Summary account of the economic policies pursued in 1974. COM (75) 92 final/2, 17 March 1975

OA4rAf$SlO,|t

,OF

_TH.E

_EUROFEAN

_{COA4i{UNITIES}

.;

'

Bnraaclertr?

throb

19?t

:.,

Fu{p,ury

,p

1i?,

(fo4fiFnterl

_by

_{the Cod'lselon'to,tbe}

_Counoll

_th

a'ccordanee

with

Artlole

2

of

tbe lleclslon

of,

,

1g Febnrary

_Lyl0

T'A3LE OF @NISITS

-Pase

FO}IEWOND

-I.

Bud.cetary

Policv

II.

i{onetarrr

Policy

IfI.

Excbange-::ate

policy

IV.

Incoroes

Policv

L

4

,7

IONEIMND

-

In

the

new

situation

created. by

the

_{-ener€Xl.cflsle}

the

economlc

policies

pursued

_in

the

Comnunity

in

L974

failed.

to

tnprove

significently

the

con-d.itions

of

eguilibriun'

or

achieve

a

greqlg.l conv€rg€p9e

of

the

rrarious

econornies.

I{ork on

tlefining

a

cotmon en€ngr

polloy

and.

a

oormon

appnoach

to

balsnce

of

paynents problens

ran

lnto

d,iffloultiesl

and. d.elays

occumed'. As regarrls

the

nemben

countriest

d.ena,nd.-oanagenent

_1nlicies,

rates

of inflation

cl.ifferecl. wid.e\r

fmn

countrT

to

_{country Dar:tly} because the

Governments cLid

not

all

act with the

sane d.egree

of

prcnptnesa

_or

effective-n€Gr9r

In

several

countries,

monetary pol.icy

ras tbe

u,in

stabtu?ition

instnrnentr

although

it

probably curbed.

the

propenslty

to

lavest

to

en qn-cl.esirable

ertent.

lthr"or:ghout

the

year budgetary poLtcy

_in

nogt

d.efioit

countriee ilas

not

sufficient}y

restrlotive

or

nae even

r,eflationary,

while

in

the

other

countries the

openation

_of

butLt

in

etabil.igera

p1aye6.

_a

_large

part

_in

the

greater

_stinuli

releagert by bnrilgetarxr

polioy

in

_1gT4.

_.

rn

aclcLitionr

lt

often

proqed. impossible

to

nod.lfy

the stnrctgre

of

the

publlc

adninistEtionsr

bud.gets so

as

to

ensrrre

a

better

lncone

d.istrlbution

or

to

safegr:anl

the nost

essential

investnents.

Flnally;

tbe varlous

econonlc groups

banp

notr

general-Iy speakingl actjustecl.

their

_$.epand.5l

to

_the

worsening econonic

".-'l-

r1-I.

Buil.setanr ooLicv

I'L'

As

a

result

of

_the

_slottdown

_in

_econontc

_{act!.vlty rbich}

_{occu:?ed. cl.uring}

the

year,

bud'get revenue

in

_{several conntries}

_in

_the

_{Comunity increasecl}

lese

than

foreoast, particularLy

_in

_{Germar5r, Denmrk and.}

_freland.

_In

_the

other countriesr

revenues again exceeded

the

leveLs bud.geted.

for,

thanks to

the

greater

_-

but

purely

nominal

_-

increase

la

_{incones and.,}

_in

_the

_case

_of

Fbance and

rtal.y,

to

higber

taxation

introd.ucecl. _d.rrring

_the

_year.

)"2'

Bcpend'iture

_in

_all

_couitries,

_{however, continued.}

_to

_{erceed. expectations,} though

to

d'iffering

d-egrees.

[he overall

e:cpanslon

in

_cunent

_{expend.itr:re,} spumed on by r*,sing

costs,

exceed.ed.

the

growth

_in

_cepital

_{eipendtiture, whicb}

bore

the

bnurt

of

attenpts

to restriot

e:cpend.itr:re.

_{I\rrthertore, the}

d.own-swing

in

the

oonjnnoturaL

_situation

_often

neaegsitatecl. ad.cLitionar expead.iture,

parti-cularl-y

in

the

fono

of

unenploSrment

benefits.

_{fhe resulting}

_built-if

stabl-lization

effect

helped somewhat,

particularly

_in

_{Germ,rgr anct Denmrk, to}

sustain

econonic

activity.

1'3'

Most Melnber

_states

_{used. bud.getary}

_policy

_to

_help

_regulate

_the

_eonjrmctural

situation'

_rn

_Gernar5r,

_the

_autoroatic

_{reflatlona4y effeot}

_of

bud.get execution,

effective

throughout

_the

year,

nas backed. up by

oertaia

neeEures cl.esigned.

to

suetain

actlvity.

_In

Deoenber

_I9?3r

_tax

_neasureE

_rhich

_{bad banpered. in_}

d'ustriaL investment a,nd

residential

_constnrction

_{had. already been ctropped} and

a

supplenentary programte

_of

_{expend.iture $ia.s ad.opted.}

_in

_Febrtatl

_L9I4.

rt

nas clecicled.,

_tn

the

sumer

of

L974t

to

reforr

the

etnrctu.ne, a,nd.

the

new

systern cane

into

force

in

earLy 1975, 'Ttre

_{tintng of this}

_measure

_is

_relatlve1y

fa-rror'rrabLe

_as

_far

_ae

_the

_{conjrrnctural}

_position

_is

coacerrred..

In

ad.d.ition

_to

these

me€LsuleBt

a

progralune

_of

_{expenclitrrre}

_-

_{sti].L rather}

_oautious

-

to

assist

reglons

suffering

frorn

high

r:nenplo;rnent was adopteit

_in

septenber, and.

followed

in

Decenber by

the

granting

_of

_a

<ilrect

businese lnvegtnent prenirrm,

-b.

-2-a

new

public

investnent progtaurle and.

the

lntroduotloa

of

a

preniun

to

bring

unenpl.oyed. norkers back

to

work.

1.4.

In

the

Netherla,nd.s and

in

Selgtun, the

budgetary

policies

pursued Ln I9T4

also

had

a

reflationary

effect.

In

the

Netherlanclg, the

energetic proglalme

_for

sustaining

the

conjr:notr:ral

eituation

prowid.ed.

for in

_the

d.raft

budget ancl. expanclecl.

in

Novenber

Lfl{

streagtheneil

thls

effect for

L975. In

Belgtun, however,

dlreot taration

oute

ln

tbe

autunn

to

assist

tar-lnyers

ln

the

lower ancl. nlcldtle lncome braokets ban been more than

offset

by

the

increase

in

ind.lrect ta:ration

anil

by

the

darller.co].Lection

of

tax

on

the

incone

of

the

seJ.f-emplqyed and

of

oorporatlon

tax.

The

expenditure provid.ed.

for

in

the

L975 budg€t and

the

declston

to

lnpLernent

the entlre

investnent

prognme

should.,

horever, contribute

tomrts

surtaining

econonic

activity

fron

the

begllnlng

of

1975

onmr(ls. Slnllarly,

tbe

higher taxes and.

the

increased expencllture provldecl

for in

the tu.renburg buclget should. heLp

nalntain

econonlo

aotivlty.

1.J.

0f

the

countries

wlth

hearry bala,noe

of

paXments

_d.eflclts,

_France

anil

ltaly

acloptecl

restrlctive

bud.getarXr

policles

-

althougb

the

latterrs

cleficit

remined.

very

largd.

In

ltaly,

the

groyth

ln

expend.iture was

kept

withln

gtrict linitsg if

ther6

hacl

not

been an.exceptlonaL tranefee

of

appropriationg

to

the

sickrress funcls tLeslgned

to

cover

the

d.ebts

of

the

hospltals, the

growth

in

expend.iture wouLd bave been no

greater

than tO

y".

The increase

in

ind.ireot ta.xation,

elthougb

offset

by

a slight

easlng

of

ct.ireci ta:cation'cleciclecL

last

sumer,

accentrratecl

fiscaL

UugSrancy.

In

France,

the

buclget

eventually

ylelcled.

a

snll

surpl-us,

minly

accounted

for

by

the

speoial

tax

ler6r introclucecl.

in

Jr:ne L9741

if

there

bacl

not

been

a

consid.erable and

exceptloral

increase

in

the Governnentts

provisional

ad.vances

to

the local authoritles

against

future tax

aocn:als,

the

surplus woulcl have been

very

large.

-3

-1.5.

rn

Denmrk

_too,

_efforts

_rere

_nd,e

_{tlrronglout the}

_year

_to

_use bud.getary

polloy

as

a

neans

of

curbing demrd,'and. thereby reclucing

the

cunent-account

d.eficlt.

In

May,

indlrect

tantion

ms

increaEed.

in

order

to

sLow cl.own

the

rlse in

_{consunersr expend.tture.}

Neverthe-lessr the

lncrease

in

tax

revenue nas snalLer

tban

tn

the

provious year ard'

this

neant

_tbatr

_in

_contrast

_{with the}

_eubstantlel

_{surplue budgeted.}

for,

there

uas

in

fact

a

net

borrowing requlreraent.

-+_

rn

rrerancL and.

the

uniteiL Kingd.orn, _{however, budgetary}

_policies

_were

L.J.

glvan

a refletlonary

bias

and w111.

not,

tbereforeribeLp

, '

to

_renedy

the

divergent

price

trends

and.

balanoe

of

payments

_{sltuatlons in}

the connr:nity.

rn

rrela,ntl,

openditure

grew

at

_a

rnore

rtpltt

_rate

an6 revenue

at

a

elightly

3.ower

rate

than

forecest,

_rltb

the

net

bor:roning

requlrenent anounting

_to

aLnost L4"

of

the

grosa d.omestlc

prod.uot.

A

consid.erable

proportion

_of

_{the d.6ficit}

_{wag finanoed,}

_by

_{creclit fron}

_abroad.

rn the

thritecl Kingdon,

the

initiar

budgetary

provisloas

_for

tlne T974/75

fina^ncial year ainecL

at

recl.ucing

the

d.eficit,

but rere

amend.ecl

in

Ju3.y

and sovenber L974 by

provlsiong

_to

llghten

taatloa,

miuly

on vAT ancl.

corporation

taxr whilst

rapiclLy

_rising

costg boosted.

erpeaditr:re.

,Ilre

end'-of-year

d.eficit

is,

therefore,

e:cpectecl

to

be

very

ngch

greater

than

the

previous yea,rf s.

-Y

TABIE 1

-1

_ut.ft

_hralgpt

2

_hot"bI"

_outturre

3

_Dio"g"tiliag

_the

_{aesing of} lnd,tre-crt,-tgrlgtiodabout FF ?.50o

n)

rhich teg

deaided' a:

thc

Fiaanoe

Bill

hatt gone

to

Farliament'

4

anit

6

_Dl{lq

_{anit 1974/75}

_financlaL

_f,€&PBo

5

_Fot"or"te

naale

tn

Junefuly

of

the

corrergonding

or cturqrt

f€ar.r

?

_m"

_19?3

_foreoast

_{yag drarm up}

in

terns

of

the

1973n4

finaaoial'

foBrr

8

_,*tt"t

_{cash forecastg.}

Sorrcea

Omission

servioes

1974

Forecastl

orttusr2

Corntry

1973

ForeoaEtl

outtura2

+ 4.4'

-

2.&

o.03

-

4.5608

-

2.3

-91.1

-

O.?

-

3.996

+

_,.5

-

2.2

+

4.8

-

209

-7.731

-

0.7

-79.9

+

2.3 -2.222

+

3.g5

-i3.f

+

o.1

-31 3

-6.9408

-

2.O

-83.2

-

1.1

'-1.525

-19.0

+

2.0

-13e

-7.569

-

2.2

-89.0

+2.2

-3.930

2.2 Dennark

(oxt

tooot;4

F.R.

of

Gerna.rqr

(ou

tooon)

Franoe

(rr

tooo n)

Ireland

(efr

n)?

rtely (rat

tooo u)

tetherlaails

(ff

tooo n) Belgtun

(ffrs

rOoo !n)

Duenburg

(f^trs

ro0o n) Ilntted. Kingclon

(cstg

4

-b-fI.

Monetary Polioy

2.1.

For moet

of

1974

all

the

menber

countries oomittecl

their

nonetary

policies

to

the

figbt

against

infLation.

This

resuLtecl

in

ocoasionaL

ligtl,iclity

shortages whenever

interest

rateg

were

high.

llhere

are

EeveraL neasoas rhy these

polioies

have

not

yet

slowed tloror

to

angr appreciable

ertent

the

rate

of

price

iacreaseg:

(a)

Moaetary poLicy tneaaures

are

felt

on\r

after

a oertaia

tine

Lag.

(U)

ttre

restriotive

policies

pnrsued. by

the

vari-oug

conntries

were

aot

properly

s;mchronized..

At a

tine

rften

the

nonetary

authoritieg

of

the

nenber states,

after

the

obJ.igation

to

eupport

the

dollar

hsdl been rernoved.r gained. nore scope

for

nanoeunre,

it

was, howeverr

on\r

in

the

Federa} Republic

of

Gernany

ancl

in

the

l{etherland.s,

that

_restrictive

measures were introduced. up

to

the

spring

of

197J.

fn

ftaly

a,nd. Fra,nce

the

reetrictive

nature

of

monetary

polioy

llas

not

strengthened.

until

nuch

later in

_{the ;r€a?o ftre}

tining

in

the

other conntries

variect between

the

two ertremeE .

(c)

fs

inflation

rateg

ha.ve inoreased.,

the

control-

of

the

phenomenon hag becone

aLL

the

nore

difficuLt.

The

effects

of

the restriotions

were

feLt

onLy

dtring the

seconct

half

of

the

_learr

nain$r

ia

the forn

of

a

faI1

in

enployuent

in

nost

mernber

countriee.

To

a large extent,

thie is

because

firns

anal

inclivlctuals based.

their

prioing

ancl

their

income obJeotives on

the

erpec-tation that

infl-ation

woulcl continue

or

6ven

aooe].erate.

$ince the

erpa,nsion

in

Liquidity

has

not

taken pJ.aoe, noney clenandl has

not

been

gufficient

_to

guara.ntee

ful.l

_utiLization

of

the

production

factore

in

question.

Conseguentlyr

the

restrictive

monetary

policies

initially

had.

a

heavier

inpaot

on enplo;ment

tlran

on

inflation itself.

(a) fn

a number

of

countriee,

the

regtriotive

nonetary

policies

pursued. have

lacked. proper support

fron

other

stabiLizlng

lnetruments,

partloularLy

in

the

budgetarXr

fielcl.

-1-

-5-2.2.

UntlL the

autr:sr,

two

ejor

nonetary staacee

rere

obsenred

in

the

Comrr.rnity. Certain

oountriesr

na"nel;r

the

Federa.l Reprrblic

of

Gerna,ny a,ncl

the

UnitetL KingcLon, &id

not tighten

their

reEtriotive

pol.ioiee

relative

to

the

previous

_]rearo

The

authoritleg rere

ntore coucerrred

with

liniting their

effects

and introd.uced. cautious n€BSrrreee

to

edse the

situation.

In

other countries,

however,

not

untll

1974

dtd

tbe

nonetary

policy

reach

its

nost

restrictlve,

the

min

feature often

being the

tightening of

qua.ntitative

l-inits

on

tbe

expansion

of

bank

cred.it,

particularly

in ltaly,

tr'rance, BelgC.un and. Dennark.

2.3.

Ornly touards

the

encl

of

tbe

year d.ld.

the

nonetary

poLicles

in

al.I

the Menber States

apirl

converger beooning nore

flerlble.

Very broad.Ly speaking,

the

Connr:nity arrangements

for

supporting excbange

rates facilitated.

coord.ination

of

the pollciee

of

the

Menber States

participating

in

the

scheme.

2.!.

In

nost Member

States,

the

noney supply e=pand.ed

lees

in

19?4

tban

in

1973.

Howevery on

a

year-to-year

basl.el

the grorth rates

of

the noney suppLy

in its

narrow

il.efinition (Uf)

again tend,ed.

to

acoelerate

during

the

second haLf

of

the

yea:r

in

the

countrLes

rbich

d.id. not

tlghten further

their

restrictive

monetary

poLicles

in

L974.

2.J.

Ttre cbanges

in

interest rates

reflect

tlre

rnonetary

policies

pursued.

Although

the

rates

were

generally

hi€br the

trend.s from countrT

to

country were.welL

out

of

pbase.' For lnstance,

interest ratee in

Italy,

3elgiurn and tr'rance m,de up

by the

autr:.wr

the

leerlay

resulting

frorn

the

increases recorded.

in

L973 by

the

other

countries.

fncreases,

i:r

sone cases Large

increasesl

in

the

discount

tete

eupportecl

the

d.ear

noney poL1cy pursued.

in

these

three

corrntrles and

ln

Dermark.

3y ray

of contrast,

short-teru interest

ra,tes

in

Germnyr

the

Netherland.s and.

the

llnited. Kingdon had alread.y reached.

thelr

mxlmrm Levels d.uring the

first

six

nonths

of

the

Jr@aro

Dec}ialng

irrterest rates

in

the

autunn

in

the

tlnited. States alLowed.

the

cor:ntrl,es

of

the

Comunity

sufficient

freedom

of

action

to

reLax

their

own

interest rate

pollcles.

Torrarrls

tbe

encl.

of

the

year and.

in

early

ir975t

the

sbort-teno

lnterest

rates

were

tending

to

ease d.own

in

all

nenber

cor:ntries.

Setweea

the

nid.cll-e

of

December 19?3 anct

the

end.

of

,EnrralT L975

the

dlsoormt r:ate

wis

reduced

-E-

-5-2.6. throngbout

alnost

the

whoLe

of

L974

oaBital-nrtet

lateE

were

risirg

or

Etabilising

at

higb levele

in

all

the

bouattles.

Since savers expected.

the lates

to

increase

further

and

slncer

ln

a

nnnber

of

e,ountrlest

tbe return

on

short-tern

investnents tras

higher tban

long:tero

interest'

tates,

there

rlas

at

tines

a

goocl dl.ea].

of

unrest

on

e

muber

of

financial

mrkets.

After

short-tern rates

fell in

the

second

balf of

the'yeart

the stnrcture

of

capital

mrket

rates

reverted,

to

a

nore Romal

situation.

3ut 1t

uas

on\r

tonards

the

encl of,

the

year

_tbat

lolg:tern

rates

fell

in

noet

Comnunity countries.

a

x

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-

l0--7

-III.

Erchanee-rate policY

3.1.

In

L974t

the inter:ptloraL.

nonetat? systeu guffcredl.

nJor

digturlences. echaage

rates

of aLl

Comunity

cureacies fluotraled

nrkedly

tdth

reslmct

to

tbe dlollar, but

noet

shoned

a

nrked,

tende.ncy

to

strmgthen

ln

tetns

of

that

crrn€Dolo

thuE

the

cumencieE

of

those

fine

oountrles

rhloh

oontlmred

to

take

part

in

the

Comnr.lnlty systen approoiatod,

by

&bout LO % against

thc dollar;

the

trb,nch

frano

which

left

the

ttsnaker

in

.Ianr:ary l9?4apprEoietedl against

the

clolla,r

by

_{5 %,}

nd

the

por:nct

sterling

by

L

_fi.

Oa

the

otber

band. the

Italia,n f-ire

d.epreciatedt

nonrrqlly

by about

I f'

J.2.

Weighted. excha,nge

rates

have behavedt

d.lfferently

fron. n6rninaL ratee

(see grraph

over).

The

five

cumenciee

ln

the Cooualty

nEra,ken _{bave eppreoiated, Lese}

narked.Isr ',

glven

the

inportanoe

of

trad,e betreen tboge cu:lrenoies.

ttre

lirra1 the

por:nd

sterling

ancl

the

Irleh

pourd depreclatetl

rhlIe,

in-the

seoond.

balf of

the year, the

F:rench

franc

regaiaetl eorne

of

the

grouncl

it

lost in

the

flrst

balf-year.

3.3.

lnong most Comr:nity

cunencies, the tllvergs$

excba,nge-rate

nove-nents

reflectecl

the

trencls

in

baLance-of-pa5rnents

posltlons.

On tUc onc-ha,nd r

the

Federal Republic

of

Gernany,

the

l{etherlancls, anrd

the

!L.E.U.

showed

consid.elabLe

cunent

acoount surplusee (/fOrOOO

nlllloa

_fn

alL),

ctespite the

negative

effect

of

the

increase

in

the price

of oll

oa

their

tracle

'oalancer.

_On

_the

_other

_hand,

_the

_{llirited. Kingd.on,}

_Italyl

_{Fraaoe, Denmrk and.} Ireland. suffereal severe

d.eterioration

in their

currsrt

eccouuts, and.

their

overrall

deficit

reached.

nearly

_F

Z4rOm

aiIllon.

3.4.

Developnents

in

the cunent

balanceg shor

nery

olerly

tbat,

at

least

un-tiIl

now, changes

in

exchange

rates

within the

Comunity bave not

brougbt about

the

hoped--for

resultsi,

llhis

oan be erplalaecl. by

tbe

fact

that

conjnnctural

pollcy

_{I in}

the

surtrllus oor:ntries as

rell

as

la

the

tleficit

countrtesr

has given

a

greater

priority to

intertaL

problens than

to

erterral

d.lseguiLlbria.

Certain

governnents,

after

sone

delayl

have

triecl

to

reorientate

their

interrraL

policies

in

thie

reepeot.

-

t\-

-8-3.1.

Despite what has happenecl

to

current lelaaoeer

tbe

official

reserres

of

tbe

nenber countries have

not

rrarled nuohp

the only

excep-tlon

being those

of

Denrnark, whose reserves

fel.L

3O

$

aurfng

the

year.

llhe

other

nenber cor:ntries mnaged

to

conpensate

largely

for

thelr

cr:rrent

cleficits

or

surpl-uses

by capitaL

lnflore

or

outflors.

In

certain

countries,

official

excha.ngo-narket

intenrentlon

baE aLEo helped.

to

OEUTSOTLAND FRAtttCE

ITALTA

ItIEDERLANO

U.E.8.L. -B.L.E.Ur

TJTIIITED KITTCOON

IRELAND

OANNARK

o

-

\1-1816@

|FDnsunof,

m

DEFnmIAsrOr

0r

'rsE fi,nnEmrBs

g,!Em

coulBlBs rf,

4

-\>n

'9-fV.

Inooes

pollov

d.f

. lll

the

0overnnearts

in

the

Comunlty

attenpteil

to

rcgUt"ate lnoone growth aail

lllstrlttrtion,

bnrt

nost

of

tben

dlil

so

rltbout

rcfcrruoe

to

a olearly

deflncrl lncomeg

polloy

and.,

generallyr

enpl.oytag

trailttloaal

doaa&oanagonent

lngtnrnote.

A nunben

of

then

preferred

to

rely

Dolo oD pl.lceo

pollof

neesureE,

elther

tenporar!.ly

fieezlag prlceer

es

Ln

Donark

anil

ftalyr

or oonirolling

the

tnoreage

ia

p:llooe b;r varioue neano! requlred,

prlor

annouroeuentg

of

prioe lncreegee

ln

lreland,l

Eelgiunr

the

Itetherlanclal

Xte\r

anrl

the

Unltecl Ktngd.on;

eelcotlve

atl hoo moeaures

in

lba,nce; mrbstdies

for

coryrant6s

in

Dennark

to

offgct tbe

ef,foota

of

mge inoreeses; foocl eu,bsidlieg a,nd gubsldllea

to

nationalizecl

uailsrtatciage

ia

the

Unitecl Kingd.on. On

the

nbole

r

the

renrltg

rere rather

dis-appolntlngr as

thie

type

of

laterventlon

faileil

to

acntrcllze the faotors

puehing

'prloor

_ug.

_De

_Eililttion,

_the

_{publio authorltleo rer€}

_gclilon

_abld

_to

_eTert

_a4r'

feat

lufluenoe

oa

the

agreenente negotiated betreen

tbc

unLong amd. nanagenente. Oely

in

the

United, Kingdon ancl

the

tretherlendg were

real

atteupts

nad.e

to

lay

ilora

a

pattera

for

inoone growth

rhioh

trao

oonlnttble

rltb

the overall

objeotlvea f,ired.;

ln

the

Unltett Kingdon

thlE

took

place

_rlthln

Stage

lhree

and.

later

wtthin

the

trSoolal Coatraotn and

in

tbe

trEtherla,nd.g

tn

eocordaaoe

ytth

thc

Speolal Porerr .e,ct; nblch

allors

the

Govenrnent

to

Lay rlora

thc ruleg

und,Er

rhioh

i"noreages ean be rleottterl by

colLeotive

agreenent.

4.2.

Ite

a

nurnben

of

oountries income

red,istrlbution

oonalderatlonE

aleo

playedL

e

rolo.

For

ingtanoel

in

Dennark and,

in

Oerrnan;r

tbe

tar

reforoe

_{nhioh rere}

adopted.ln

Ju\y

and. Septeubor

respeotlvely

bnt

wbloh

on\r

oeoe

into

foroe

in

ltfl

lnolnited,

provleion

for

higher

tar--erenpt allsranoes aad,

the

lntroduction

of

e

ner ta.r

soale.

Itr

other countrleel

_lartloularly

lreland.s

the

tretberla,nds aad

the

llnlted. Kir6d.on

tar

meagures were

algo

introdncett

to

lightcn the

tax

burdsr oa

the

lorest

incones.

Indeed.l

in

lVovenber,

tne

f,etherla.nd,s Govenunent annmnocd, an

aotual reduction

ln

nrger

and. iaoone

talEe as

of

April 197j.

In

Itaff

an

erceptim

res

nad.e

to

the

neailres

ad.optetl

ta

Ju\y

to

regtriot

d.onegtic

doanil,

uane\r b5r

raiein6 the

baglo

tar-free

elloua.nce.

*

)

-10-

_l+_

4.3.

Soolal

tranef,ere were alEo lncreaacd,

la

nost

oouatllet

la

ea

attenpt

ic

prgvlilc

better glotcotlon

for

certaln

seotorc o?

soolcty

a6llnst

the

ef,feotg

of

inflatloa;

th,ie

ps

the

oaee La Belgl.un

helaatll

Eranoer

tbe

f,ctherlaoils and

the

llniteil

Ktngflo.

ID

particular, near\f

everlnrlerc

lstiroent

end' rrldlowgt

posions

a,nd. nlnl,uun

guaranteeit

saral4til mre

roLEeC.

4.4.

lfbe

dleterloratlon

in

the

euplo5ruot

sltuatio!

-lrituocil

the

prnbllo

authorltles

ia

nost

oountries

to

raise

rmenplqrmot

benefite

and

ln

sone cssoE

to

atend

tbe

nerluun period.s

of

oonpmeatlon.

4.5.

Ilbe

authoritles

were

in

aild.ition

anrlonrr

to

gqc'nra{p

gevlng.

Congrlaorlr earrings anangenentg beoa,me operationa!.

in

Dennark

in

the

autumr

for

certain

i4gronc

backcts aail

the

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