§ Mr. Teddy TaylorTo ask the Chancellor of the Exchequer if he will make a statement outlining the powers which are available to the European Economic Community to seek overdraft loans from member states; and under what powers such demands have been met by Her Majesty's Government.
§ Mr. BrookeThe Commission is empowered to request overdraft facilities under article 12(2) of Council regulation 2891/77. This article allows the Commission to overdraw its accounts with member states to meet a prospective cash deficit. The member states share the overdraft in proportion to the estimated budget revenue due from each of them.
Member states are legally obliged to comply with properly constituted requests under article 12(2). The Government therefore meet such requests directly from the Consolidated Fund in accordance with article 2(3) of the European Communities Act 1972. Repayment of any drawing under the overdraft facility is made by deduction from future own resources payments. The article 12(2) facility does not affect the total amount which the Community is authorised to spend during the year.