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   In  line with the wishes expressed by the Dublin European Council at  the
   end of June, the Commission today adopted a package of measures  designed
   to  ensure the rapid integration of the GDR into  the  Community.  German
   unification  will  take  place without any  amendments  to  the  Treaties
   (exceptions being for a limited time only); and the cost to the Community
   budget  will  be  reasonable  and will not  entail  any  changes  in  the
   budgetary  and financial arrangements that have been in  operation  since
   1988.
   Upon  unification,  the  main body of  Community  legislation  will  have
   immediate effect in the territory of the former GDR.
   As  Mr  Delors  pointed out to the Foreign Ministers  of  the  Twelve  on
   10 August,  now that unification is to take place earlier than  expected,
   at  the request of the East German authorities, the Commission will  have
   to  be given special powers to apply the proposed  transitional  measures
   and  technical  adjustments  before  they  are  formally   adopted.  (The
   original timetable - for unification by the end of 1990 - allowed for the
   requisite  two  readings  of  the  relevant  texts  in  the  Council  and
   Parliament before the end of November.)
   As Mr Delors has suggested, the Council/Parliament conciliation procedure
   should therefore be initiated on this matter.
   These  special  powers  would  enable the  Commission  to  authorize  the
   Federal Republic   of   Germany  to  maintain  provisionally   in   force
   legislation  now applying in the territory of the former GDR  which  does
   not  conform  to Community law but which may be covered  by  transitional
   measures  proposed  by  the  Commission.  A  safeguard  clause  will   be
   introduced to obviate possible difficulties for the Community.
   Exceptions of this kind would mainly concern agriculture and fisheries.
   These are the salient points of the package which the Commission has just
   adopted  and  will  be putting before the twelve  Member States  and  the
   European Parliament to bring about the rapid integration of the GDR  into
   the Community.
                                     - 2 -
         The main body of existing legislation will apply immediately
   The  main  body  of  regulations,  directives  and  other  provisions  of
   Community legislation will be immediately operative in the former GDR.
   There  will  be  no need for the internal market to  suffer  from  German
   unification: the vast majority (80%) of directives laying down  technical
   rules will apply immediately on unification.
   The same goes for other vital areas such as the free movement of capital,
   persons  and  financial  services and for  indirect  taxation;  here  too
   Community rules will take effect straight away.
   In  another important area - competition policy -  Community  legislation
   will  apply at once in the former GDR.  Existing rules on state aid,  for
   instance, will allow the Commission some flexibility in dealing with  the
   vital  restructuring of the East German economy.  Assistance  granted  by
   the Federal Government to the territory of West Berlin and the whole area
   bordering on the GDR will be reviewed on unification and is likely to  be
   phased out.
   In  agriculture,  the main thrust of Community policy,  i.e.  the  market
   mechanisms   and  guaranteed  prices  to  farmers,  will  be   introduced
   gradually.  As regards fisheries too, the integration of the GDR into the
   Community  will  not  require any adjustments  to  the  policy  currently
   applied  in  the  Community: the East German fleet will  have  access  to
   internal  resources  with  no  adjustment to  existing  quotas  or  total
   allowable catches.
   The  fields of energy (including the provisions of the  Euratom  Treaty),
   research,  technology and telecommunications do not pose  any  particular
   problems regarding the adjustment of legislation.
   Lastly,   the  ECSC  Treaty  can  be  applied  without   adjustments   or
   transitional measures: a six-year restructuring programme is planned  for
   the coal and steel industries, which will be receiving a total of  around
   ECU 120 million of Community aid; a first instalment of ECU 10 million or
   so may be paid as early as 1991.
                Relations between the GDR and Comecon countries
   One of the GDR's main sources of revenue has been its privileged  trading
   relations with other Comecon countries.  The Commission has stressed on a
   number  of  occasions that these links must be maintained for  some  time
   after the GDR's integration into the Community.
   In its package of measures, the Commission therefore proposes that trade
   between  the  GDR  and the countries of  Eastern  Europe,  including  the
   Soviet Union and Yugoslavia, be kept up for a transitional period  ending
   on  31 December 1991  (with a possible one-year  extension).  This  would
   apply:
                                     - 3 -
    -        within the limits of existing trade volumes (1990);
    -        for products with a final destination in the former GDR;
    -        with   suspension   of   customs   duties   and    quantitative
             restrictions;
    -        with  exemption from the technical rules applicable within  the
             Community.
                                  Agriculture
   The  Commission  notes that full application of the  common  agricultural
   policy has been facilitated by the economic and monetary union of the two
   Germanies  on 1 July and by the customs union which came into  effect  on
   1 August.
   The technical adjustments and transitional exceptions relate in the  main
   to  agricultural stabilizers, which have been the mainstay of the  reform
   of  the  common  agricultural  policy over the last  few  years,  and  to
   measures to support the restructuring of agriculture.
   The  Commission  takes the view that for the transitional period -  as  a
   general  rule,  up to the end of 1992 - national aid will  be  needed  to
   support the process of restructuring farming in the GDR.
   As regards agricultural stabilizers, the only adjustments planned by  the
   Commission affect meat and processed tomatoes.
   The Commission does not suggest that maximum guaranteed quantities be set
   for  the former GDR since the Community must in any case review  existing
   stabilizers in the course of the 1991/92 marketing year.
   Finally on the question of quotas, the Commission is proposing an overall
   milk  quota of 6 570 000 tonnes for the former GDR and a sugar  quota  of
   870 000 tonnes.
   In  the  event  of  any difficulties arising  from  unification  for  the
   Community  markets, the Commission will have recourse to  the  management
   procedures laid down for emergencies in each of the common  organizations
   of markets.
                      The environment: a long transition
   In the Commission's view, the parlous state of the environment in the GDR
   will  make numerous transitional measures necessary which will go  beyond
   the  date generally proposed in other areas, i.e. the end  of  1992.  For
   standards of water and air quality, transitional periods up to the end of
   1995 will be needed and clean-up operations are planned.
   However,  no transitional measures are proposed in the field  of  nuclear
   safety.
                                     - 4 -
   Apart   from  the  environment,  other  areas  will  also  require   long
   transitional  periods  which may in some cases extend beyond the  end  of
   1992,  in  particular the food, chemical and  pharmaceutical  industries.
   The  Commission  also believes that technical  adjustments  or  temporary
   exceptions will be necessary in the field of animal and plant health.
   This  should  not  cause  any major problems  for  the  Community,  since
   "substandard"  products  will  only  be able  to  be  released  for  free
   circulation inside the former GDR.
                     Limited cost for the Community budget
   The  integration  of  the  GDR into the  Community  will  not  impose  an
   unbearable strain on the Community budget.  According to the Commission's
   estimates,  the  additional  cost  will be no more  than  an  average  of
   ECU 500 million in each year from 1991 to 1993.
   It   is  estimated  that  German  unification  will   entail   additional
   expenditure  from the Community budget averaging ECU 2 billion  per  year
   for the next three years (ECU 1 billion for the structural Funds, ECU 800
   to  900 million for agriculture and ECU 150 million for other  policies).
   This  figure  should  be  set against  the  additional  revenue  of  some
ECU 1.5 billion which is expected to accrue to the Community budget.

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