Suchergebnisse

Contrary to the first two annual reports of OEEC which had concentrated on an analysis of national programs and common future policy both within the structure of the organization and beyond the end of the program, the third report of OEEC did not draw to any large extent upon individual national programs for the future, nor attempt to describe in detail future problems and action. The report presented an account of the achievements of the western European economy since the inception of the recovery program and of the progress made in stimulating economic cooperation. The problems of the immediate future were discussed in qualitative terms.

The "consultative group" of the Council of the Organization for European Economic Cooperation, composed of eight foreign or finance ministers, met in Paris on October 28, 1949. The group discussed a report made by permanent members of the Council which analyzed the reductions of quantitative import controls suggested provisionally by governments of OEEC. The report concluded that the proposed reductions were less important than they appeared, since many of them merely would ratify an existing situation. It found that the main obstacles to a substantial reduction of import barriers were the difficulties of international payments and the traditional desire for protective measures.

The European Central Inland Transport Organization, which had been created on September 27, 1945, as a temporary reconstruction organization, was dissolved following its ninth council session on September 29, 1947. In accordance with previous agreement its functions were assumed by a committee created by the Economic Commission for Europe.

In February 1950 the annual report of the Organization for European Economic Cooperation was presented to the United States Economic Cooperation Administration. The report stated that future progress of European recovery would depend to a large extent upon the level of economic activity in the United States, upon United States tariff policy; and upon international investments made by the United States. The forecasts of European trade were based on the assumption that United States business activity would remain at least as high as in the second and third quarter of 1949; it was pointed out that even small setbacks in the United States economy would have disproportionately large consequences for western Europe whose reserves were not great enough to stand much strain. The report insisted that what remained to be done to solve the dollar problem was not a task for Europe alone but was rather a "joint problem." Western Europe's dollar deficit could not be eliminated unless its exports to the United States amounted to 75 percent of its imports in value. It was necessary that the emphasis shift from the expansion of total production to the development of dollar earning and dollar saving types of production, as well as a reduction in costs. Inflationary pressure had been greatly relieved but nearly all the Marshall Plan countries were still suffering from some inflationary pressure which tended to reduce their exports and increase their imports. This pressure was likely to continue unless a world depression developed.

The Council of Ministers of the Organization for European Economic Cooperation (OEEC) convening in Paris under the chairmanship of Mr. Macmillan (Chancellor of the Exchequer, United Kingdom) received the report of a Ministerial Working Party of OEEC on November 15, 1956 which discussed the economic situation in member countries. The report noted the prosperity in western Europe, yet stressed the threats to it due to events in the middle east and interruption of traffic in the Suez. Besides a shortage of oil, the report noted a shortage of coal. It also stressed three weak points in the economy of western Europe: 1) the slowing down of the expansion of production; 2) the rise of prices; and 3) the imbalance in intra-European payments. It explained that the increase in production had fallen off due to a shortage of available labor; the rise in prices was due to excessive demand and increasing wages. The report called for serious fiscal measures, such as an increase in taxes, a reduction of subsidies to consumption and a cutting down of public expenditures. These measures could be supplemented by governmental action designed to increase competition in the home market and to enhance the free movement of workers in order to alleviate the man-power shortage.

Council The Council of the Organization for European Economic Cooperation (OEEC), meeting in Paris on June 29, 1956, decided to maintain the European Payments Union (EPU) for another year beginning on July 1, 1956, without any modifications in its rules. The Council also approved bilateral agreements on repayment and liquidation concluded by some EPU members. The Council met again in Paris from July 17 to 19, under the chairmanship of Mr. Harold Macmillan (United Kingdom); among the major questions discussed were nuclear energy and trade liberalization. Prior to the meeting, press reports indicated that the United Kingdom had refused an invitation from the west German government to discuss a flexible exchange rate for sterling, stating that the United Kingdom government saw no useful purpose to be served in an international discussion of the exchange value of sterling. During the Council session the ministers had before them a report and proposal dealing with 1) the need for the OEEC countries to achieve a degree of free trade abolishing quantitative restrictions to the extent of 90 percent or more; 2) the possibility of consolidating that degree of liberalization; and 3) the desire of the low tariff countries in Europe to see this quantitative liberalization accompanied by tariff reductions.

The Council of the Organization for European Economic Cooperation, meeting on August 29, 1951 issued a declaration at the close of the meeting stating that the broad objectives of the OEEC policies would be to expand total production in western Europe by 25 percent over the next five years. By this increase in production, an improvement in living standards and further social progress could be achieved while meeting defense requirements. "Conditions from country to country may vary, but an expansion of this size is well within the power of the European economy as a whole through the effective use of its resources… Europe possesses great national resources, a large industrial potential, a skilled and ample labor force, and a capacity to achieve rapid technical progress. The full mobilization of these resources requires foresight, resolution, a cooperative effort, and the pursuit of policies based on social justice. The governments are convinced that such policies are essential in order to preserve the gains already made and to realize continued progress. Social justice demands a distribution of burdens and benefits that will promote the well-being of the less favored sections of the community."

In July 1949, negotiations for a European payments agreement to finance international trade, which had been delayed by a dispute between the United Kingdom and the United States over currency convertibility, were blocked by a difference between the Swiss and the United States governments regarding the terms of Switzerland's participation. The Swiss government had refused to sign the bilateral agreement with the United States which all other members of the Organization for European Economic Cooperation receiving dollar aid had done, on the ground that it needed no dollar aid for itself and that the bilateral agreement would give the United States a right to check on the Swiss economy. The payments committee of the OEEC Council had attempted to bring Switzerland into the payments plan to widen the area of more liberal trade, urged by the United States. The committee's proposal that half of Switzerland's trade surplus be financed by a grant of dollars and half by trade credits on the terms of the Economic Cooperation Administration as advanced by Switzerland to her debtors was submitted to the Swiss Federal Council. Following the statement by the Economic Cooperation Administration that dollars could not be had without signature by Switzerland of a bilateral accord with the United States, the Swiss Federal Council refused to sign the accord.

Annual Report: The fourth annual report of the Organization for European Economic Cooperation, which was approved by the Council of Ministers on December 12, 1952, differed from previous reports in that in its preparation the United States and Canada played parts entirely similar to those of member countries and that the recommendations made applied equally to west Europe and North America. The current situation was regarded as unsatisfactory: production in west Europe was either not rising or rising very slightly; inflationary tendencies in some countries and deflationary pressures in others stood in the way of stable development; several OEEC members still suffered from balance of trade disequilibria and nearly all had dollar shortages; and progress toward trade liberalization had halted and even retrogressed in some major instances. These difficulties, the report pointed out, could not be attributed to unusual or temporary factors; such temporary factors as Korea and World War II dislocations were no longer of major significance in the economic situation while such elements as defense expenditures and interrupted east-west trade could be considered permanent.

The ninth annual report of the Organization for European Economic Cooperation (OEEC), entitled A Decade of Cooperation, Achievements and Perspectives?, was made public in April 1958. It included a summary of the origins of OEEC and reviewed the ten years of its history, considering such topics as the recovery and expansion of output, expanding exports and freeing trade, the creation of the European Payments Union and its activities, the fight against inflation, and cooperation in various fields of economic activity. It devoted a section to present and future tasks, noting that finding the means for maintaining adequate expansion along with financial stability was a major problem. The report stated that in recent months there had been signs, with one or two important exceptions, that the pressure on prices had slackened; raw material prices had fallen, and the price rise for manufacturing products had been checked. After reaching record levels, the pace of industrial expansion in western Europe had been considerably reduced as the investment boom tapered off; there had been no increase in total industrial production in member countries combined since spring 1957. A fall in many primary commodity prices, due largely to a continued upward trend in output of primary commodities in the face of a levelling off of world demand had reduced the purchasing power of third countries and eventually would tend to reduce their purchases from member countries. The present economic situation, therefore, had conflicting tendencies, making it difficult to establish firm lines of policy; demand pressures had eased, but the rise of the cost of living had not clearly been checked.

European Payments Union: On June 30 the Council of EPU decided that the organization should continue for an additional year in accordance with Article 11 of the agreement. Special arrangements had to be made with the Belgian-Luxembourg economic union and with Portugal to settle surpluses beyond their respective quotas up to June 30, 1952. The settlement with the Belgian-Luxembourg economic union consisted of a payment by the union of $80 million in gold as part repayment of the credit and, on the part of the Belgian-Luxembourg economic union, a supplementary tranche beyond her creditor quota of 85.2 u/a settled as 42.6 million in gold and 42.6 million in credit. After the various adjustments, the cumulative accounting surplus of the Belgian-Luxembourg economic union came to 415.8 million u/a of which 33.6 million were within the quota and 85.2 million were beyond the quota. In the case of Portugal, the union waived its rights to recover $3 million in gold and the Portuguese accounting surplus was reduced to 15 million u/a settled as to 6 million in gold and 9 million in credit.

Council: The Council of the Organization for European Economic Cooperation (OEEC) met on May 5 and 6, 1954, and agreed on the basis of a compromise settlement of the extreme creditor and debtor problem in the European Payments Union (EPU). The settlement provided that 1) accumulated debts should be paid over a period of time; 2) debtors should in the future limit to a minimum their resort to EPU resources; 3) the rules of payment should remain unaltered; 4) if the German Federal Republic or other creditors increased their surpluses in EPU, they should extend further credit, but receive some compensation from the EPU dollar reserve; and 5) the special position of Germany should be dealt with. According to press reports, the settlement had averted the danger that the United Kingdom and Germany would withdraw from EPU. The Council, which also decided that EPU should be renewed for another year after June 30, 1954, referred the matter of further details of the settlement to the managing board of EPU. Other actions taken by the Council during its May meeting included the following: 1) recommendations to France that it abolish the compensatory taxes on imports which it had introduced along with certain measures of trade liberalization, and increase trade liberalization to 75 percent by November 1, 1954, instead of to the 65 percent which it had promised; 2) recommendations to the steering board that it submit, as soon as possible, "concrete proposals" for the abolition of artificial measures designed to aid exporters; and 3) the establishment of a ministerial group to examine the problems which would arise if a "number of countries" re-established convertibility.

A report of the Organization for European Economic Cooperation (OEEC) on the relaxation of quantitative restrictions on imports of goods and restrictions on invisible transactions and transfers relating to the dollar area was made public during the period under review. The report was based on the replies of OEEC countries to a questionnaire approved by the OEEC Council, and on memoranda submitted by the two associate members, Canada and the United States. According to the report, substantial progress had been made since 1953 in the liberalization of imports from the dollar area and the relaxation of quantitative restrictions on imports of non-freed dollar commodities, with the extent and rapidity of the progress varying from one country to another. In general, the level of liberalization had been less for manufactured goods than for food and raw materials. In analyzing the effects of liberalization, the report stated that the very appreciable increase in dollar imports of raw materials and basic commodities had been not so much the result of liberalization itself as of the increased economic activity in member countries; and that on the whole, there had not been any sudden large-scale increase in imports from the dollar area of manufactured goods which had been freed by some countries. Since the imports of freed commodities from the United States and Canada had taken place against the background of a general increase in member countries' imports, there had not been generally any adverse change in the pattern of imports, particularly in regard to intra-European imports or those from other non-dollar countries. Nevertheless, the report stated, the increase in imports had contributed to the deterioration of the trade balance of member countries with the associated countries during the second half of 1954 and the first half of 1955, since exports to these countries did not rise above the 1953 level. However, because of increased American military expenditure in Europe, the current balance of member countries as a whole with the associated countries still showed a slight surplus.

The tenth annual economic review of the Organization for European Economic Cooperation (OEEC) appeared in February 1959 under the title Policies for Sound Economic Growth. Its major conclusions were as follows: 1) policy must generally be focused on the stimulation of an adequate rate of economic growth; 2) the measures adopted must not lead to a rate of growth of demand which might give rise to inflation and balance-of-payments disequilibrium, and which could not therefore be sustained; 3) in view of the large increase in productive capacity in recent years, there was scope for a greater emphasis on increasing consumption; 4) there was need for a stimulus to revive international trade, if possible through a more economic pattern of trade and use of investment resources; 5) member countries should act in concert and coordinate their national policies; 6) the countries in a stronger economic position had the major responsibility for ensuring a renewal of growth, although those still subject to inflationary pressures must continue to apply restraining measures; 7) special consideration must be given to the difficulties of those countries and regions in Europe which were in the course of development and relied heavily on agricultural exports; 8) there must be a stabilization policy appropriate to a phase of renewed expansion; 9) excessive over-all demand should be avoided, as well as cost inflation; and 10) improvements in short-term economic indicators needed to be promoted.