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   INTRODUCTION
   1.   1992  will  be  a pivotal year in the development  of  the  European
        Community.  It  marks the final year of the enterprise  to  complete
        the  Single Market which revitalized the Community in 1985  and  the
        first year of the next step forward following the decisions taken by
        the  Maastricht European Council on Economic and Monetary Union  and
        on  Political Union.  These two features of 1992 will inevitably  be
        the major influences on the priorities of the Commission's programme
        for the year in which one historic undertaking must be completed and
        another begun.
   2.   This  double mission imposes on the Commission a need  for  rigorous
        selectivity  among  objectives not directly related to  the  central
        tasks.  There  will, nevertheless, be a number of vitally  important
        aims  to  be  pursued and tasks to be completed, some  of  them  the
        consequences of the successes of 1991.  Of particular importance are
        those  associated  with  the  growing  international  role  of   the
        Community in an unstable world, and the second package of structural
        and financial measures ("Delors II"), which will among other  things
        promote  the objective of economic and social cohesion  between  the
        Member States.
   3.   In  the Commission's view these factors dictate that  its  programme
        for 1992 should be built around three major priorities:
        -   The  Single  Market and flanking  measures,  particularly  those
            which are lagging in the social field.  The Single Market,  with
            the free movement of individuals, goods, services and capital in
            accordance  with the provisions of the Treaty, must be in  place
            by  1 January 1993.    This  applies not only  to  the  economic
            aspects but also to policies involving the elimination of border
            checks  in fulfilment of the compact between the  Community  and
            its  citizens.  The Community must also concern itself  in  1992
            with  ensuring that the Single Market will function  fairly  and
            efficiently with the minimum of bureaucratic intervention.
        -   The second package of structural and financial measures will  be
            presented  to  Parliament and Council early in  1992.  This  may
            include, firstly, an increase in the resources of existing Funds
            and  greater  flexibility in their  utilization;  secondly,  the
            creation  of a cohesion fund, which will give additional aid  to
            the  less  prosperous Member States in the essential  fields  of
            trans-European  transport  networks  and  the  environment;  and
            thirdly, proposals on Community financial measures, which  will,
            inter alia,  strengthen the link with Member States' ability  to
            pay.
        -   The  international  role  of the  Community.  With  the  world's
            political  map being redrawn, the Community has stood  out  even
            more  markedly in 1991 as a strong and stable factor,  promoting
            democratic values and the virtues of the market  economy.  There
            are a growing number of applications for full membership of  the
            Community.  The Commission's opinion on Austrian accession  will
            be  followed by opinions on the applications from Cyprus,  Malta
            and Sweden.  The Community has established much closer relations
            with  its Central and Eastern European neighbours thanks to  the
            signature  of  "Europe  agreements"  with  Poland,  Hungary  and
            Czechoslovakia and to the negotiations under way or planned  for
            improved  cooperation  with Bulgaria, Romania, Albania  and  the
            Baltic  States.  Substantial  programmes of  financial  support,
            technical  assistance  and food and humanitarian aid  have  been
            launched  for  this part of Europe.  In all, the  Community  has
            committed  ECU 9.5 billion, which means that the  Community  and
            its   Member   States  have  provided  the   lion's   share   of
            international   aid  to  these  countries.  The  Community   has
            negotiated,  subject to an important point of jurisdiction,  the
            agreement  on a European Economic Area with the EFTA  countries.
            It  has taken initiatives to encourage a peaceful settlement  of
            the  war in Croatia.  Outside Europe the Lom� IV Convention  has
            entered  into force.   Two important elements must be  stressed.
            Firstly, on principles, respect for human rights is now regarded
            as a basic element of development, development cooperation being
            closely  linked  to regard for and promotion  of  human  rights.
            Secondly, on policies, the Convention highlights the Community's
            contribution to the structural development of the ACP countries.
            The Community has strengthened relations with its Mediterranean,
            Asian   and   Latin   American   partners.  The    transatlantic
            declarations  with  the United States and Canada and  a  similar
            declaration   with   Japan   have   been   agreed.  All    these
            developments, combined with the results of Maastricht, mean that
            the Community in 1992 must be responsive, active and  adequately
            financed to tackle its growing international role.  And it  must
            seek  to complete the one major task left unfinished  in  1991 -
            the  Uruguay Round of trade negotiations - provided that a  fair
            and equitable balance is found.
   4.   More specifically, although important progress has been made on  the
        economic side of the Single Market, much remains to be done to  give
        it a political dimension.
        Much  of the economic framework is now in place.   Into it  must  be
        fitted  a  number of important decisions relating in  particular  to
        intellectual  property, involving the creation of a Community  trade
        mark  and  patent, company taxation and the creation of  a  European
        company.    On  the  other hand, now that  political  decisions  and
        guidelines  have been agreed to eliminate tax frontiers, much  still
        remains  to  be  done  in 1992 to  transform  into  regulations  and
        practical  arrangements  the aim of  establishing  a  "frontier-free
        area".   Following on from the communication it sent to the  Council
        in December, the Commission will shortly be informing Parliament and
        the  Council of its interpretation of the scope of  Article 8a.   In
        addition, the main thrust of the 1992 programme will be concentrated
        on  the  essential flanking policies, implementing  and  enforcement
        measures and infrastructure support, so that the post-1992 Community
        will  be  more  than  just a market.  It will  also  need  a  social
        dimension,   an   underpinning  transport   and   telecommunications
        structure and the means to ensure that the legislative framework, so
        painstakingly  put together, is respected and seen to be  respected.
        In accordance with the subsidiarity principle, strongly endorsed  by
        the  Heads  of State or Government and by the Commission  itself  at
        Maastricht, the Commission will continue to resist  over-legislation
        and  intervention  in  areas which can be  properly  dealt  with  at
        national,  regional  or local level, closer to  the  citizen.  Where
        major  decisions  have  already been taken  by  Parliament  and  the
        Council,  however,  the Commission will ensure that they  are  fully
        applied.
   5.   The  experience  of 1991 has amply confirmed  that  Governments  and
        citizens are strongly supportive of the Community when it deals with
        major  long term issues transcending national boundaries, where  its
        unity  adds  to  its strength.  This is  particularly  true  of  the
        environment  and research and development.  In 1992,  the  Community
        intends  to  play a major role in the United Nations  Conference  on
        environment and development in Rio de Janeiro and contribute to  the
        success  of  major international conventions emerging  from  it.  In
        research and development the Commission congratulates the  Community
        research team responsible for the JET project which took an historic
        step  in  1991  towards  more  power  from  nuclear  fusion  in  the
        21st century.  In 1992, the Commission will be proposing a  revision
        of   the  third  framework  programme  of  Community  research   and
        development and preparing the fourth.
   6.   The  Community  must  also  update its  common  policies  of  longer
        standing  to adapt them to the social and economic circumstances  of
        the 1990s.  This implies early adoption of the essential changes  to
        the  common agricultural policy proposed by the Commission,  without
        losing  sight  of the need to guarantee adequate  farm  incomes  and
        protect the structure of family farms.  In 1992 the Commission  will
        act  on  recognition by the Community that the balance  between  the
        catch  capacity  of  the Community's  fishing  fleet  and  available
        fishing stocks has to be restored by a reduction in capacity matched
        by flanking structural and social measures.
   7.   Strictly  speaking,  1992 will be the year in which  the  Maastricht
        Treaty  goes through the ratification process.  But  the  Commission
        will  need to press ahead with preparations for the new  environment
        for  which  Maastricht set the scene.  Some aspects need  not  wait.
        These include a joint effort by the Member States and the Commission
        to  improve  the conditions for  economic  convergence;  preliminary
        arrangements  for  Parliament's increased role  in  the  legislative
        process, following introduction of the co-decision procedure,  which
        will apply to a substantial proportion of legislation.   A  combined
        effort  must be made to pave the way for the new common foreign  and
        security  policy, with an eye in particular to  common  action;  and
        work  in preparation for an additional joint effort in the  area  of
        home affairs and judicial cooperation, including immigration,  visas
        and right of asylum.
        In   areas  now  opening  up  (social  affairs,  health,   training,
        education,  culture  and communications) there will be  a  need  for
        forward  planning  in cooperation with the Member States  and  other
        interested parties.
   8.   The sections which follow detail the proposals and steps required if
        the  Community is to implement the Single Market, move forward  with
        the  flanking policies, negotiate the second package  of  structural
        and financial measures ("Delors II") and play its role in the world.
        The   legislative  programme  proper  is  submitted  separately   in
        accordance with normal practice.
   I.   COMPLETING THE SINGLE MARKET AND ORGANIZING THE ECONOMIC AND  SOCIAL
        AREA
        A.  Completing the Single Market
            A  frontier-free area in which individuals, goods, services  and
            capital can move freely in accordance with the provisions of the
            Treaty  must be operational by 31 December.  As agreed when  the
            Single  Act was negotiated, flanking policies must be  developed
            to increase the effectiveness of the large market.
            1.   Eliminating border checks
                 The  success of the Single Market depends on the  abolition
                 of   all  border  checks  on  individuals  and   goods   on
                 1 January 1993.
                 (a)  Checks on goods
                      A number of important measures will need to be adopted
                      in the first few months of the year if they are to  be
                      transposed  in time.  Most of the proposals  concerned
                      are pending before the Council:
                      -    the  abolition  of  tax  controls  on  goods   in
                           passenger  transport  and  products  subject   to
                           excise duty;
                      -    the abolition of veterinary controls on pets  and
                           milk;
                      -    the  reorganization of controls on nuclear  waste
                           and  dangerous waste (including  ratification  of
                           the Basle Convention);
                      -    the reorganization of controls on the  production
                           and sale of drug precursors.
                      The Commission will also need to check with the Member
                      States  that a whole series of residual controls  will
                      be  abandoned  by the deadline,  notably  controls  on
                      agricultural    products    (MCAs    and     accession
                      arrangements) and transport from third countries.
                      Consideration  must  be given to  adjustments  to  the
                      procedures   for  controlling  exports  of   sensitive
                      technologies covered by COCOM regulations.
                      A number of provisions on indirect taxation have still
                      to be adopted.
                      These  regulatory aspects apart, the  Commission  must
                      work  with  the Member States to  ensure  that  border
                      checks are abandoned in practice.   To this end, it is
                      essential  that  data communication networks  for  the
                      exchange of administrative information in the areas of
                      taxation, customs, agriculture and statistics are  put
                      in place.
                 (b)  Checks on individuals
                      Elimination  of these checks depends in large  measure
                      on legal action.   This includes
                      -    clarification    of   the    interpretation    of
                           Article 8a;
                      -    signature  of the external frontiers  convention,
                           held  up  by the dispute between  Spain  and  the
                           United Kingdom on Gibraltar;
                      -    ratification of the Dublin Convention on right of
                           asylum.
            2.   Making the Single Market run smoothly
                 (a)  Winding-up work on harmonization
                      As  it is required to do by Article 100b, designed  to
                      ensure   a  fully  operational  Single   Market,   the
                      Commission  will be presenting a report on the  mutual
                      recognition  of national rules.   On a  proposal  from
                      the  Commission,  the Council will then  decide  which
                      provisions  in  force  in  one  Member  State  can  be
                      regarded  as  equivalent  to provisions  in  force  in
                      another.
                 (b)  Finalizing  implementation of proposals in  the  White
                      Paper
                      To  ensure that technical, legal and tax  barriers  do
                      not  hinder  the  move to a  Single  Market,  all  the
                      proposals  in the White Paper must be adopted  by  the
                      Council and transposed by the Member States before the
                      end   of  the  year.  The  main  priorities  in   this
                      connection are:
                      -    completing    the   liberalization   of    public
                           procurement;
                      -    finalizing the opening-up of financial services;
                      -    consolidating the Community framework for company
                           law;
                      -    bringing   in   rules  on  direct   taxation   of
                           companies;
                      -    defining  requirements  for  the  protection   of
                           personal data;
                      -    pressing   ahead   with  the   harmonization   of
                           conditions   for  placing   pharmaceuticals   and
                           foodstuffs on the market;
                      -    creating a Community trademark and patent.
                 (c)  Ensuring,  in  liaison with the  Member  States,  that
                      Community rules are transposed and applied
                      Now  that  the idea of a Single Market  is  coming  to
                      fruition, the Commission will be turning its attention
                      to   the   management  tasks   associated   with   the
                      functioning  of  this new  entity.  This  new  mission
                      presupposes  a  revamping  of  the  roles  of  certain
                      Commission   departments   to   meet   the   following
                      objectives:
                      .    to  ensure the transposition of  Community  rules
                           necessary  for  the  functioning  of  the  Single
                           Market,  in  close cooperation  with  the  Member
                           States.  In agriculture, for instance, more  than
                           60 directives   will   have  to   be   monitored.
                           Implementation   will  be  facilitated   by   the
                           creation of a veterinary agency;
                      .    to  set up the management machinery  required  by
                           Single Market legislation;
                      .    to monitor the application of Community law.
            3.   Promoting an information and publicity effort
                 A  fresh  effort  will have to be  made  to  publicize  the
                 changes  that 1993 will bring.  This will enable firms  and
                 individuals to assess the implications of the Single Market
                 in terms of rights and obligations.
                 Once expectations and fears in the individual Member States
                 have  been  identified,  an information  campaign  will  be
                 mounted.  This will comprise
                 -    practical information for the general public;
                 -    targeted information for sectoral interests.
            4.   Pressing ahead with the implementation of flanking policies
                 The main flanking measures relate to:
                 -    the   development   of  trans-European   networks   in
                      transport, energy and telecommunications;  this should
                      give added muscle to the new European area.   To  this
                      end  guidelines  will  be defined,  a  declaration  of
                      European  interest for major  infrastructure  projects
                      will   be   created,  and  proposals   for   technical
                      standardization will be formulated.
                 -    transport:  full  liberalization of road, sea and  air
                      transport;  promotion    of    combined     transport;
                      development  of  the social aspects and  the  external
                      dimension of transport policy;
                 -    energy:  gradual   liberalization   of   the    sector
                      (launching of a second phase), improved cooperation on
                      joint  stocking arrangements;  implementation  of  the
                      European Energy Charter;
                 -    consumer  policy:  improved consumer protection,  more
                      price transparency and better quality services.
        B.  Organizing the economic and social area
            The main guidelines concern the pursuit of economic and monetary
            convergence, development of the social dimension,  strengthening
            industrial  and technological potential, promoting  competition,
            contributing  to a better environment and reform of  the  common
            policies.
            Their  acceptance  and early implementation will depend  on  the
            principle of subsidiarity being strictly applied.
            1.   Economic and monetary convergence
                 The  decisions  on  economic and monetary  union  taken  at
                 Maastricht,  leading  to  the  introduction  of  a   single
                 currency (the ecu) in 1997 at the earliest and 1999 at  the
                 latest, will call for closer economic convergence.  To this
                 end,  multilateral surveillance of national economies  will
                 continue in close cooperation with the Member  States.  The
                 Commission, working with the Committee of Governors of  the
                 Central  Banks, will propose rules paving the way  for  the
                 second  stage of EMU.  Prominent among these will be a  ban
                 on  monetary financing and arrangements for  implementation
                 of the excessive-deficit procedure.
                 Increased  convergence  also depends on the pursuit  of  an
                 active competition policy.
            2.   Social dimension
                 (a)  The  set of proposals forming the action programme  to
                      implement  the  Community Charter of  the  Fundamental
                      Social  Rights of Workers is  almost  complete.  Rapid
                      adoption will make it possible to lay the  foundations
                      for   the  social  dimension  of  the  Single   Market
                      (employment,  working conditions, worker  information,
                      participation   and  consultation,  equal   treatment,
                      health,  health  and safety at the workplace,  and  so
                      on).  The Commission will consider the procedures that
                      could  be  introduced following  ratification  of  the
                      Maastricht Treaty, which includes the social  protocol
                      adopted by eleven of the twelve Member States.
                      The Commission would draw attention to the  scrupulous
                      approach  it adopted in devising its  proposals:  they
                      were drawn up after intensive consultation of all  the
                      parties concerned and discussions within the framework
                      of the Social Dialogue.  The Commission will apply the
                      same method and principles in making further proposals
                      in 1992 (protection of workers' rights in the event of
                      transfer  of undertakings, minimum health  and  safety
                      requirements at the workplace) and in its approach  to
                      sensitive areas (employment issues and the integration
                      of migrants and their children).
                      In  parallel with this, the Social Dialogue will  have
                      to   be  organized  on  a  new  basis  following   the
                      31 October 1991   agreement  by  the  two   sides   of
                      industry,    subsequently   incorporated   into    the
                      Maastricht text.
                 (b)  The  creation  of  a new European  area  will  trigger
                      changes  linked  to the increased  competitiveness  of
                      European industry and technological  innovation.  This
                      will  call  for a reassessment  and  reinforcement  of
                      exchange programmes and training activities.  Going  a
                      step  further, consideration will have to be given  to
                      the  resources  that  can be  deployed,  in  terms  of
                      training and retraining, to underpin the changes which
                      will affect major industries.
                      At the same time Community instruments must be adapted
                      to combat the phenomenon of exclusion from the  labour
                      market.
                 (c)  The advent of the Single Market will lead to increased
                      mobility.  Bearing  this in mind, the Commission  will
                      draw up a detailed inventory of the opportunities  for
                      cross-frontier   mobility  and  associated   problems,
                      notably  with regard to the payment of  pensions.   It
                      will include information on what has been achieved  in
                      relation  to the recognition of certificates  and  the
                      comparability of qualifications.
            3.   Industrial and technological potential
                 .    In line with its communication on industrial policy in
                      an  open and competitive environment,  the  Commission
                      will continue to support the process of adaptation  in
                      the  main European industries.  In the  motor  vehicle
                      industry, the agreement with Japan will be implemented
                      and  will  allow manufacturers to take  the  necessary
                      steps in terms of conversion, training and research to
                      adapt  to the new world market situation over a  given
                      period.  An  inventory  of the changes needed  in  the
                      aircraft  and  defence industries  will  be  produced.
                      Efforts  will  be  made  to  maintain  an  environment
                      favourable  to  forms of  European  cooperation  which
                      could enhance the Community's competitive position  in
                      the  electronic and computer industries in  accordance
                      with  the  principles defined by  the  Commission  and
                      endorsed  by the Council.  In this context,  attention
                      must  be  paid  to the promotion  and  development  of
                      D2-MAC and HD MAC standards in readiness for  European
                      high-definition television.
                 .    As  far as research is concerned, the main focus  will
                      be  revision  of  the third  framework  programme  and
                      preparation of its successor (1994-98).
                      Procedures will be re-examined with a view to adapting
                      them  to  an  institutional  context  (confirmed   and
                      amplified  at Maastricht) involving longer and  longer
                      timescales for the adoption of work programmes.  As to
                      the   substance,   a  better  balance  needs   to   be
                      established  between general research  and  programmes
                      geared to the needs of European industry.
            4.   Competition and transparency in state aids
                 An   active  competition  policy  will  be  a  key   factor
                 determining  the success of the Single  Market;  the  right
                 balance must be struck between cooperation and  competition
                 in the business world.
                 The  Commission  will pursue its policy of  promoting  fair
                 competition  and opening up markets in various  sectors  to
                 promote  closer  integration  and  boost  the   Community's
                 economic potential.
                 On   the   state  aids  front,  the  Commission   will   be
                 particularly  attentive to schemes which  could  jeopardize
                 the benefits the Community hopes to derive from the  Single
                 Market  and  greater cohesion.  A special  effort  will  be
                 devoted  to promoting the transparency of aid  schemes  for
                 firms in both the public and the private sectors.
            5.   Environment
                 The  5th Environmental  Action Programme  will  enable  the
                 Community  to  define the main guidelines  for  the  period
                 1993-2000.  The   Commission's  strategy  to   combat   CO2
                 emissions   must   be  broadened  to   ensure   that   more
                 consideration  is  given to environmental concerns  by  all
                 players   in   the   economy   (industrialists,   transport
                 companies, utilities and so on).  Aside from these  general
                 concerns,   and   preparations   for   the   Rio de Janeiro
                 Conference,  decisions  will have to be taken in  the  near
                 future  to  resolve  sensitive  issues  (waste   packaging,
                 ecological  quality of water).  Closer cooperation will  be
                 developed  between the Commission and the Member States  to
                 ensure stricter application of Community environment law.
            6.   Reform of common policies
                 .    A  decision on the reform of the  common  agricultural
                      policy will be taken in 1992.  The primary aim will be
                      to  ensure that enough farmers remain on the  land  to
                      serve  the  three  objectives  of   agriculture:  food
                      production,   rural  development,  and   environmental
                      protection.  But  the  reform  also  needs  to   bring
                      production into line with market requirements at  home
                      and abroad in an approach linking competitiveness  and
                      the need to keep the countryside alive.
                      To  this  end, agricultural support  will  be  shifted
                      towards direct aid to farmers (per hectare or head  of
                      livestock)   to  compensate  them  for  lower   prices
                      reflecting market trends.  This aid will also  include
                      elements to encourage extensive crop-farming and  curb
                      production.
                      These  changes will be flanked by measures to  improve
                      the   quality   of  the   countryside   (environmental
                      conservation, afforestation of agricultural land)  and
                      an early retirement scheme to assist older farmers who
                      wish to do so to retire with dignity.
                 .    In  the  fisheries sector, a new balance needs  to  be
                      found  between  available  resources  and  the   catch
                      capacity  of  Member  States'  fleets.  This   concern
                      colours  the  Commission's report to the  Council  and
                      Parliament  on reform of the common fisheries  policy.
                      Appropriate social solutions will have to be found  to
                      cushion  the  changes  this  will  bring,  notably  by
                      including   the  structural  aspects  of  the   common
                      fisheries  policy in the revision of  structural  fund
                      reform.     Fishing   agreements  will  have   to   be
                      negotiated  or renegotiated with non-member  countries
                      to  make  a reduction in fishing effort  in  Community
                      waters feasible.
            7.   Making the Community a reality
                 Without   anticipating  ratification  of   the   Maastricht
                 agreements,  the  Commission will continue  its  effort  to
                 involve  the  people  of Europe in the  construction  of  a
                 common  home  founded on solidarity.  It  will  pursue  its
                 activities in relation to education, youth policy,  health,
                 cultural  policy  and consumer protection,  and  the  steps
                 already taken on the technological, regulatory and cultural
                 aspects of the audiovisual industry.
   II.  STRENGTHENING COHESION IN THE COMMUNITY:  THE DELORS II PACKAGE
        The  second  package  of  structural  measures  and  the   financial
        perspective for 1993-97 will be presented early in the year.
        This will deal with three major questions.
        (1) How  are  new objectives and priorities to  be  translated  into
            policies for expenditure?
            Discussion  will centre on the issues raised by the  Community's
            new  responsibilities abroad (how to cope with  external  risks,
            how  to handle food and humanitarian aid), reform of the  common
            agricultural  policy, developing environmental policy,  devising
            and    financing   trans-European   networks,    boosting    the
            competitiveness of European industry and stepping up measures to
            facilitate industrial change.
        (2) How can cohesion and convergence be strengthened?
            Proposals will be put forward for establishing the Cohesion Fund
            approved  at Maastricht.  These will define its role  and  spell
            out the links between the new fund and existing Funds.
                 After assessing the performance of the structural  policies
                 pursued  since  1988, the Commission will have  to  present
                 proposals  for increasing the resources available  for  the
                 operation of the structural Funds.
        (3) How should expenditure be weighted and how much should be levied
            in  own  resources to enable the Community to take  on  the  new
            tasks?
            In  its proposal for the new financial perspective  for  1993-97
            the   Commission  will  have  to  incorporate   Member   States'
            determination to contain public expenditure and the need to make
            more allowance for Member States' ability to pay.
   III. Consolidating the Community's international role
            As  a focus of attraction in Europe and throughout the world,  a
            model  of regional integration serving the interests  of  peace,
            the  Community  will  have to respond in  1992  to  the  growing
            demands upon it from outside.  It needs to equip itself with the
            instruments and structures that will enable it to take up  these
            challenges.
            A.   Reinforcing cooperation
                 .    The  Commission will actively pursue its  coordination
                      of  economic assistance from the 24 western  countries
                      associated  with  the  Phare  programme  to  help  the
                      countries  of  Central  and Eastern  Europe,  and  the
                      programme  will be extended to Albania and the  Baltic
                      States.
                 .    In   development  cooperation  and   assistance,   the
                      Commission will endeavour to promote human rights  and
                      fundamental freedoms.   It will identify and eliminate
                      the  procedural difficulties in the way  of  financial
                      and technical cooperation with the ACP countries under
                      the  fourth Lom� Convention.  More generally, it  will
                      be proposing a thoroughgoing reform of the generalized
                      preferences scheme so as to cover situations that  are
                      specific to certain countries (environment, drugs).
                      By negotiating new agreements with the Gulf  countries
                      or  with  countries in South America  (Brazil)  and/or
                      Asia  (India)  and with other  regional  organizations
                      (Andean  Pact, Asean), the Community will  consolidate
                      its presence in these areas.
                      The  Community will have an important role to play  in
                      the  Middle East  peace  conference  as  it  will   be
                      chairing the working party on the economic development
                      of  the  region.    The  Commission  will  exercise  a
                      coordinating function in this context.
                      A  priority  in  Mediterranean  policy  will  be   the
                      development   of  relations  with  the  main   Maghreb
                      countries.
                      Lastly,  the United Nations Conference on  Environment
                      and Development, to be held in Rio de Janeiro in June,
                      will give the Community an opportunity to reaffirm its
                      commitment  to  a  mode of development  that  is  more
                      attuned  to environmental issues and the need to  make
                      financial  and technology transfers to the  developing
                      countries.
                 .    Once the European Emergency Humanitarian Aid Office is
                      operational,  the efficiency of measures to  alleviate
                      extreme  distress will be enhanced.  The  Office  will
                      aim  to complement United Nations activities  in  this
                      area and step up coordination with Member States.
                 .    On the commercial front, the main objective  continues
                      to be that of bringing the Uruguay Round  negotiations
                      to a successful conclusion.   The results, notably  on
                      tariffs,  agriculture and the Multifibre  Arrangement,
                      will   then  have  to  be  translated   rapidly   into
                      appropriate action.
            B.   Implementing  the European Economic Area and  consolidating
                 other association agreements
                 Once  a solution is found to the legal problems  raised  by
                 the Court of Justice, the European Economic Area - with its
                 new  arrangements for free movement of individuals,  goods,
                 services and capital with the EFTA countries - will be  put
                 into operation very swiftly.
                 There  will be continued Community financing  for  economic
                 restructuring   projects   and  programmes   to   back   up
                 implementation  of  the  Europe  agreements  with   Poland,
                 Czechoslovakia and Hungary.
                 Negotiations  on  similar  agreements  with  Bulgaria   and
                 Romania will go ahead.
                 As  to  the  Community's  relations  with  Yugoslavia,  the
                 Commission   will  redefine  economic  relations  and   aid
                 arrangements for the region in the light of developments on
                 the ground and decisions taken by the Council.
                 New  cooperation  arrangements will have to be  worked  out
                 with  the Russian Federation and the constituent  republics
                 of  the Commonwealth of Independent States.  Emergency  aid
                 is   being  provided  already:  ECU 450 million  has   been
                 committed  for  food  aid.  A  further  ECU 400 million  is
                 earmarked    for   technical   assistance   to    implement
                 infrastructure projects, modernize the production apparatus
                 and  improve  social  services.  In  all,  the  Community's
                 contribution   (grants,   credit   guarantees)   comes   to
                 ECU 2.6 billion.
            C.   Preparing for enlargement
                 As  was decided at the European Council in Maastricht,  the
                 Commission will present an initial report on enlargement of
                 the  Community to its next meeting in Lisbon  and  continue
                 its scrutiny of applications for membership.
                                     *   *
                                       *
   A  special  effort  will be required of all  Commission  staff  in  1992.
   Modernization  of  the  administration and  consolidation  of  its  human
   potential  (precarious balance between in-house and external staff)  must
   be  pursued,  and  programming  and priority-setting  still  need  to  be
   improved.  The  advent of the Single Market will alter the nature of  the
   Commission's function, and follow-up to the conclusions of the  screening
   exercise will make it possible to reallocate tasks.
   Lobbies  are  likely to proliferate once the Single Market is  in  place.
   Relations  between  the  Community's institutions  and  interest  groups,
   useful though they may be, must be more clearly defined.   Parliament has
   recently made moves in that direction.   Consideration will therefore  be
   given  to the preparation of a code of conduct to govern  relations  with
   organizations set up for the specific purpose of handling relations  with
   the  Commission.    This step will in no way compromise  the  freedom  of
   trade  or  professional  groupings  or  hinder  essential  dialogue  with
   institutional committees.
   If  a  success  is to be made of Maastricht and the  Single  Market,  the
   Commission will have to comply fully with the principle of  subsidiarity.
   Indeed,  its  future existence depends on this.  Beginning  in  1992  the
   Commission,  working with the other institutions, will have to  establish
   how   subsidiarity  is  to  operate  and  devise  experimental   internal
   procedures to ensure that no attempt is made to regulate matters that are
   best dealt with at national level and to avoid a surfeit of  legislation.
   An efficient early-warning system will be particularly important to avoid
   ruffling national feathers as a new era dawns for Europe.
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