests re-quire that we continue to cooperate in orderto reduce our dependence on importedenergy through conservation and the de-velopment of alternative sources. Throughthese measures as well as international co-

operation between producer and consumercountries, responding to the long term inter-ests of both, we shall spare no effort in orderto ensure more balanced conditions and aharmonious and steady development in the

world energy market.

December 8, 1915

16. We welcome the convening of theConference on International Economic Co-

operation scheduled for December 16. will conduct this dialogue in a positive spiritto assure that the interests of all concernedare protected and advanced. We believe thatindustrialized and developing countries alikehave a critical stake in the future suc~essof the world economy and in the co-operativepolitical relationshirps on which it must bebased.

17. We intend to intensify our cooperatiol1on all these pro blems in the framework ofexisting institutions as well as in all therelevant international organizations.

OPENING REMARKS FROM NEWS CONFERENCE

OF SECRETARIES KISSINGER AND SIMON

Secretary Kissinger

The overall purpose of the meeting was tobring together the leaders of the industrialdemocracies at a time when their economieswere in various states of recession.

When it was proposed, it was suggestedthat these leaders ought to meet to giveconfidence to their peoples and to convey

their peoples the sense that they were ill

control of their future and were not simplywaiting for blind forces to play themselvesout.

So we thought it was a matter of great'importance; one, because for two years haye been maintaining that the political andeconomic cohesion of the industrial democ-racies was central to the structure of thenon-Communist world; secondly, because webelieved that the interdependence of theseeconomies makes isolated solutions impos-sible; and thirdly, because we ' believed thatthere were a number of concrete issues onwhich work had to begin and in which com-mon action was im.portant.

We spent a great amount of effort withinour government to prepare for this meeting,and there are always many stories whenthere are di5agreements in the government;

Text from press release 572, which also includesquestions and answers.

807

but this has been an unusual occasion, anunusual way in which all the departmentsworking together worked out common posi-tions, common philosophies, and achievedthe basic proposals that were put before theother leaders.

When this conference was called, I thinkit is safe to say that some of our friendswanted to use it as an occasion to blame us,or at least to imply that their economic diffi-culties could be solved primarily by Ameri-can efforts, and others may have had theidea that, especially in the monetary fieldit could be used to bring about rapid solu-tions in which the heads of governmentoverruled the long negotiations that hadgone on.

But as the preparation developed, I thinka more sober spirit grew also, and one of ourbig themes was that economic recovery wasmeaningless if it started another spurt ofinflation and that what we had to aim forwas stable growth.

The second theme we had to get across that the American economy was doing welland that therefore the concerns of othercoun tries tha t our recovery was too slowfor their own was unj ustified.

Thirdly, we had in a number of areas,specific ideas on how the interdependence ofthese countries ~ould be carried out-in thefield of trade, irl the field of economic rela-tions with the Socialist countries, in thefield of monetary affairs, in the field ofenergy, and in the field of development.

The discussions took place in a really un-usually harmonious spirit. The fears whichsome of us had that the others would bringpressure on us to accelerate what we thinkis a well-conceived economic program provedunfounded, and after the President made hisextensive intervention of the first day ex-plaining our economic program, the othercountries substantially accepted this andindeed, seemed to be appreciative of it.

I think this was a very important eventbecause it meant that they had more con-fidence that in looking ahead to their ownfuture they could count on steady growthin the United States and since everybodyagreed that a substantial percentage of the

808

recession was psychological, had the sensethat a consensus emerged that this confi-dence that developed in our ability to handlethe economic problems was a very major fac-tor. In fact, the confidence of the leaders this process was shown by the fact thatthey would talk about general principles andthen turned over the drafting to either Min-isters or experts and that the leaders onlyspen t about an hour on the declaration. Atfirst we didn want any declaration becausewe were afraid we would spend our wholetime drafting it; and it didn t turn out thatway, and that was important.

In the field of trade, there was an agree-ment, first, that the negotiations on themultilateral trade negotiations should completed next year; secondly, a commit-ment by all of the countries there to bringabout a substantial reduction of trade bar-riers, including in the agricultural field andno attempt to hide behind Community man-dates or other obstacles.

There was also an agreement to accel-erate or to foster the negotiations concern-

ing export credits. Bill will talk about theagreemen ts in the monetary field-which putan end to a debate of years about the na-ture of the floating system and the relationbetween floating and stability, which shouldend in January in an agreement that shouldat least put the field of international financeon a more stable basis than it has been in . along time.

In the field of energy, there has been anagreement to cooperate closely or activelyon the alternative sources and on conserva-tion and I believe this will show up in theprogram of the International Energy Agen-cy, which is in the process of being negoti-ted and which we hope to conclude by

December 15.In the field of development we identified

the balance-of-payments deficits of the de-veloping countries, or their current accountdeficits, as one of the major problems onwhich we would work jointly, but we alsopointed out that there is a close relationshipbetween that and the action that is takenwi th respect to oil prices. So we believe thatthe consuming countries are in an excellent

Department of State Bulletin

position for the beginning of the talks on

international economic cooperation that arebeginning in the middle of December. Andwe agreed to work together in all existinginstitutions.

To sum up, this unusual meeting of theheads of government of the countries thatbetween them produce 70 percent of theworld trade represented a commitment tothe conception that our economic problems

were long term, that there were no quickfixes to them, that they required a steady

cooperative effort, that their political rela-tionship affected their economic rela tion-shi p, and that their economic rela tionshi p inturn assisted their political cooperation.

And so the free countries vindicated theconcept of their interdependence and laidout a program and a method for cooperationwhich we hope will accelerate the recoveryof all of the peoples as well as their coopera-tion with the less developed countries forthe benefit of everybody.But I think Bill ought to explain the

monetary agreement because that is per-haps the single most significant thing thathappened there.

Secretary Simon

There is no doubt that it was a significantagreement reached between the French andthe United States which, I believe and mosteveryone believes , is going to pave the wayfor agreement at the (IMF) Interim Com-mi ttee on overall monetary reform in J anu-ary. I think that the agreements that have reached are a fair and balanced compro-mise. Neither side won nor neither side lost.

Each has protected its very critical na-tional interests in spirit of cooperation.

We have sought to bring a convergence views, and this is important. What we aretrying to do is build and expand on theseareas of convergence, and as we succeed indoing this, the whole world community atlarge is going to benefit from this.Now, I think that the disparity of views

of the past few years between the Frenchand the United States in particular on vari-ous amendments to the articles of agreement

December 8, 1975

(of the IMF) has obscured the deep mutual-ity of interest to return to stable economicand financial conditions in the world andmore orderly and stable exchange rates, andthat is very significant because this instabil-ity that we have had contributed to as wellas resulted from tremendous institutionalfinancial strains.

Also, the instability created great prob-lems for many of the countries in the worldin taking care of the erratic price move-men ts and setting economic policies and re-storing stable growth in their own econo-m! es.

Now, having said this, because one mustlook at the fundamental cause of the prob-lem before we can begin to look for any ofthe solutions, which is important, it has beenclear that the French and the United Statesshare some fundamental agreements on themonetary system; there is no doubt aboutthat. We both agree that the diversity offinancial arrangements-the floating system,if you will-has served us well. Under thepresent circumstances, it is actually neces-sary to take care of the stresses and thestrains that have been brought about by thesevere inflation, recession, and of course theextraordinary oil increase.

So having identified the cause~, we thel1must set about in curing the fundamentalproblems of this economic instability, andtherefore the communique, as it said, dealtwith two aspects of the monetary issue:one, the operational and, two, the reform ofthe. system.

On the operational side we have reachedan understanding that to achieve durableand meaningful stability in the underlyingeconomic and financial conditions, we haveto provide for mutually cooperative and con-ciliatory policies among ourselves but thatnational domestic economic policies must in-deed be compatible. The world economy hassuffered from all of the ills that I havespokel1 about, and the underlying problemremains with the severe inflation and ofcourse the recession which was caused bythis inflation.

On exchange markets, we are going deal with erratic movements in exchange

809

rates, which of course create, again, an in-stability. Erratic movements can be definedas movements that have no underlying eco-nomic reason. Ours is not an attempt to pegany of the currency rates at artificial levels;but there are erratic movements in financialmarkets on occasion that are not directlyattributable to fundamental economic events,and at this point intervention policies willbecome mutually cooperative and compatibleto smooth out these unstable periods.

810 Department of State Bulletin

.... .......... ..............