HC Deb 31 March 1960 vol 620 cc153-4W
Mr. Shepherd

asked the Chancellor of the Exchequer whether he will make a statement about the outcome of the review by the Organisation for European Economic Co-operation of the European Monetary Agreement of 1955.

Mr. Amory

Yes. In December, 1959, the Council of the O.E.E.C. agreed that Part II of the Agreement, relating to the Multilateral System of Settlements and due for review after one year, should continue in force without major changes as from 1st January, 1960. At the same time, a number of amendments to the Agreement were decided upon, subject where appropriate to ratification by the Governments concerned. A few amendments had already been made last summer to take account of the accession of Spain to the Agreement.

A White Paper containing the text of these amendments is available in the Vote Office. Most of them are of a relatively minor and technical character, designed to improve the working of the Agreement by removing ambiguities or easing administration. But there are two more important changes to which I should like to draw attention.

In Article 3, the scale of total contributions to the European Fund by the Contracting Parties has been altered so that the United Kingdom's contribution is reduced from 86,575,000 units of account to 60,575,000 units of account (that is, from just under £31 million to just over £21½ million), while there have been increases in the contributions of Italy, from 15 million to 25 million units of account, and of France and Germany, each from 42 million to 50 million units of account. These changes apply as if they had been made when the Agreement came into force at the end of 1958; and calls on contributions already made have been adjusted accordingly, the United Kingdom having received back just over £1 million in gold.

The adjustments I have mentioned are regarded as being justified by the changes which have taken place since 1955 in the relative economic situations of the four countries concerned. They do not exclude the possibility of a new general basis for calculating the contributions being adopted at an appropriate time.

The second major change is the addition to the Agreement of a new Article 7 bis enabling the European Fund to obtain special credits from Contracting Parties on conditions to be determined by the O.E.E.C. The object of this is simply to provide a legal basis for the Fund to accept special means of finance contributed voluntarily by one or more Members if this were found to be desirable, rather than having to rely exclusively on its existing assets and on the calling up of contributions under Article 4. A similar purpose was served by Article 10 bis of the European Payments Union Agreement.

A special credit under Article 7 bis would require a unanimous decision by the Council of the O.E.E.C. and therefore the assent of Her Majesty's Government.