Organization for European Economic Cooperation

Extract

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.