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Planning and programming in the European Common Market
European Economic Review 4 (1973) 217-233.
Nart h-Holland Publishing Company
i%,,
PLANNING AND PROGRAMMlNG IN THE EUROPEAN COMMON MARKET
Johns Hopkins
Bela BALASSA * University. Baldmore,
Maryland, U.S.A.
Received October 1972
This paper has examined the experience of the European Common Market with mediumterm planning and programming since its establishment in 1968. It has been shown that pbnning on the industry level and an inward+riented economic policy are closely interrelated and that French planning was successful in a moreor-less autarchical environment. With entr) into the Common Market, however, much of the usefulness of French planning has disappeared. In turn, its generally outward-looking stance, reflecting the interests of the other EEC countries in trade with non-member nations, has not been conducive to applying French methods or, planning on the Common Market level. Programming in the EEC has been largely limited to the preparation of five-year projections and guidelines for policy making. But there have been substantial differences between projections and realization, and the projections have been of little value for public and private decision-making. Nor is there evidence that the Community’s policy guidelines would have been followed by member country govcrnments. The usefulnessof projections could be enhanced if these were prepared for periods of 2-3 years and linked to multinational budgeting as well as to short-term policy making. In turn, a draft programme prepared by a group of senior statesmen, assisted by high-level experts, a?d subject to public discussion could :jrovide a basis for reaching agreement on structural policies to be carried out during a four-year period corresponding to the tenure of the Commission. In this %ay, medium-term programming could becoai:: a programme of action for the Common Marl&.
1. “Qpenness” and planning on the industry level The European Economic Community was established in 1958, with the participation of countries whose governments professed widely differet;t views a.5 to the desirability of public intervention in business decision-making. At one extreme, the French sought to influence production and investment decisions in the framework of medium-term * The author is indebted to officials at the Commission of the European Economic Community for helpful discussions and comments and to the National Science Foundation for financing the research that ied to the writing of this paper.
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f3. Balassa, Planning and programmbng in the EEC
The consequences of the opening of the French economy were manifest already in the course of the Third Plan f 1958-6 I), in the preparation of which the possible impact of participation in the EEC had been
disregarded. 4 These effects became even more evident during the implementation of the Fourth Plan when the unplanned rise of +ports and the nonfulfillment of export targets were largely responsible for production falling short of expectations. Apart ftom foreign competition in dom estic m arkets, the opening of the French economy also meant that industriaiists increasingly oriented
their activities towards the other Common Market countries. Correspondingly,
as_ the findings of a detailed study show, for French busiof planning physical cohere& of inputs and outputs arply - virtually to the vanishin;; point”. ’
The dimiriished usefulness of Plan targets fol, business decisions and availability of policy instruments to the government, in turn, led Frcncl; business to assert its independence in the decisionmaking process. This found expressicn in a declaration of the Patronat, the organisation of French industrialists; accorciing to which “in matters of the management of business, the authority (for making decisions) cannot be divided... (and) above all, the illusions of a systematic dirigisme whose failure can be now ascertained el:erywhere, should be renounced”. 6 Subsequently, the Patronat attackijd the “myth of the Plan” and suggested that this be limited to providing nonbinding forecasts. : While entry into the Common Market made industry-level planning practically impossible in France, suggestions were made to transplal,gt the French system of planning to the EEC. 8 Some Dbservers predicted that planning cn hhe industry level will indeed be eventually carried out in the Common Market so as to bring “a direct infhience to be,ar upon the production ahd investment decisions in the private sector’“. 9 For reasons to be explained, however, these expectations have not been realized. the reduced
’ Thus, according lo an ofticial document, “the Plan envisaged the maintenance of subsidies to exports, a certain balance between quantitative restrictions and the iiberalisation of trade, and continuing tariff prelection accompanied by special taxes. The concequencer of the establishment of a common market were not taken into account” [Ref. I 1) p.,112. ’ [Ref. 19! p. 435. “, I:;
;;;.
’ Cf.‘ti:g. [def. Sj and (Rzf. 141. 9 Cf. [Ref. 201 p. 90. For an opposing view, see [Ref. 2) pp. 257-262.
B, Baiassa. Planning and programmirtg irt the EEC
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2. Medium-term programming and projections in the EEC, 1962-70
In his oft-quoted speech in Arcachon on May 25, 1962. Robert Marjolin, the Vice-President of the EEC Commission for Economic and Financial Affairs, proposed that planning -- or programming as it has come to be called -_ be undertaken on the Common Market level. lo A few months later in the Action Programme of the Community for the Second Stage, prepared largely under Marjolin’s direction, it was suggested “A community programme is a necessary guide for the plans or programmes being drawn up by a growing number of member cc _mtries; in the first place it will be the outcome of these national plan%and then provide the indispensable framework for them”. I1 And while the Commission “was not proposing that targets should at this juncture be set for individual industries”, I* it did suggest that such targets will need to be formulated in the future with a vB@-w to fitting production to demand and formulating an investment policy. I3 Planning or programming in the Common Market framework was, however, opposed by Ludwig Erhard, the German Chancelior, who not only objected to industry-level targets but conside,red medium-term forecasts to be useless or even harmful. l4 At the same time, since medium-term plans and programmes were not prepared in the EEC member countries other dhan France and Belgium, there was 1ittle:to coordinate on the Common Market level. er important factor .militatirig against industry-level planning was the desire of the Common Market countries to maintain, and even to increase, the openness of their economics. In 195’9, the share of extra-area tirade in the EEC was already comparable to that of France 15 and was considerably higher than it had been in France in the heyday of planning. In the years following, the Common Market agreed to tariff reductions first in the framework of the Dillon Round lo [Ref. 61 pp. 12-14. ’ * [Ref. 2 1 J pbu’~. 99. ’ 2 Ibid. para. 1 i 6. I3 According to the Action Programme, the industry studies in preparation, or to be prepared, were to “leaa’ to certain conclusions which will help, on the one hand, in tailoring the industries in question to fit the estimated future pattern’ of demand, incluaing foreign demand, and, on the other, in iirvestment policy” (Ibid. para. 119). I4 (Ref. 221 pp. SB-56. ’ 5 The share of extraarea exports in production was 16.151 and that of exka-area imports in consumpt:on 7.6% [Ref. 26 J.
B. Baiassa, Planning and programming in the EEC
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3. Projections and realization
A Second Programme of Medium-term Economic Policy was prepared two years later, comprising revisions of forecasts of the First Programme as well as recommendations on structural policies. The recommendations pertain to the adaptation of enterprises to the exigencics of the Common Market and international competition; policies for the major sectors of the economy (particularly agriculture and, withiri manufacturing, naval construction and electronics); research and techncllogica!I development; the financing of investments; and an incomes policy. ” The revisions of tl-c forecasts published in 1969 were of negligible magnitude. Yet, there are substantial differences between projections and realization for the five-year period between 1965 and 1970. For the EEC as a whole, the growth rate of GNP was nearly one percentage point, and the rate of increase of prices two percentage points, higher than the projections. Moreover, increases in private expenditures were underestimated and public expenditures overestimated. The average growth rate of private consumption was more than one percentage point higher, and that of public consumption one-half percentage point lower, than forecast. As a result, the share of private consumpGon increased at the expense of public consumption in the Common Market. While the original projections called for both private and public: consumption to rise by about 22% between 1965 and 1970, the former increased 29% and the latter only 17% (table 1). Private investment also gained at the expense of public investment. For the Common Market as a whole, the original projections envisaged an increase of 34% in private, and 50% in public investment in the 1965-70 period. In actuality, private investment rose nearly twice as much (38%) as public investment (21%). Furthermore, increases in investment in housing (29%) were nearly three times as large as projected (1.1%).
It is further apparent that differences between projections and realization expressed as’ a proportion of GNP, were generally much larger for public than for rivate expenditure. The share of private investment rose slightly more than forecast and tha: of private consumption remained unchanged as against a projected small decline, By contrast, 25 lkuxieme
programme de politique konomique
ZImoyen tetmc
[Ref. 171.
225
B. Balassa,Planningand programming in the EEC Table I’ Projections and realization in the European Common Market, 1965- 1970.a -_--. ..--_I_Gross National Private Public Product COnSUmpFion Consumption ..._cI_--
Belgium
France Germany Italy Luxembourg Netherlands Common Market
--
Pl
PI1
A
PI
PI1
A
PI
Pll
A
4.1 5.4b
4.0 5.4 b 3.3 5.0 3.0 4.8 4.5 b
4.0 5.6 4.7 4.1 3.3 5.0 5.3
3.7 45 35 4.1 3.2 4.0 4.1
3.7 4.6 3.3 4.6 3.0 4.2 4.1
4.5 5.3 4.9 6.3 3.5 5.1 5.3
5.6 4.5 3.1 5.2 2.7 3.1 4.0
5.5 4.3 2.6 5.1 2.7 2.5 3.7
5.1 3.8 2.2 3.8 3.3 2.4 3.2
PI1
A
3.5
5.0 3.3 4.6 4.6b
Private
--I_ PI
Gross Capital Formation -Housing PI1 A -_l_p-4.6 7.3 5.9 8.7 3.7 4.5c 13.1 a.7
PI
PII
Public A
PI
Befgium 4.0 1.6 1.7 --2.4 7.5 6.8 8.6 France 5.8 2.7 2.8 5.9 a.2 8.0 6.6 Germany 3.8 1.0 2.0 4.5c 5.5 3.3 2.0 Italy 12.2 1.4 0.0 8.0 18.4 17.5 4.6 Luxembourg n.a. n.a. 11a n&a. Netherlands 5.7 5.8 8.2 ;:; rl:;. rll”, ;:t ;:“?* ?I2 Common Market 6.1 6.0 6.7 2.1 2.1 5.3 a.5 7.9 9.9 -Sources: Deuxieme programme de politique dconomique Bmoyen terme, J.O. No. L29, May 30, 1969, Table 1. Troisieme programme de politique Cconomique B moyen terme, J.O. No. L49. March 1, 1971, para. 4. Groupe d’btudcs des prospectives dconomiques ;i moyen terme, L ‘&& lution &onomique de la Commurtaute’europdennejusqu ‘en 1975, Brussels, 1971. a Explanation of symbols: PI: Original Projections, PII: Revised Projections, A: Actual. b Adjusted in accordance with the revised French national income statistics. c Data was shown for private investment and housing combined.
public investment and consumption increased much less than GNP although the former was supposed to rise twice as fast, and the latter nearly as rapidly, as the gross national product. The observed trends were rather similar in the individual member countries, the sole exception being Belgium where public investment increased faster than private investment. Belgium was also the only country where the rate of growth of public consumption exceeded that of private consumption and investment in housing declined. At the same time, deviations from the projections were generally
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B. Bak’ w. Planning and programming in the EEC
even greater in the individual countries than for the Common Market as a whole. Yet, there is no evidence that measures would have been taken to ensure conformity with the forecasts. Nor has the Medium-term Economic Policy Gmmittee examined the magnitude and the causes of divergences between projections and realization or suggest policy changes in the member countries for attaining the proposed targets. Also, it is doubtful that the policy recommendations made in the two Programmes had much influence on the decisions actually taken.
4. The third medium-term
programme
I have examined so far questions of industry-level planning and the Common Market experience with medium-term programming during the sixties. There is little expectation that planning on the industry level will again be seriously considered for the EEC. First of all, while the entry of the United Kingdom, Denmark, and Jreland will reduce the share of extra-area trade, the open character of the Common Market will be preserved given the existence of low tariffs on industrial products and the expectation of further reductions. Also, as the example of the United States in the steel, textiles, and shoe industries indicates, the low average share of imports is compatible with rapid shifts in the import shares of individual industries. And, for a variety of Common Market industries, extra-area exports and/or imports will continue to be of considerable importance. At any rate, suggestions made for transplanting the French methods of planning to the Common Market neglected some important differences between the two. Industry-level planning in France was based on close cooperation between the government and business; it was helped by similarities in the background of government officials and businessmen and by the presence of a large number of former government officials in business firms; furthermore, it reflected the long tradition of government intervention in business affairs. Such a tradition does not exist in most of the other EEC countries, the personal contacts are often missing and, most importantly, the size and diversity of industrial patterns in the Common Market would hardly permit the effective coordination of the activities of individual industries. The next question concerns the usefulness of medium-term projections. We have seen that in the 1965-70 period there were substantial
B. Balassa, Planning and programming in the EEC
227
deviations from the projections, especially in the public sector where governments could have however assured that the projections be realized. These results seem to reflect the fact that member country govemments did not take the projections seriously; nor did private industry. 26 New projections were prepared for the 1970-75 period as part of the Third Medium-term Economic Policy Programme. 27 The Programme provides two sets of forecasts for each country: national projections and “quantitative medium-term guide figures consonant with the requirements of compatibility” among the member countries. 2. It is further noted, “The guide figures... indicate the conditions that must be taken into account by the member states in preparing their economic policies if their overall economic developments are to be mutrrally consistent and stability in exchange rates within the Community is to be secured”. 29 These statements would seem to point to a change in the character of programming in the Common Market, representing a return towards the Action Programme of 1962. While in the First Programme the national projections were accepted and the forecast had no normative significance, under the Third Programme countries are supposed to direct their poticies and adapt their plans and programmes so as to conform to the guide figures. Thus, it is stated, “To take account of the guide figures that have been provided, the member states intend to make the necessary amendments in the formulation of their objectives and policies by the time they finalize their plans or programmes for 197 l-75. 3o Moreover, the Programme calls for compulsory consultations to be held prior to the taking of decisions, with a view to the “intro&rction of a 26 The governments did prepare reportsat the midpoint of the period of the First Programme, but these remained rather perfunctory. And while the chances of realizing the projections in the individual countries were briefly discussed, neither the national memoranda nor the memorandum prepared by the Commission considered the incre;msingdivergence of trends that eventually led to the German revaluation and the French devaluatiion. Finally, the experience of the entire 1965-1970 period has not been subject to review. 27 Third Medium-term Economic Policy Programme, 9 February 197 1, 7lIlO7ICEE. The original was published in [Ref. 18 1. 28 Ibid. para. 13. Germany however refused to modify its projections in setting Community targets. Nor have additional changes been made in the guide figures for other countries in order to ensure conformity with the German feures. But, at any [#ate, the Com~nission had no macro-economic model at its disposal for checking the consistency of the forecasts. 29 Ibid. para 14. 3o ibid. para. 49.
B. Bala wa, planning and pmgrantming in the EEC
228
system of early IYarning indicators m conjunction with the compatible medium-term guide fipures”; “fixing of permissible margins for fluctuations in the economic trend”; and “review of the implementation of the medium-term guide figures and periodical forward projection of these figures”. 3i There is no evidence, however, that these provisions would have found practical application. To begin with, no agreement has been reached on compuisoty advance consultations. Nor have the guide figures been subject to rcvirw, with recommendations made for policy changes in the mcmbl:r countr&s in case of deviations from the targets. Also, national governments have shawl, little willingness to base their plans and policies on the guide figures contained in the Third Programme. Rather, as the events of the year 197 I sup,gest, in case of a conflict, the individual governments tend to take actions in accordance with what they consider to be the national interest. 32 The adjustment in exchange rates in December 197 1 reflects the continuing lack of compatibility of price trends among the Common Market countries; the floating of the exchange rates of a prospective member country, Britain, provides a further indication of this fact. Yet, in the Third Programme, compatibility was understood to mean primarily conformity in price trends that would ensure the maintenance of fixed exchange rates within the Community. 33 Similarities in price movements and the fixity of exchange rates are however neither a necessary nor a sufficient condition for the attainment oi structural policy objectives that can be considered to be the proper domain of a medium-term economic policy. In fact, in the absence of political integration, the compatibility of price trends and the maintenance of fixed exchange rates are not only unrealistic objectives but their pursuit will tend to create stresses and strains in the Community and detract attention from fields of action where progress could be made. 34 Thus, with the emphasis on the conformity of price 3* Ibid. para. 105. 32 Cf. IRef. 41 pp. ll-12.35-38. ’ 33 According to the Third Programme “The principal problem to be faced in pursuing the objective of compatibilitrl is constituted by the tread in prices”. Third Medium-term Economic Pdicy Programme, para. 48 [Ref. 181. Elsewhere, it is suggested that “The guide fiires relating to prices Ire fundamental for the elaboration of economic policies intended to be compatible. The price indicator mP*“isarily has a normative character which increases the technical difficultgs of forecasting. But there must in any case be a common fwure which is consonant with the objectives and the internal possibilities of the Community” (Ibid. para. 44). 34 [Ref. 4 ] pp.42-43.
B. Balassa, Planning and programming in the EEC
229
changes in the Third Programme, the structural policies to be under-: taken in the Community have remained in the background and the successive exchange rate crises have interfered witil the pursuit of structural objectives.
5. Programming and policy-making The question remains if the projections prepared in the Common Market every five years can be useful for private and public decisic imaking. As regards the private sector, the procedures applied in making projections have several major shortcomings. First of all, the emphasis on the target element has led to the publication of a narrow range of figures - generally within one-half of one percentage point - while business would need to be apprised of possible upward and downward deviations outside this range. Second, a five-year time period is at the same time too long and too short; it is too ilong because it introduces considerable error possibilities as compared to 2-3 year forecasts that suffice for guiding production and export decisions; and it is too short because for making investment decisions business needs to look 8- 10 years ahead. Last but not least, fixed term projections will be of little use for business decisions which need forecasts with a moving horizon. Nor do five-year projections have much operational value for public decision-making. Multi-annual budgeting is a valuable tool and it requires making forecasts on general economic activity. But, the practical usefulness of multi-annual budgets declines to a considerable extent if these extend beyond 2-3 years. Thus, decisions on taxes and expenditures can hardly be made for longer periods, in part because of the error possibilities involved in the forecasts and in part because of the implications of the “election cycle” for taxation and public expenditure. And, again, multi-annual budgeting would necessitate making projections with a moving rather than a fixed horizon. Nonetheless, less detailed projections extending over a longer period may be useful in providing a basis for the discussion of possible changes in the share and pattern of public expenditure. But, especially in the case of public inver;tment, one may wish to look 8-- 10 years ahead just as in the case of private investment decisions. A further consideration is the need to link short-term and mediumterm forecasts. It is hardly surprising that this is not done in the frame-
230
B. Bcrlassa,Plannrng and pnqyammtnil: k the EEC
work of Community programmin g, since five-year projections and particularly those with a fixed horizon are not suitable for this purpose. 3~ However, two or three-year projections with a moving horizon could be linked with short-term forecasts and budgets. Turning to the experience of individual countries, experimentation with alternarive models at the Dutch Plan Bureau confirms the conclusions that error possibilities increase sharply if the projections extend beyond three years. Correspondingly, in the Netherlands emphasis is given to 2-3 year forecasts that are linked with annual projections and budgets. Amlong the prospzctivc member countries, in the United Kingdom projections and public budgets are prepared with a moving horizon. In Germany, too, work is concentrated on mJti-annual budgets with a moving horizon. By placing emphasis on forecasts for reiatiwely short periods and with a moving horizon, these countries have been able to make projections that are of operational -lalue for public decision-making. By contrast, countries such as Belgium, France, and Italy which prepare S-year programmes with a fixed horizon, do not have multi-annual budgets and these prqgrammes bear little relationship to short-term decision-making. However, the French Ministry of the Economy and Financial Affairs reportedly plans making three-year projections, with a view to engage in , multi-annual budgeting, which would further diminish the role played by the five-year plan in France. These conclusions bring into question the usefulness of fixed term five-year projections in the EEC countries. While such projections can be of value in determining the main lines of economic activity in a country during a period of rapid structural change (such as postwar reconstruction) and under autarchy, they have limited usefulness for public and private decision-making in an open market economy. The conclusions apply a fortiori at the Common Market level, and further gain in force if we consider the increased diversity of the enlarged Community as far as programming is concerned. Among the new member countries, the spectrum ranges tram a country that makes no medium-term forecasts (Denmark) to one where programmes for public expenditure are prepared using a moving horizon (United Kingdom).
35 Nevertheless,researchis presently under way on the problem in the framework of the COMETproject csmm&ioned by the EECCommission.
R. Boba,
Pknning ond ptwgramming in the EEC
231
6. The policy guidelines While according to the Programme “by accepting the overall Community guide figures, the member countries lay the foundation for a better management of their economies and for a mor‘e realistic and more ambitious programming of structural changes”, 36 the policy recommendations contained in the Programme bear little relationship to the guide figures. They can and must 13ejudged independentlv and their realization does not guarantee that the quantitative targets will atso be reached Ec)r are quantitative targets necessary for formulating structL al policies. These observations apply equally well to the guidelines contained in the Third Programme for the policies of the member countries and of the Community. At the same time, the policy guidelines for the individual member countries vary in scope as well as in quality. The Commission does not have the capacity to analyze in detail the situation in each member country, and the guidelines are largely based on information made available by the country concerned. In one case, they were compiled from the country’s medium-term programme, in another they were largely written by the country’s government, Nor does the Commission, or the Medium-term Economic Policy Committee, plan to follow up the conformity of’the member countries’ policies to the guidelines. At any rate, member country governments do not appear to take them seriously. It has been reported, for example, that the French Minister of the Economy and Financial Affairs objects to the published guidelines and has taken no account of them in making policy decisions. In these circumstances, the guidelines for the individual member countries have only heuristic value. In turn, the guidelines for the Community itself contain a list of desirable measures, most of which were proposed already on earlier occasions. However, it has no time horizon and does not constitute an action programme. In fact, at least in the case of regional policy, the recommendations do not reflect the views of all the services in the Commission which deal with regional affairs. All in all, doubts arise about the usefulness of theThird Programme exercise. Projections based on the expectations of compatible price trends and unchanged intra-Community exchalnge rates can do more 36 Third Medium-term Economic Policy Programme, para. 24
[Ref. 181.
232
B. &lossa. Planning and programming in the EEC
harm than good while guidelines that do not constitute a programme for action and arc not subject to continuing review, will have limited
usefulness. Thus, while the Programme is said to have propaganda value, it could have the opposite effect as the lack of realization of its objectives might be taken as a sign of failure. It should be adder? that the Third Programme has the double disddvantage of being an agreed-upon document, representing a series of compromises, and of not having operational significance. Both of these deficiencies could be remedied if it were restructured to provide policy options for public discussion and for decision by the Council of Ministers for a period preferably corresponding to the tenure of the Commission. In this way, public opinion in the Common Market countries may be brought to bear on the choices made and the Commission’s work for
the period in question could be based on the action pragramme. It would further seem desirable that a draft progrramme containing the policy options be prepared by a group of senior statesmen, assisted by high-level experts, who would however not represent national governments. This procedure, followed successfully during the 1950’s could generate new momentum in European integration by providing a moral force to back up the recommendations. The Community’s action programme on structural policies will have the greatest impact if it focuses on a few major issues rather than providing a “shopping list” of desirable med$ures. These issues would have to be selected on the basis of their importance and the chances for progress during the period in question. They should also extend beyond the purely exonomic spk.ere, to cover social and political questions. The action progrnmme need not be related to medium-term projections. Such projections will nevertheless fulfil a useful function if they provide a basis for multi-annual budgeting and are linked to short-term forecasts and policies. They could also be adapted so as to provide information for private dc cision-making. These objectives can be served by making projections for three-year periods with a r;loving horizon and linking them with one-year forecasts and budgets. Less detailed forecasts could however be made for longer periods, possibly for 8- 10 years, with an indication of the margins of error.
B. l?aiiww.Planning and pwgrammbg in rhe EEC
233’
References 11J Bela Balassa, Whither French planning? Quarterly Journal of Economies, Nov. 1965. 12J Bela Balassa, Planning in an open economy, Kyklos, 1966 (3). [3] Bela Mass, The structure of protection in Industrial countries and its effects on the exports of processed goods for developing countries, in The Kennedy Round: estimated effects on tariff barriers, United Nations, New York, 1968. 14) Be& Balassa, Monetary integration in the European Common Market. Paper prepared for th,e conference on Europe and the Evolution of the International Monetary System, Geneva, 13-15 Jan, 1972. (S ] Jean B&ud. Le march6 commun europt!en et l’avenir de la planification fransaise, Revue Economique, Sept. 1964. l6] Bulletin de la Communauti Economique Europeenne, Faut-il un plain europeen? July 196’2. 17) BuLletinde la Communautd Economique Europeenne, 1963 (8). (81 CEPES, French and other national economic plans for growth, Committee for Economic Development, New York, 1963. [9] Commerce exttrieur - Tableaux analytiques, Luxembourg, 1960. [ 101 Commisariat General du Plan et des Services Economiques et Financi&res, L’Equilibre ecoaomique en 1961, Paris, July 1957, mimeo. [ 11) Commisariat g&r&al du plan et des services des itudes economiques et fmanciires, Projet de rapport du groupe de la commission de l’economie g&&ale du fmancement du Plan, Paris, June 1961, mimeo. [ 12 J Dechuation du Conseil National du Patronat Fran@s, 19 Jan. 1965, in Le Monde, 20 Jan. 1965. [ 131 De la .forme et des mkhodes d’un plan national dans un systbme d’iconomie de marchi, Patronat Franqais, Jan. 1965. 114) Etienne Hirsch, French planning and its European application, Journal of Common Market Studies,Vol. 1, No. 2, 1962. I1 5 1 Journal Ofticiel des Communauds Europiennes (J.O.) 22 Aptit 1964. [ 16] J.O. 25 April 1967. [ 171 J.O. 30 May 1969. 1181 J.O. 1 March1971. (19) J.H. McArthur and B.R. Scott, Industrial planning in France, Graduate School of Business Administration, Harvard, 1969. [20) D.L. MacLachlan and D. Swann, Pro@amming and competition in the European communities, Economic Journal, March 1964, 1211 Memorandum of the Commission on the Action Programme of the Community for the Second Stage, Brusseb, 24 Oct. 1962. 1221 Parliament Europeen, Dibats Sessions 1962--63. [231 Perspectives de developpement &onomiquc dans le CEE jusqu’au 1970, Brussels, April 1966. (241 hogramme de politique economique i moyen terme (1966- 1970), Brussels, 1967. 1251 Rapport du sous-commiti politique iconomique i moyen terme sur le projet de programme de politique dconomiquc H moyen terme, 1965- 1970, Le comite economique et social CE S/212/66, Brussels, 17 Oct. 1966. 1261 Tableaux entrees-sorties pour les pays de la communaute Cconomique europ&nne, Office statistiques des communautes eurotn?ennes. Luxembourg, 1964.
Nart h-Holland Publishing Company
i%,,
PLANNING AND PROGRAMMlNG IN THE EUROPEAN COMMON MARKET
Johns Hopkins
Bela BALASSA * University. Baldmore,
Maryland, U.S.A.
Received October 1972
This paper has examined the experience of the European Common Market with mediumterm planning and programming since its establishment in 1968. It has been shown that pbnning on the industry level and an inward+riented economic policy are closely interrelated and that French planning was successful in a moreor-less autarchical environment. With entr) into the Common Market, however, much of the usefulness of French planning has disappeared. In turn, its generally outward-looking stance, reflecting the interests of the other EEC countries in trade with non-member nations, has not been conducive to applying French methods or, planning on the Common Market level. Programming in the EEC has been largely limited to the preparation of five-year projections and guidelines for policy making. But there have been substantial differences between projections and realization, and the projections have been of little value for public and private decision-making. Nor is there evidence that the Community’s policy guidelines would have been followed by member country govcrnments. The usefulnessof projections could be enhanced if these were prepared for periods of 2-3 years and linked to multinational budgeting as well as to short-term policy making. In turn, a draft programme prepared by a group of senior statesmen, assisted by high-level experts, a?d subject to public discussion could :jrovide a basis for reaching agreement on structural policies to be carried out during a four-year period corresponding to the tenure of the Commission. In this %ay, medium-term programming could becoai:: a programme of action for the Common Marl&.
1. “Qpenness” and planning on the industry level The European Economic Community was established in 1958, with the participation of countries whose governments professed widely differet;t views a.5 to the desirability of public intervention in business decision-making. At one extreme, the French sought to influence production and investment decisions in the framework of medium-term * The author is indebted to officials at the Commission of the European Economic Community for helpful discussions and comments and to the National Science Foundation for financing the research that ied to the writing of this paper.
220
f3. Balassa, Planning and programmbng in the EEC
The consequences of the opening of the French economy were manifest already in the course of the Third Plan f 1958-6 I), in the preparation of which the possible impact of participation in the EEC had been
disregarded. 4 These effects became even more evident during the implementation of the Fourth Plan when the unplanned rise of +ports and the nonfulfillment of export targets were largely responsible for production falling short of expectations. Apart ftom foreign competition in dom estic m arkets, the opening of the French economy also meant that industriaiists increasingly oriented
their activities towards the other Common Market countries. Correspondingly,
as_ the findings of a detailed study show, for French busiof planning physical cohere& of inputs and outputs arply - virtually to the vanishin;; point”. ’
The dimiriished usefulness of Plan targets fol, business decisions and availability of policy instruments to the government, in turn, led Frcncl; business to assert its independence in the decisionmaking process. This found expressicn in a declaration of the Patronat, the organisation of French industrialists; accorciing to which “in matters of the management of business, the authority (for making decisions) cannot be divided... (and) above all, the illusions of a systematic dirigisme whose failure can be now ascertained el:erywhere, should be renounced”. 6 Subsequently, the Patronat attackijd the “myth of the Plan” and suggested that this be limited to providing nonbinding forecasts. : While entry into the Common Market made industry-level planning practically impossible in France, suggestions were made to transplal,gt the French system of planning to the EEC. 8 Some Dbservers predicted that planning cn hhe industry level will indeed be eventually carried out in the Common Market so as to bring “a direct infhience to be,ar upon the production ahd investment decisions in the private sector’“. 9 For reasons to be explained, however, these expectations have not been realized. the reduced
’ Thus, according lo an ofticial document, “the Plan envisaged the maintenance of subsidies to exports, a certain balance between quantitative restrictions and the iiberalisation of trade, and continuing tariff prelection accompanied by special taxes. The concequencer of the establishment of a common market were not taken into account” [Ref. I 1) p.,112. ’ [Ref. 19! p. 435. “, I:;
;;;.
’ Cf.‘ti:g. [def. Sj and (Rzf. 141. 9 Cf. [Ref. 201 p. 90. For an opposing view, see [Ref. 2) pp. 257-262.
B, Baiassa. Planning and programmirtg irt the EEC
221
2. Medium-term programming and projections in the EEC, 1962-70
In his oft-quoted speech in Arcachon on May 25, 1962. Robert Marjolin, the Vice-President of the EEC Commission for Economic and Financial Affairs, proposed that planning -- or programming as it has come to be called -_ be undertaken on the Common Market level. lo A few months later in the Action Programme of the Community for the Second Stage, prepared largely under Marjolin’s direction, it was suggested “A community programme is a necessary guide for the plans or programmes being drawn up by a growing number of member cc _mtries; in the first place it will be the outcome of these national plan%and then provide the indispensable framework for them”. I1 And while the Commission “was not proposing that targets should at this juncture be set for individual industries”, I* it did suggest that such targets will need to be formulated in the future with a vB@-w to fitting production to demand and formulating an investment policy. I3 Planning or programming in the Common Market framework was, however, opposed by Ludwig Erhard, the German Chancelior, who not only objected to industry-level targets but conside,red medium-term forecasts to be useless or even harmful. l4 At the same time, since medium-term plans and programmes were not prepared in the EEC member countries other dhan France and Belgium, there was 1ittle:to coordinate on the Common Market level. er important factor .militatirig against industry-level planning was the desire of the Common Market countries to maintain, and even to increase, the openness of their economics. In 195’9, the share of extra-area tirade in the EEC was already comparable to that of France 15 and was considerably higher than it had been in France in the heyday of planning. In the years following, the Common Market agreed to tariff reductions first in the framework of the Dillon Round lo [Ref. 61 pp. 12-14. ’ * [Ref. 2 1 J pbu’~. 99. ’ 2 Ibid. para. 1 i 6. I3 According to the Action Programme, the industry studies in preparation, or to be prepared, were to “leaa’ to certain conclusions which will help, on the one hand, in tailoring the industries in question to fit the estimated future pattern’ of demand, incluaing foreign demand, and, on the other, in iirvestment policy” (Ibid. para. 119). I4 (Ref. 221 pp. SB-56. ’ 5 The share of extraarea exports in production was 16.151 and that of exka-area imports in consumpt:on 7.6% [Ref. 26 J.
B. Baiassa, Planning and programming in the EEC
224
3. Projections and realization
A Second Programme of Medium-term Economic Policy was prepared two years later, comprising revisions of forecasts of the First Programme as well as recommendations on structural policies. The recommendations pertain to the adaptation of enterprises to the exigencics of the Common Market and international competition; policies for the major sectors of the economy (particularly agriculture and, withiri manufacturing, naval construction and electronics); research and techncllogica!I development; the financing of investments; and an incomes policy. ” The revisions of tl-c forecasts published in 1969 were of negligible magnitude. Yet, there are substantial differences between projections and realization for the five-year period between 1965 and 1970. For the EEC as a whole, the growth rate of GNP was nearly one percentage point, and the rate of increase of prices two percentage points, higher than the projections. Moreover, increases in private expenditures were underestimated and public expenditures overestimated. The average growth rate of private consumption was more than one percentage point higher, and that of public consumption one-half percentage point lower, than forecast. As a result, the share of private consumpGon increased at the expense of public consumption in the Common Market. While the original projections called for both private and public: consumption to rise by about 22% between 1965 and 1970, the former increased 29% and the latter only 17% (table 1). Private investment also gained at the expense of public investment. For the Common Market as a whole, the original projections envisaged an increase of 34% in private, and 50% in public investment in the 1965-70 period. In actuality, private investment rose nearly twice as much (38%) as public investment (21%). Furthermore, increases in investment in housing (29%) were nearly three times as large as projected (1.1%).
It is further apparent that differences between projections and realization expressed as’ a proportion of GNP, were generally much larger for public than for rivate expenditure. The share of private investment rose slightly more than forecast and tha: of private consumption remained unchanged as against a projected small decline, By contrast, 25 lkuxieme
programme de politique konomique
ZImoyen tetmc
[Ref. 171.
225
B. Balassa,Planningand programming in the EEC Table I’ Projections and realization in the European Common Market, 1965- 1970.a -_--. ..--_I_Gross National Private Public Product COnSUmpFion Consumption ..._cI_--
Belgium
France Germany Italy Luxembourg Netherlands Common Market
--
Pl
PI1
A
PI
PI1
A
PI
Pll
A
4.1 5.4b
4.0 5.4 b 3.3 5.0 3.0 4.8 4.5 b
4.0 5.6 4.7 4.1 3.3 5.0 5.3
3.7 45 35 4.1 3.2 4.0 4.1
3.7 4.6 3.3 4.6 3.0 4.2 4.1
4.5 5.3 4.9 6.3 3.5 5.1 5.3
5.6 4.5 3.1 5.2 2.7 3.1 4.0
5.5 4.3 2.6 5.1 2.7 2.5 3.7
5.1 3.8 2.2 3.8 3.3 2.4 3.2
PI1
A
3.5
5.0 3.3 4.6 4.6b
Private
--I_ PI
Gross Capital Formation -Housing PI1 A -_l_p-4.6 7.3 5.9 8.7 3.7 4.5c 13.1 a.7
PI
PII
Public A
PI
Befgium 4.0 1.6 1.7 --2.4 7.5 6.8 8.6 France 5.8 2.7 2.8 5.9 a.2 8.0 6.6 Germany 3.8 1.0 2.0 4.5c 5.5 3.3 2.0 Italy 12.2 1.4 0.0 8.0 18.4 17.5 4.6 Luxembourg n.a. n.a. 11a n&a. Netherlands 5.7 5.8 8.2 ;:; rl:;. rll”, ;:t ;:“?* ?I2 Common Market 6.1 6.0 6.7 2.1 2.1 5.3 a.5 7.9 9.9 -Sources: Deuxieme programme de politique dconomique Bmoyen terme, J.O. No. L29, May 30, 1969, Table 1. Troisieme programme de politique Cconomique B moyen terme, J.O. No. L49. March 1, 1971, para. 4. Groupe d’btudcs des prospectives dconomiques ;i moyen terme, L ‘&& lution &onomique de la Commurtaute’europdennejusqu ‘en 1975, Brussels, 1971. a Explanation of symbols: PI: Original Projections, PII: Revised Projections, A: Actual. b Adjusted in accordance with the revised French national income statistics. c Data was shown for private investment and housing combined.
public investment and consumption increased much less than GNP although the former was supposed to rise twice as fast, and the latter nearly as rapidly, as the gross national product. The observed trends were rather similar in the individual member countries, the sole exception being Belgium where public investment increased faster than private investment. Belgium was also the only country where the rate of growth of public consumption exceeded that of private consumption and investment in housing declined. At the same time, deviations from the projections were generally
226
B. Bak’ w. Planning and programming in the EEC
even greater in the individual countries than for the Common Market as a whole. Yet, there is no evidence that measures would have been taken to ensure conformity with the forecasts. Nor has the Medium-term Economic Policy Gmmittee examined the magnitude and the causes of divergences between projections and realization or suggest policy changes in the member countries for attaining the proposed targets. Also, it is doubtful that the policy recommendations made in the two Programmes had much influence on the decisions actually taken.
4. The third medium-term
programme
I have examined so far questions of industry-level planning and the Common Market experience with medium-term programming during the sixties. There is little expectation that planning on the industry level will again be seriously considered for the EEC. First of all, while the entry of the United Kingdom, Denmark, and Jreland will reduce the share of extra-area trade, the open character of the Common Market will be preserved given the existence of low tariffs on industrial products and the expectation of further reductions. Also, as the example of the United States in the steel, textiles, and shoe industries indicates, the low average share of imports is compatible with rapid shifts in the import shares of individual industries. And, for a variety of Common Market industries, extra-area exports and/or imports will continue to be of considerable importance. At any rate, suggestions made for transplanting the French methods of planning to the Common Market neglected some important differences between the two. Industry-level planning in France was based on close cooperation between the government and business; it was helped by similarities in the background of government officials and businessmen and by the presence of a large number of former government officials in business firms; furthermore, it reflected the long tradition of government intervention in business affairs. Such a tradition does not exist in most of the other EEC countries, the personal contacts are often missing and, most importantly, the size and diversity of industrial patterns in the Common Market would hardly permit the effective coordination of the activities of individual industries. The next question concerns the usefulness of medium-term projections. We have seen that in the 1965-70 period there were substantial
B. Balassa, Planning and programming in the EEC
227
deviations from the projections, especially in the public sector where governments could have however assured that the projections be realized. These results seem to reflect the fact that member country govemments did not take the projections seriously; nor did private industry. 26 New projections were prepared for the 1970-75 period as part of the Third Medium-term Economic Policy Programme. 27 The Programme provides two sets of forecasts for each country: national projections and “quantitative medium-term guide figures consonant with the requirements of compatibility” among the member countries. 2. It is further noted, “The guide figures... indicate the conditions that must be taken into account by the member states in preparing their economic policies if their overall economic developments are to be mutrrally consistent and stability in exchange rates within the Community is to be secured”. 29 These statements would seem to point to a change in the character of programming in the Common Market, representing a return towards the Action Programme of 1962. While in the First Programme the national projections were accepted and the forecast had no normative significance, under the Third Programme countries are supposed to direct their poticies and adapt their plans and programmes so as to conform to the guide figures. Thus, it is stated, “To take account of the guide figures that have been provided, the member states intend to make the necessary amendments in the formulation of their objectives and policies by the time they finalize their plans or programmes for 197 l-75. 3o Moreover, the Programme calls for compulsory consultations to be held prior to the taking of decisions, with a view to the “intro&rction of a 26 The governments did prepare reportsat the midpoint of the period of the First Programme, but these remained rather perfunctory. And while the chances of realizing the projections in the individual countries were briefly discussed, neither the national memoranda nor the memorandum prepared by the Commission considered the incre;msingdivergence of trends that eventually led to the German revaluation and the French devaluatiion. Finally, the experience of the entire 1965-1970 period has not been subject to review. 27 Third Medium-term Economic Policy Programme, 9 February 197 1, 7lIlO7ICEE. The original was published in [Ref. 18 1. 28 Ibid. para. 13. Germany however refused to modify its projections in setting Community targets. Nor have additional changes been made in the guide figures for other countries in order to ensure conformity with the German feures. But, at any [#ate, the Com~nission had no macro-economic model at its disposal for checking the consistency of the forecasts. 29 Ibid. para 14. 3o ibid. para. 49.
B. Bala wa, planning and pmgrantming in the EEC
228
system of early IYarning indicators m conjunction with the compatible medium-term guide fipures”; “fixing of permissible margins for fluctuations in the economic trend”; and “review of the implementation of the medium-term guide figures and periodical forward projection of these figures”. 3i There is no evidence, however, that these provisions would have found practical application. To begin with, no agreement has been reached on compuisoty advance consultations. Nor have the guide figures been subject to rcvirw, with recommendations made for policy changes in the mcmbl:r countr&s in case of deviations from the targets. Also, national governments have shawl, little willingness to base their plans and policies on the guide figures contained in the Third Programme. Rather, as the events of the year 197 I sup,gest, in case of a conflict, the individual governments tend to take actions in accordance with what they consider to be the national interest. 32 The adjustment in exchange rates in December 197 1 reflects the continuing lack of compatibility of price trends among the Common Market countries; the floating of the exchange rates of a prospective member country, Britain, provides a further indication of this fact. Yet, in the Third Programme, compatibility was understood to mean primarily conformity in price trends that would ensure the maintenance of fixed exchange rates within the Community. 33 Similarities in price movements and the fixity of exchange rates are however neither a necessary nor a sufficient condition for the attainment oi structural policy objectives that can be considered to be the proper domain of a medium-term economic policy. In fact, in the absence of political integration, the compatibility of price trends and the maintenance of fixed exchange rates are not only unrealistic objectives but their pursuit will tend to create stresses and strains in the Community and detract attention from fields of action where progress could be made. 34 Thus, with the emphasis on the conformity of price 3* Ibid. para. 105. 32 Cf. IRef. 41 pp. ll-12.35-38. ’ 33 According to the Third Programme “The principal problem to be faced in pursuing the objective of compatibilitrl is constituted by the tread in prices”. Third Medium-term Economic Pdicy Programme, para. 48 [Ref. 181. Elsewhere, it is suggested that “The guide fiires relating to prices Ire fundamental for the elaboration of economic policies intended to be compatible. The price indicator mP*“isarily has a normative character which increases the technical difficultgs of forecasting. But there must in any case be a common fwure which is consonant with the objectives and the internal possibilities of the Community” (Ibid. para. 44). 34 [Ref. 4 ] pp.42-43.
B. Balassa, Planning and programming in the EEC
229
changes in the Third Programme, the structural policies to be under-: taken in the Community have remained in the background and the successive exchange rate crises have interfered witil the pursuit of structural objectives.
5. Programming and policy-making The question remains if the projections prepared in the Common Market every five years can be useful for private and public decisic imaking. As regards the private sector, the procedures applied in making projections have several major shortcomings. First of all, the emphasis on the target element has led to the publication of a narrow range of figures - generally within one-half of one percentage point - while business would need to be apprised of possible upward and downward deviations outside this range. Second, a five-year time period is at the same time too long and too short; it is too ilong because it introduces considerable error possibilities as compared to 2-3 year forecasts that suffice for guiding production and export decisions; and it is too short because for making investment decisions business needs to look 8- 10 years ahead. Last but not least, fixed term projections will be of little use for business decisions which need forecasts with a moving horizon. Nor do five-year projections have much operational value for public decision-making. Multi-annual budgeting is a valuable tool and it requires making forecasts on general economic activity. But, the practical usefulness of multi-annual budgets declines to a considerable extent if these extend beyond 2-3 years. Thus, decisions on taxes and expenditures can hardly be made for longer periods, in part because of the error possibilities involved in the forecasts and in part because of the implications of the “election cycle” for taxation and public expenditure. And, again, multi-annual budgeting would necessitate making projections with a moving rather than a fixed horizon. Nonetheless, less detailed projections extending over a longer period may be useful in providing a basis for the discussion of possible changes in the share and pattern of public expenditure. But, especially in the case of public inver;tment, one may wish to look 8-- 10 years ahead just as in the case of private investment decisions. A further consideration is the need to link short-term and mediumterm forecasts. It is hardly surprising that this is not done in the frame-
230
B. Bcrlassa,Plannrng and pnqyammtnil: k the EEC
work of Community programmin g, since five-year projections and particularly those with a fixed horizon are not suitable for this purpose. 3~ However, two or three-year projections with a moving horizon could be linked with short-term forecasts and budgets. Turning to the experience of individual countries, experimentation with alternarive models at the Dutch Plan Bureau confirms the conclusions that error possibilities increase sharply if the projections extend beyond three years. Correspondingly, in the Netherlands emphasis is given to 2-3 year forecasts that are linked with annual projections and budgets. Amlong the prospzctivc member countries, in the United Kingdom projections and public budgets are prepared with a moving horizon. In Germany, too, work is concentrated on mJti-annual budgets with a moving horizon. By placing emphasis on forecasts for reiatiwely short periods and with a moving horizon, these countries have been able to make projections that are of operational -lalue for public decision-making. By contrast, countries such as Belgium, France, and Italy which prepare S-year programmes with a fixed horizon, do not have multi-annual budgets and these prqgrammes bear little relationship to short-term decision-making. However, the French Ministry of the Economy and Financial Affairs reportedly plans making three-year projections, with a view to engage in , multi-annual budgeting, which would further diminish the role played by the five-year plan in France. These conclusions bring into question the usefulness of fixed term five-year projections in the EEC countries. While such projections can be of value in determining the main lines of economic activity in a country during a period of rapid structural change (such as postwar reconstruction) and under autarchy, they have limited usefulness for public and private decision-making in an open market economy. The conclusions apply a fortiori at the Common Market level, and further gain in force if we consider the increased diversity of the enlarged Community as far as programming is concerned. Among the new member countries, the spectrum ranges tram a country that makes no medium-term forecasts (Denmark) to one where programmes for public expenditure are prepared using a moving horizon (United Kingdom).
35 Nevertheless,researchis presently under way on the problem in the framework of the COMETproject csmm&ioned by the EECCommission.
R. Boba,
Pknning ond ptwgramming in the EEC
231
6. The policy guidelines While according to the Programme “by accepting the overall Community guide figures, the member countries lay the foundation for a better management of their economies and for a mor‘e realistic and more ambitious programming of structural changes”, 36 the policy recommendations contained in the Programme bear little relationship to the guide figures. They can and must 13ejudged independentlv and their realization does not guarantee that the quantitative targets will atso be reached Ec)r are quantitative targets necessary for formulating structL al policies. These observations apply equally well to the guidelines contained in the Third Programme for the policies of the member countries and of the Community. At the same time, the policy guidelines for the individual member countries vary in scope as well as in quality. The Commission does not have the capacity to analyze in detail the situation in each member country, and the guidelines are largely based on information made available by the country concerned. In one case, they were compiled from the country’s medium-term programme, in another they were largely written by the country’s government, Nor does the Commission, or the Medium-term Economic Policy Committee, plan to follow up the conformity of’the member countries’ policies to the guidelines. At any rate, member country governments do not appear to take them seriously. It has been reported, for example, that the French Minister of the Economy and Financial Affairs objects to the published guidelines and has taken no account of them in making policy decisions. In these circumstances, the guidelines for the individual member countries have only heuristic value. In turn, the guidelines for the Community itself contain a list of desirable measures, most of which were proposed already on earlier occasions. However, it has no time horizon and does not constitute an action programme. In fact, at least in the case of regional policy, the recommendations do not reflect the views of all the services in the Commission which deal with regional affairs. All in all, doubts arise about the usefulness of theThird Programme exercise. Projections based on the expectations of compatible price trends and unchanged intra-Community exchalnge rates can do more 36 Third Medium-term Economic Policy Programme, para. 24
[Ref. 181.
232
B. &lossa. Planning and programming in the EEC
harm than good while guidelines that do not constitute a programme for action and arc not subject to continuing review, will have limited
usefulness. Thus, while the Programme is said to have propaganda value, it could have the opposite effect as the lack of realization of its objectives might be taken as a sign of failure. It should be adder? that the Third Programme has the double disddvantage of being an agreed-upon document, representing a series of compromises, and of not having operational significance. Both of these deficiencies could be remedied if it were restructured to provide policy options for public discussion and for decision by the Council of Ministers for a period preferably corresponding to the tenure of the Commission. In this way, public opinion in the Common Market countries may be brought to bear on the choices made and the Commission’s work for
the period in question could be based on the action pragramme. It would further seem desirable that a draft progrramme containing the policy options be prepared by a group of senior statesmen, assisted by high-level experts, who would however not represent national governments. This procedure, followed successfully during the 1950’s could generate new momentum in European integration by providing a moral force to back up the recommendations. The Community’s action programme on structural policies will have the greatest impact if it focuses on a few major issues rather than providing a “shopping list” of desirable med$ures. These issues would have to be selected on the basis of their importance and the chances for progress during the period in question. They should also extend beyond the purely exonomic spk.ere, to cover social and political questions. The action progrnmme need not be related to medium-term projections. Such projections will nevertheless fulfil a useful function if they provide a basis for multi-annual budgeting and are linked to short-term forecasts and policies. They could also be adapted so as to provide information for private dc cision-making. These objectives can be served by making projections for three-year periods with a r;loving horizon and linking them with one-year forecasts and budgets. Less detailed forecasts could however be made for longer periods, possibly for 8- 10 years, with an indication of the margins of error.
B. l?aiiww.Planning and pwgrammbg in rhe EEC
233’
References 11J Bela Balassa, Whither French planning? Quarterly Journal of Economies, Nov. 1965. 12J Bela Balassa, Planning in an open economy, Kyklos, 1966 (3). [3] Bela Mass, The structure of protection in Industrial countries and its effects on the exports of processed goods for developing countries, in The Kennedy Round: estimated effects on tariff barriers, United Nations, New York, 1968. 14) Be& Balassa, Monetary integration in the European Common Market. Paper prepared for th,e conference on Europe and the Evolution of the International Monetary System, Geneva, 13-15 Jan, 1972. (S ] Jean B&ud. Le march6 commun europt!en et l’avenir de la planification fransaise, Revue Economique, Sept. 1964. l6] Bulletin de la Communauti Economique Europeenne, Faut-il un plain europeen? July 196’2. 17) BuLletinde la Communautd Economique Europeenne, 1963 (8). (81 CEPES, French and other national economic plans for growth, Committee for Economic Development, New York, 1963. [9] Commerce exttrieur - Tableaux analytiques, Luxembourg, 1960. [ 101 Commisariat General du Plan et des Services Economiques et Financi&res, L’Equilibre ecoaomique en 1961, Paris, July 1957, mimeo. [ 11) Commisariat g&r&al du plan et des services des itudes economiques et fmanciires, Projet de rapport du groupe de la commission de l’economie g&&ale du fmancement du Plan, Paris, June 1961, mimeo. [ 12 J Dechuation du Conseil National du Patronat Fran@s, 19 Jan. 1965, in Le Monde, 20 Jan. 1965. [ 131 De la .forme et des mkhodes d’un plan national dans un systbme d’iconomie de marchi, Patronat Franqais, Jan. 1965. 114) Etienne Hirsch, French planning and its European application, Journal of Common Market Studies,Vol. 1, No. 2, 1962. I1 5 1 Journal Ofticiel des Communauds Europiennes (J.O.) 22 Aptit 1964. [ 16] J.O. 25 April 1967. [ 171 J.O. 30 May 1969. 1181 J.O. 1 March1971. (19) J.H. McArthur and B.R. Scott, Industrial planning in France, Graduate School of Business Administration, Harvard, 1969. [20) D.L. MacLachlan and D. Swann, Pro@amming and competition in the European communities, Economic Journal, March 1964, 1211 Memorandum of the Commission on the Action Programme of the Community for the Second Stage, Brusseb, 24 Oct. 1962. 1221 Parliament Europeen, Dibats Sessions 1962--63. [231 Perspectives de developpement &onomiquc dans le CEE jusqu’au 1970, Brussels, April 1966. (241 hogramme de politique economique i moyen terme (1966- 1970), Brussels, 1967. 1251 Rapport du sous-commiti politique iconomique i moyen terme sur le projet de programme de politique dconomiquc H moyen terme, 1965- 1970, Le comite economique et social CE S/212/66, Brussels, 17 Oct. 1966. 1261 Tableaux entrees-sorties pour les pays de la communaute Cconomique europ&nne, Office statistiques des communautes eurotn?ennes. Luxembourg, 1964.