Achieving the goals of the Employment act of 1946--thirtieth anniversary review


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Achieving the goals of the Employment act of 1946--thirtieth anniversary review
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Table of Contents
    Front Cover
        Page i
        Page ii
    Letter of transmittal
        Page iii
        Page iv
    Table of Contents
        Page v
        Page vi
    Economic planning in five western European countries: An overview
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    English translations of key laws and executive decisions establishing planning institutions in selected countries
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Full Text

24 Session


Volume 4-Economic Planning




Printed for the use of the Joint Eei'ff'_'dite6dttee

73-791 WASHINGTON : 1976

For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 Price $1.25

(Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.)
HUBERT H. HUMPHREY, Minnesota, Chairman
RICHARD BOLLING, Missouri, Vice Chairman

EDWARD M. KENNEDY, Massachusetts
WILLIAM V. ROTH, JR., Delaware

HENRY S. REUSS, Wisconsin
GILLIS W. LONG, Louisiana
OTIS G. PIKE, New York
MARGARET M. HECKLER, Massachusetts

WmLuM A. Cox


JOHN R. STARK, Executive Director
RICHARD F. KAUFMAN, General Counsel







DECEMisBER 23, 197G.
To the Members of the Joint Economic Committee:
Transmitted herewith is a study entitled "Economic Planning in
Five Western European Countries: An Overview," by Mr. A. W. R.
Hawthorne of the Massachusetts Institute of Technology, with a sup-
plementary compilation of English texts and comments on the key
laws and executive decisions in several of the countries Mr. Hawthorne
reviews, prepared by European Legal Specialists of the Library of
Congress. This paper is the first in a volume dealing with economic
planning, which is part of the Joint Economic Committee's 30th anni-
versary study series.
Mr. Hawthorne's monograph describes the structure and process of
economic planning in five Western European countries including
France, the Netherlands, Norway, West Germany, and the United
Kingdom. Each section, which is preceded by a short summary, is
an overview of the role of economic planning in the country, the estab-
lishment of goals and priorities, the institutions responsible for plan-
ning, the economic techniques available to instrument the goals, and
the administrative and political process by which these factors are
coordinated and implemented. The study and accompanying texts
provide valuable perspectives on how economic planning might be
developed in the United States, and promise to be a useful resource
for future investigations.
The research, sponsored by the German Marshall Fund, will prove
of great value to Members of Congress and others who are interested
in designing practical and successful approaches to improved economic
policy in the United States. I wish to thank Mr. Hawthorne and the
German Marshall Fund. In addition, the Committee appreciates the
efforts of the following Library of Congress specialists who translated,
compiled, and in the case of Norway, analyzed, the important planning
laws in four of the countries Mr. Hawthorne studied: Dr. Edmund C.
Jann., Dr. William S6lvom-Fekete, Richard Greenfield, Joyc Darilek,
and Dr. Finn Henriksen.
The views expressed in. the stud, and other commentary are those
of the authors and do not necessarily represent the views of the Mem-
bers of the Joint Economic Committee or the Committee staff.
Chairn7a, Joint Economic Committee.

DECEMBER 20, 1976.
Chairman, Joint Economic Committee,
U.S. Congress, Waghington, D.C.
DEAR MR. CHAMMAN: Transmitted herewith is a study entitled
"Economic Planning in Five Western European Countries: An Over-
view," by Mr. A. W. R. Hawthorne of the Massachusetts Institute of
Technology. This study, and the accompanying compilation of English
translations of key laws and executive decisions in several of the coun-
tries Mr. Hawthorne reviews, are the first in a volume dealing with
economic planning, which is part of the Joint Economic Committee's
30th anniversary study series.
Mr. Hawthorne's monograph describes the structure and process of
economic planning in five Western European countries including
France, the Netherlands, Norway, West Germany, and the United
Kingdom. Each section, which is preceded by a short summary, is an
overview of the role of economictplanning in the country, the estab-
lishment of goals and priorities, the institutions responsible for plan-
ning, the economic techniques available to instrument the goals, and
the administrative and political process by which these factors are
coordinated and implemented. In offering both detailed and broad
comparisons and contrasts of the historical experience of different
planning systems in various free enterprise countries, Mr. Haw-
thorne's examination provides instructive perspectives on how eco-
nomic planning might be developed in the United States. To supple-
ment this, texts and descriptions of the most important laws and execu-
tive decisions pertaining to economic planning in the non-English
countries Mr. Hawthorne studied, have been appended, providing
in this volume a valuable reference for future researchers.
Mr. Hawthorne's research was sponsored by the German Marshall
Fund. The translations were prepared by legal specialists in
the European Law Division of the Library of Congress under the
supervision of Dr. Edmund C. Jarn, Acting Law Librarian. The
library personnel include Dr. William S61yom-Fekete, Richard
Greenfield,.Joyce Darilek, and Dr. Finn Henriksen, all of whom in-
vested admirable effort to turn out a prodigious amount of work under
time constraints set by the Committee.
The views expressed in the study are those of the authors and do
not necessarily represent the views of the Members of the Joint Eco-
nomic Committee or the Committee staff.
Executive Director, Joint Economic Committee.


Letters of transmittal --III
By A. W. R. Hawthorne
Introduction -... .. ... ..-
The Netherlands 1--------------------13
Norway 1---------------------------. -18
Federal Republic of Germany1----------------....-................... 23
United Kingdomllllllllllllllll .......... -29
I. Areas for further research---------------------------------------35
II. Selected bibliography------------------.------------------------- 36
Prepared by the European Law Division, Library of Congress, Under the
Supervision of Dr. Edmund C. Jann, Acting Law Librarian
Federal Republic of Germany--------------------------------------45
France------- 70
The Netherlands------------------------------------------------81
A summary section precedes the report on each country.

Digitized by the Internet Archive
in 2013

By A. W. R. Hawthorne*

Economic planning, in the sense that it has developed in Western
Europe, most notably in France, describes an activity of the State the
purpose of which is to define the goals of economic policy, to set out the
processes by which these goals may be achieved and to coordinate the
contributions of various economic agents towards their realization
within the overall framework of a market economy. It is clearly dif-
ferentiated both from the concept of planning as strict central control,
as practiced in the Soviet Union, or from laissez-faire capitalism.
Economic planning requires the identification and selection of goals, a
political process; the use of measures of State intervention to achieve
them; and a system of coordination and control to ensure that the vari-
ous measures are employed in a coherent and effective way. A planning
system cannot be said to exist without these four factors; thus, a high
degree of State ownership in an economy is not necessarily synonymous
with the existence of planning.
An attempt to influence the direction of the economy through State
intervention presupposes an understanding of its workings. It further-
more requires that planners have available the data which will permit
them to analyze a situation, determine practicable goals and evaluate to
what extent they are attained.
Measures of intervention can be of many kinds; their nature depends
on the goals set, and the workings of the economy as perceived by the
planners, subject to political constraints. It is generally held that the
degree of intervention should be the least necessary to attain the desired
goals. Thus, macro-economic measures are preferred to those affecting
a particular sector which are in turn preferred to measures aimed at an
individual firm.
The need for coordination has led to the creation, in three of the
countries studied, France, the Netherlands, and Norway, of specialized
Government economic planning agencies. Their purpose is to assure
that the various Ministries, the actions of which affect the economy,
operate within a common framework and that the policies adopted by
each for the execution of its own functions do not run counter to over-
all goals. In Britain, the creation of "super-ministries" responsible for
an entire functional area was designed to improve coordination, and
the system of financial planning introduced in West Germany repre-
*Graduate student, Sloan School of Management, Massachusetts Institute of Technology.

sents another such measure. Planning agencies are not designed to
duplicate the work of Ministries, and are kept small for this reason.
Postwar planning was influenced by two factors; shortages due to
wartime destruction and the wish to avoid 'a repetition of the crisis
which had followed the First World War, or the stagnation of the
1930's. A later task was to use American Marshall Plan aid as ef-
ciently as possible. Postwar plans typically constituted a statement of
physical goals to be achieved within a given time-period and a pro-
gramming of resource use to achieve these ends. Emphasis was placed
on identifying possible bottlenecks or constraints.
To an extent varying from country to country, plans now indicate
the general directions which policy will take rather than listing specific
sectoral policies to be realized. The introduction of increasing flexi-
bility has caused considerable debate as to the real usefulness of plan-
ning. One school of thought holds that a plan, by providing forecasts
of developments over a number of years coordinates the decisions of
public and private bodies and creates a positive climate for private
investment. Opponents claim that this vision of security is an illusion
and that planning only results in more or less overt piecemeal inter-
ference by official bodies in the industrial system. It seems however to
be increasingly agreed that planning should be a process of communica-
tion between government agenciesbusiness and labor on the problems
of society and the economy, of feasible alternatives and their probable
consequences; an opportunity for political and economic groups to
make their interests known and to study and compare the likely out-
comes of politically selected options. This view of planning emerges-
most clearly in countries where political parties have well-defined and
differentiated programs.
Despite an increasing interst in questions of quality of life, plan-
ning in most of the countries studied is principally concerned with the
classical variables of economic policy, such as employment, balance-of-
payments, growth, land inflation. Attempts are being made to integrate
longer-term considerations, particularly in the Netherlands and Nor-
way. Aspects such as the environment or energy considerations tend to
be used as constraints on policy measures principally concerned with
industrial development.
The relationship between planning and the budgetary process is
somewhat awkward in most of the countries studied with the exception
of the Netherlands where the one-year plan is simply an aspect of the
annual budgeting procedure. The budget constitutes the only binding
engagement on the Government and is made in view of shorter-term
considerations than a plan. Even from the technical point of view it is
difficult to tell how a change in outlays or policy in a given year will
affect the realization of goals several years afterward. This problem
is particularly acute in France since the Plan and the annual budget
are the responsibility of different agencies.
Furthermore, the annual budget is the only instrument through
which the legislature can affect the execution of a plan. Plans are, in all
countries where they exist, presented to Parliament for ratification or
approval. Their preparation and execution is the prerogative of the
Executive, and the legislatures do not have the technical facilities
required to criticise them in detail. In the Netherlands and Norway,
however, it is possible for the legislature to request the technical agen-

eies concerned with planning to simulate the effects of particular poli-
cies. In the present debate on planning in Germany great concern is
,shown with the relationship between the legislature and planners.
Simulation of the effects of policy measures represents one of the
,more significant contributions of quantitative economics to planning.
All the countries studied have developed data bases and a modeling
capacity within the Government in line with their planning needs.
National accounting techniques were of great value to France, the
Netherlands, and Norway, in developing planning systems after the
war. They furnished planners with a constraint and a test of coherence
when piecing together the projects proposed by Ministries, and made
,effective demand management possible. Econometric models are used
for data processing and coherence testing as well as for forecasting or
simulation purposes, particularly in Norway, and have rendered policy
debates far more significant in that country and in the Netherlands.
The creation of a statistical service to provide the data necessary for
the management of the national economy has received much attention;
the importance of close working relations between statistical offices and
planners was stressed in several of the countries studied.
Part of the information-gathering process is assured, particularly in
France, through consultation with representatives of industry and the
trades union in special industrial commissions. This structure is echoed
in the British National Economic Development Council.
The purpose of such commissions is to ensure that the analysis of a
given sector and recommendations for action were based on expert
opinion. These consultations also have substantial political signifi-
cance; it is felt that if the different interest groups, or "social partners"
participate in making a plan they are more likely to cooperate in its
execution. This function is most significant in France where the need
fo consensus-building seems to be strongly felt. The Dutch Social-
Economic Council and the German Concerted Action groups also rep-
resent forums where the social partners can exert an influence on eco-
Inic policy.
It is increasingly recognized that long-term "futurology" studies
permit a valuable perspective on medium-term plans since they may
show that current goals have undesirable long-term effects or do not
meet future needs. The Dutch Scientific Council for Government Policy
conducts long-term studies and can publish the results. Norwegian
planners have made 30-year projections which have pointed up some
significant barriers to growth. In Germany and France special com-
missions exist but their role is much less central.
As far as instruments of planning are concerned, all the countries
use tax incentives, subsidies and fiscal/monetary measures to steer the
"economy. France, West Germany, and Norway have systems of state
finance agencies which offer loans for particular sectors under advanta-
geous conditions. Intervention at the company level only takes place
informally, or via licensing systems for new construction based on
regional or environmental criteria. However, France has introduced,
and the United Kingdom envisages the introduction of, "agreements"
between individual firms and the State, whereby the company is
assured of a certain level of support for a period of time if it under-
takes a program of investment or development.

The problems of restructuring industry to face the changes in exter-
nal circumstances is receiving increasing attention. Apart from the
specific "agreements" mentioned above, the creation of State holding
companies to reinvigorate backward sectors is being suggested in the
United Kingdom and the Netherlands.
The lowering of trade barriers within the Common Market has
created a degree of interrelation among the member countries which
obliges national economic policy-makers to pay increasing attention to
events outside their own frontiers. Medium-term forecasting and plan-
ning at the European Community level began with the creation in 1964
of a Medium-Term Economic Policy committee in Brussels, to promote
coordination of economic policies among member countries. This con-
mittee has produced three five-year programs comprising "conditional"
economic forecasts, providing a scenario of balanced growth for the
member States, and qualitative guidelines indicating structural policies
and identifying priority areas for development policies. The movement
towards economy and monetary union has strengthened this planning
activity; in particular member States have been requested'(1974) to
create similar instruments of cyclical policy. Community members are
required to make ongoing mid-term forecasts. So far, the major value
has been to improve communication and understanding between mem-
ber States on economic policy matters and in particular to resist uni-
lateral moves following the crisis of 1973. Supranational planning is
still very limited but seems likely to grow in importance particularly
given the increasing stress being laid on problems caused by economic
inequalities within the Community and thus on regional development
Regional economic planning within the countries studied is an ex-
tremely important and topical issue. The aim of such planning is to
ensure equality of economic opportunity throughout the national ter-
ritory. The importance of such planning is both economic and political;
it aims to reduce problems caused by uneven economic development
and the associated difficulties such as those caused by substantial popu-
lation shifts. It also attempts to maintain social stability and regional
character. Because of its complexity, regional planning is not treated
in detail in this paper.
Integrated economic planning is an extremely complex matter, in-
volving politics, questions of administrative structures, an excellent
understanding of the workings of the economy and indeed of the engi-
neering aspects of industry, and techniques of econometric analysis and
forecasting, the whole relating to a given national framework.
The planning function is, in fact, an extension of the normal admin-
istrative activity of government, and practices and institutions there-
fore reflect national administrative and political circumstances. It is
beyond the scope of this paper to attempt to evaluate the experiences
of the various countries considered.
However, some elements of the planning system in each country
seem worthy of particular attention. The Modernization Commissions
in France are an interesting and largely successful attempt to achieve
at once an optimal information input and political consensus. The
"matrix" general planning structure in the Netherlands is a remark-
able attempt to achieve integrated planning at all levels. Both the


Netherlands and Norway have developed econometrics to a high level
for planning purposes. fn the Federal Republic of Germany the prob-
lems of planLnig in a Federal framework, and the role of the legisla-
ture in planning are being seriously examined. The Stability and
Growth Law of 1967 1is also of interest.
Finally, it is in the United Kingdom and West Germany that re-
gional planning is most developed; furthermore, in England the in-
struments of planning policy are being subjected to a most searching
See "English Translations of Key Laws and Executive Decisions" (henceforth, "English
Translations") In this volume, p. 48.


The Plan Commission, created in 1946, was directed to promote
reconstruction and also, in the longer term, to encourage the general
modernization and development of French industry. The planning
process required a sound information base. It was also conceived as
a consensus-building operation. An important innovation for these
purposes was the system of Modernization Commissions, ad-hoc
groups of experts on a given sector from industry, government and
the trades unions, convoked during the preparation phase of a plan
to draw up policies concerning that sector. The Plan Commission, a
small organization, depends on these commissions, the ministries and
a number of semi-public research bodies for the large volume of tech-
nical analysis necessary for the Plans.
French Plans, from the First (1947-1957) to the Seventh (1970-
1975) have evolved from highly specific sets of output goals for key
industries to much more general outlines of economic and social policy
emphasizing the elimination of bottlenecks and the encouragement of
new technologies. They have been accompanied by the development
of increasingly sophisticated methods of economic analysis. Prepara-
tion of a Plan is regarded as a major task and requires two years of
The legislature does not participate directly in the planning process.
It votes on the general goals of a plan before its detailed preparation
is undertaken, and can suggest modifications when the final version.
is presented for ratification.
Plans are indicative in nature, and private industry is encouraged
to follow their goals by tax advantages, subsidies and loans under
advantageous conditions. The investment policies of the nationalized
industries are also subject to overall guidance.
The principal difficulty encountered has been the lack of coordina-
tion between the aim of the Plan and the budget process where the
demands of short-term economic policies have often clashed with
medium-term goals. A Central Planning Council under the leadership
of the President has recently been created to alleviate this problem.

The origins of French planning were influenced by the slow develop-
ment of the French economy from 1870 to 1940 and the resulting back-
wardness, which was held to be one of the causes of the collapse of 1940.
During the war, the economy was subject to direct physical controls, so
that Government officials gained familiarity with the principal indus-
trial sectors and their problems. Furthermore, an efficient system of
statistics, designed to identify raw material needs by sector, was set up.

When reconstruction measures were considered, more than a simple
return to the prewar situation was envisaged; the aim was rather to
introduce structural reforms and to organize the Government's inter-
ventions in such a way as to constitute an ongoing pressure for innova-
tion and modernization, as well as to undertake the more short-term
tasks of reconstructing the economy and making the best use of Amer-
ican aid.
The Government's instrument to achieve this end was the Plan Com-
mission, created by a decree of January 3, 1946. This decree set up a
planning council and a commissioner reporting to the President (sub-
sequently to the Prime Minister and, from 1954 to 1962, to the Ministry
of Finance). The aims of the first plan were to modernize and expand
the economic apparatus, to achieve the objectives ofgrowth, produc-
tivity, full employment and to raise the standard of living. The decree
further authorized the Commission to carry out enquiries in industry
and the trades unions and to create Modernization Commissions con-
sisting of representatives of government, industry, professional asso-
ciations, the unions and independent experts. The line ministries were
required to furnish the Commission with the support it needed includ-
ing in particular access to information.
The Plan Commission's principal role is thus one of coordination
and consultation. It has been described as an agency designed to com-
pensate for certain weaknesses of French society and administration,
notably to ensure more cohesion among the policies of different minis-
tries and to attempt to create a consensus on economic objectives and
measures among the social partners (industry, unions, Government
etc.) which the political parties and the political system had failed to
The staff of the Plan Commission is small, no more than 100 persons.
It has been traditionally drawn from a wider background than most
Government departments, including, in particular, a number of spe-
cialists recruited on a temporary basis from industry and universities.
It is divided into seven services, four of which, the "horizontal" serv-
ices, are concerned with aspects of planning which cover the entire
economy: finance, social affairs, regional and urban affairs, and eco-
nomics. The last of these is responsible for coordinating all the prepar-
atory work for the plan. Three "vertical" services, industry, agricul-
ture and tertiary activities (responsible for energy, transport and
telecommunications) cover three specific areas of the economy. In addi-
tion, three divisions with special responsibilities, quantitative analysis
and studies, long-term studies, and socio-economic studies and research,
coordinate activities in these areas. The internal structure is flexible
and can be modified as the requirements of the planning process change.
The Commission has three specific functions: responsibility for the
preparation of each plan, seeing that plans are carried out, 'and advis-
ing the Government andin particular the Prime Minister on matters of
policy related to the Plan's objectives.
The determination of needs and priorities within each sector is done
by the Modernization Commissions. They are representative, non-per-
manent bodies made up of employees, workers, Government officials
and experts as well as consumers' organizations. "Vertical Commis-
sions" are concerned with a particular sector; "Horizontal Commis-

1sions" with general problems common to a number of sectors (economic
and financial, manpower, productivity, etc.). The number of persons
involved in these Commissions is between 3,000 and 4,000; the Sixth
Plan involved 26 Commissions and the Seventh will mobilize 15. Each
'Commission is set up by a decree of the Prime Minister, in which the
members are indicated by name.
The Plan Commission depends on other organizations for the tech-
nical and analytical work required for producing a plan. These inputs
are furnished both by departments within the line ministries and by
"para-public" organizations-non-profit bodies managed jointly by
representatives of ministries concerned with economic affairs andpri-
vate industry-created to fulfill particular functions.
The principal analytical service is provided bythe National Insti-
tute for Statistics and Economic Studies (INSEE), a division of the
Ministry of Finance. Apart from its responsibility for gathering statis-
tics, either directly or through the intermediary of the line ministry
responsible (AgTiculture, Scientific and Industrial Development, etc.).
it also is responsible for the data base and forecasting tools used for
the Plan.
Another division of the Ministry of Finance, the Forecasting Direc-
-torate, while mainly responsible for short-term forecasts used for the
,one-year and two-year economic budgets, also furnishes data and fore-
,casts of Government spending, balance of payments and financial op-
erations to the INSEE for the Plan's forecasts.
The Delegation for Town and Country Planning and Regional Pro-
grams (DATAR) is responsible for overseeing the administration of
regional development programs as defined by the Plan Commission, on
an interministerial basis; it has a significant influence on the prepara-
tion of regional policies.
Three para-public bodies also provide an input to the planning
process. These are the CREDOC, the BIPE and the CEPREMAP.
All work partly for the Government and partly for private industry.
The Center for Research and Documentation on Consumption
(CREDOC) is responsible for gathering data and making forecasts
on consumer demand. It has been concerned with health and medical
economics recently and has been developing new accounting systems
for these fields.
The Office of Economic Information and Forecasting (BIPE) is
concerned with the analysis of industrial statistics and the improve-
ment of forecasting methods, undertaken in participation with
The Center for Forecasting and Economic and Mathematical Re-
search Applied to Planning (CEPREMAP) undertakes econometric
research and develops forecasting methods for the Plan.
The plans cover a four-to-five year period, longer than most business
cycles, and corresponding to the lead-time for much investment in
heavy industry. French planners believe that a five-year period has
proved to be the most suitable for their purposes.
The objectives of the Plans, from the First (1947-1952) to the
Seventh (1975-1980), have become increasingly complex. They have
always concentrated on industry and stressed growth. The First Plan,
coming immediately after the war, was highly directive and selective

and concentrated on fostering investment in a number of key sectors
of heavy industry, for which "imperative targets" were set. The Sec-
ond (1954-1957) and Third (1958-1961) Plans represent the "classic"
phase of "indicative planning" in a closed economy, based on global
economic forecasts and targets rendered coherent through use of the
national accounts, the development of which in France was strongly
influenced and fostered by the needs of the Plan. This phase ushered
in the concept of "harmonized growth," the Government concentrating
on attacking problems common to a number of sectors such as pro-
ductivity or training bya policy of selective financial incentives with
the aim of alleviating structural bottlenecks and rigidities. Further-
more it set out certain "imperative tasks" of a general nature, such
as equilibrating the balance of payments.
The Third Plan was the first in which overall analytical coherence
was achieved through the use of an input-output matrix. It also saw
the introduction of systematic investment policies designed to render
export industries more competitive.
The Fourth Plan (1962-1965), while placing much emphasis in pre-
paring French industry to meet the challenge of the Common Market,
also stressed the importance of social reforms, as indicated by its title
"Plan for Economic and Social Development." The problem of aiding
backward regions and raising the living standard of the least-favored
groups of the population took high priority.
The Fifth Plan (196--1970) introduced a greater flexibility. Certain
objectives remained normative, while others, less subject to Govern-
mental control became "perspectives." It was recognized, after the
experiences of the Third and Fourth Plans, that added flexibility to
allow for short-term stabilization policy was essential. The disappear-
ance of trade barriers resulting from the Common Market made control
of inflation important, since a rise in French relative prices would
inevitably lead to a balance-of-payments disequilibrium. Objectives
were expressed in value as well as volume terms, and a permissible
range was set on certain economic variables-the "flashing lights"-
departure from which would indicate that the Plan's objectives were
menaced. Much emphasis was also put on improving the competitive-
ness of French industry by encouraging an increasein firm size through
mergers, and direct support for training and research.
The Sixth Plan (1970-1975) stressed rapid industrial growth and
modernization of equipment in the light of demand changes. Certain
"strategic sectors" (chemistry, electronics, etc.) were identified as well
as "horizontal" factors-infrastructure, research and education-sup-
port of which would improve industrial efficiency.
The Seventh Plan (1975-1980) goes much further than its predeces-
sors toward "strategic" aims. The strategic concept is best summed up
as the pursuit of objectives which optimize the performance of the
economy whatever the external circumstances. Full employment, im-
plying a rapid rate of growth, is the major priority;the Government
is prepared to take extensive measures to reconcile this aim with price
and balance-of-payments stability. A resulting preoccupation is to deal
with those weaknesses and irregularities in the national economic struc-
ture which make France so susceptible to inflation. It appears that
short-term management of the economy, especially in view of interna-

tional uncertainties, will be ,given greater importance than the achieve-
ment of particular output objectives by sector.
The process of preparation of a Plan is lengthy and complex.
First, a series of plausible senariog for the 5-year Plan period are
prepared by the technical agencies mentioned, within the framework of
a general "perspective" study covering a 10-15 year horizon. These
scenarios must be realizable in terms of the productive capacity of the
economy, and respect the Government's own priorities and constraints.
for economic development. These have been submitted, since the Fourth
Plan, to the Economic and Social Council, a body grouping union
leaders, employees' representatives, consumers' representatives and ex-
perts, which recommends priorities. The Plan Commission then, from
the Fifth Plan on, has drafted a "report on the options available for
the Plan" which is debated by Parliament.
The Government then transmits its directives to the Plan Commis-
sion, and the Modernization Commissions begin their work. The Com-
missions act as collectors of the demands and wishes of interest groups
in their domain of responsibility. They also obtain information on tech-
nical, social and economic problems of their sector, and on possible im-
provements and their consequences. Proposed reforms are discussedT
and evaluated. Their reports contain a critical description of the pres-
ent state of the sector, a forecast for its development over the period of
the Plan, and a list of measures to be taken to encourage this develop-
The purpose of this process is not merely to assure the Commission
of an optimal information input but also to ensure that the various
social partners, as a result of this participation, are committed to realiz-
ing the Plan, although it should be stressed that. Commission members
are not considered to speak for the organizations to which they belong.
On the whole, the work of the Modernization Commissions is probably
the aspect of French planning most widely recognized as useful; the
Commissions provide a forum where members of different social groups
can exchange views and bring their positions to the attention of those
responsible for medium-term economic policy.
The Plan Commission is responsible for assuring the coherence of
the forecasts and the feasibilityof the objectives set out by the Mod-
ernization Commissions. Since ihe Fifth Plan, the Modernization Com-
missions have been working with econometric models, 'although the
technical flexibility and comprehensibility of these models has been
widely criticized.
The reports of these Commissions, which require 6 to 12 months for
their preparation, are integrated by the staff of the Plan Commission
into a plan which is then transmitted to -the Economic and Social'
Council, sitting with the High Council of the Plan, the supervisory
committee which make their own report on the Plan. The whole, to-
gether with summaries of the reports of the Modernization Commis-
sions, is transmitted to Parliament. The Finance Commission has the
duty of making a synthesis of amendments suggested by members. It
then transmits those amendments retained to Parliament, which votes
on them. Those amendments are generally accepted by the Govern-
ment, in the form of a letter from the Prime Minister to the President
of the National Assembly.

Parliamentary control over planning is rendered difficult by the fact
that a Plan is a coherent whole so that modification of one part of it
implies changing the entire equilibrium. Parliamentary criticism of
Plans has therefore tended to be either very general, referring for
instance to the entire social complexion of a plan, or very specific,
indeed parochial in nature, referring to a specific project or expendi-
ture. Parliament has no role in the detailed process of planning as a
consequence of the doctrine of separation of powers. As a result of
criticism made at the inception of the Fourth Plan, an annual Report
on the Execution of the Plan is presented to Parliament, but this docu-
ment, rather general in nature, is claimed not to get the attention which
it merits; in particular, the critical confrontation between the annual
budget and this report in the light of the overall objectives of the Plan
is not carried out, in part because Parliament is lacking in the tech-
nical expertise and analytical resources necessary. This failure both
weakens the Plan, and undermines Parliament's control over its
A Plan consists of three aspects: The aims to be achieved, the means
to implement it, and the forecasts themselves, which are indicative in
nature. It is perhaps the means which are most widely contested. The
means available are both direct and indirect. Among direct controls
are building permits and controls related to environmental and urban
development regulations, as well as the price, salary and investment
policies of state agencies and 'nationalized industries. The State can
also employ crisis measures such as price controls, foreign exchange
controls or credit Testrictions. The Budget also offers a means of con-
trol given the importance of central government subsidies, both to
local authorities (half of whose budget is derived from subsidies) and
to agriculture, nationalized industries or, in the form of social security,
to less-favored sections of the population.
A further instrument is the Fund for Economic and Social Devel-
opment (FDES), a special Treasury account set up in 1955 to distrib-
ute extrabudgetary loans, below market rates, to further the aims of
the Plan. About two-thirds of these funds are distributed as direct
loans to state organisms (port authorities, development bodies, nation-
alized industries, etc.) and one-third, including all those granted to
private firms, through banks. Sums loaned in 1975 were 2.8 billion
francs, and the 1976 budget envisages 3.6 billion.
Very little direct pressure is brought to bear on private firms and
individuals. The "indirect instruments"applied include loans which
a number of specialized state credit institutions offer, either, as indi-
cated, with FDES support or using their own funds. Investment sub-
sidies are given to companies setting up in certain regions or for
research and training activities, and tax advantages for regional
development, research, and export promotion.
French planning was developed in response to national economic
backwardness and the necessities of post-war reconstruction. It is
based on the premise that a logical and concrete analysis of the process
of growth and development will permit identification of a hierarchy
of priorities for investment, and of possible bottlenecks. The use of
the national accounts to assure overall coherence both for analysis and
for forecasting, and the work of the Modernization Commissions which

examine the situation of each industry and each horizontal aspect in
detail, are supposed to ensure that planning is integrated.
Criticisms of the Plan mention the relative tardiness with which
it took note of social and 'regional problems, and of infrastructure
difficulties-in particular chronic underinvestment in telephones-but
most important, difficulties ii1 coordinating the annualbudget and the
Plan. The difficulties are, in part, technical; so far, for instance, de-
spite nnch work, there is no dynamic econometric model available
which would permit simulation of the detailed effects of a change in
expenditures in one year on the progress of the Plan. Also, the short-
term forecasts carried out by the Forecasting Directorate of the Min-
istry of Finance as part of the annual budgetary process are not com-
patible with the medium-term forecasts used for the Plan. Current
economic uncertainties and the demands of the open economy within
the European Community have put a premium on short-term cyclical
measures, an area where the Ministry of Finance seeks to retain as
much liberty of action as possible. Measures taken for this purpose do
not by any means always take adequate account of the consequences to
the Plan.
Surveys of business opinion indicate that companies do not make
their decisions according to the goals of the Plan. On the other hand,
the overall forecasts and projected developments in particular sectors
are used as guidelines in developing company strategy. Investors also
regard the plan as an indication as to the probable growth and profita-
bility of various sectors; indeed it has often been described as a
"market study" of the economy. .
In order to improve coordination and assure a greater congruence
of goals between the executive and the Plan, a Central Planning Coun-
cil has been created, under the leadership of the President of the Re-
public, comprising the Prime Minister, the Ministers of Finance and
Labor and the Commissaire au Plan, which meets monthly. The Min-
istries are also being given a more active initiating role in the planning
process. It is hoped that the Modernization Commissions, relieved of
much detailed work, will be able to concentrate more on discussion
of the major issues and problems.
The Plan is probably evolving from a specific program for five years
towards an activity more concerned with the establishment of goals
and of priorities for the actions taken to achieve them. These priorities
do not constitute engagements, and in this sense, may weaken the un-
certainty-reducing role which the Plan has played in the past. A par-
tial solution to this problem, adopted for the Seventh Plan, is to iden-
tify certain programs, constituting some 15-20 percent of government
expenditures, which the Government engages itself to complete during
the period of the Plan. There is however a danger that by retreating
from the principle of comprehensive engagements, the Government
may have weakened the Plan's political significance as a forum for
the various social groups.


Dutch economic planning is a part of the overall planning system
which is elaborate and sophisticated. The Central Planning Bureau,
responsible for economic planning, depends on the Ministry of Eco-
nomic Affairs but has interministerial responsibilities. The Physical
Planning Bureau, depending on the Ministry of Housing, is similarly
responsible for town and country planning, and a recently-created
Social and Cultural Planning Bureau undertakes planning in areas
such as welfare, justice and education. The Scientific Council for Gov-
ernment Policy, reporting to the cabinet, oversees these three agencies
and has a general mandate to carry out "future" studies and point out
areas of weakness in policymaking.
The Central Planning Bureau specializes in econometric modelling,
forecasting and analysis. It is a technical body, and does not make
economic policy. The Annual Plan is a conditional forecast presented,
in provisional form, with the Government's budget proposals and, in
final form after the budget has been accepted by Parliament. It com-
prises projections based on different assumptions about domestic and
international developments.
The Five-Year plans were discontinued in 1952 but recommenced
in 1965. They are purely projective in nature, analyzing probable
developments in 23 sectors of the economy and indicating potential
obstacles to growth.
Both the annual and five-year plans form the basis for discussions
of economic and social policy in numerous coordinating committees,
notably the Social-Economic Council where employers, government
and unions are represented. These committees, as well as Parliament
can request the Central Planning Bureau to project the effects of par-
ticular policies.
Growing structural unemployment and the impact of environmental
and raw-materials constraints have led the government to adopt a
policy of "selective growth" in which the future development and
contribution of each economic sector will be examined in detail. It is
anticipated that these constraints, and international competition will
lead to the decline of certain sectors, and measures are envisaged to aid
companies with rationalization and help in labor redeployment.

Economic planning in the Netherlands is but one facet integrated
into the overall planning activity which is one of the most elaborately
structured and comprehensive in Western Europe. The struggle
against water has over many centuries made the Dutch extremely con-
scious of the necessity for elaborate planning and concertation for
physical and regional development. The Netherlands has,-on the other


hand, an exceptionally open economy, where exports represent over
50 percent of gross nationalproduct, which imposesunusual demands
for flexibility and competition. There is also a very strong, long-stand-
ing attachment to private enterprise. As a result, the economic plan-
ning aspect is a comparatively recent development; the principal
agency responsible, the Central Planning Bureau (CPB), was founded
in September 1945. Its legal mandate and the structure of the Plan
were given by an act of April 21, 1947.1 The CPB is attached to the
Ministr of Economic Affairs, but is vested with interdepartmental
responsibility. Its function is "to carry out all activities relating to the
preparation of a Central Economic Plan, which at regular times shall
be laid down by the Government." It is thus an executive rather than
a policy-making body.
The Central Economic Plan itself is defined as a "well-balanced_
system of estimates and directives," assembling information on pros-
pective levels and development of the national income, prices, the
sources of the national income and "all further data which are of im-
portance for proper coordination of economic, social and financial
policy." The plans are submitted to the Council of Economic Affairs.
(REA), formed of Cabinet ministers responsible for various aspects,
of the economy, the president of the Central Bank and the director
of the CPB. Consultations are held with the Central Economic Com-
mission (CEC), an advisory interdepartmental group of senior civil
servants, and to the Central Planning Commission (CPC), consisting
of 30 members drawn from ministries, trade associations, and unions
and independent experts. A more general advisory role is exercised by
the Social Economic Council (SER) established in 1950, with 45 mem-
bers, 15 each from trade associations, unions and Government. It must
be consulted on all social and economic matters. The composition of
these two bodies is designed to facilitate a political consensus on the
conclusions of the plan.
Communication between industry and the CPB is further facilitated
through eight industry committees, seven organized by the Ministry of
Economic Affairs, and one (Construction) by the Housing Ministry,
for the Medium-Term Plan.
The larger planning framework into which the CPB's economic
planning activities fit was established in 1973 as a result of the recom-
mendations of the de Wolff committee, set up in 1966 by the Ministry
of Education and Science to analyze Dutch planning. The resulting-
structure is of a "matrix" nature, recognizing two types of planning,
sector planning and aspect, or "facet" planning. Sector planning is,
carried out by the line Ministries themselves as part ofttheir normal
function (roads, railroads and canals by the Ministry of Transport,
hospitals by the Ministry of Health, etc.). Aspect planning, on issues
extending beyond the bounds of competence of a single ministry, is
undertaken by the Physical Planning Bureau (RPD), responsible for
setting guidelines for town and country planning, the Social and
Cultural Planning Bureau set up in 1973, responsible for coordination
and planning in welfare (justice, education, social security, etc.) and,
in a service role, the Central Bureau of Statistics responsible for all
statistical data, as well as by the CPB. This structure is complenente
ISee "English Translations," p. 81.

by the Scientific Council for Government Policy, also created in 1973,
a consultative body reporting to the Cabinet with a very broad an-
date to carry out future-oriented studied, examine the policies of the
Government, drawing attention to particular weaknesses, and to an-
alyze the organizational effectiveness of government, particularly in
regard toplanning..This body has the statutory right to make public
its own work at its discretion.
The CPB has about 140 staff, 70 of whom have research qualifica-
tions. Its principal task is the preparation of the one-year plan, and
since 1963, of five-year prospective plans as well. Also, since it repre-
sents the largest concentration of econometric talent within the
Government, it carries out work for other agencies on all matters con-
cerned with the economy, notably for the RPD on regional develop-
ment. Furthermore it carries out specific studies, such as a recent cost-
benefit analysis of the proposed second national airport, and publishes
"occasional papers" on subjects of academic interest, connected with
planning and forecasting.
Until 1963, the CPB concentrated its activities on the annual plan,
-which constitutes an aid and a guideline for preparing the annual
bud It is indicative in nature, showing probable developments
given the policies proposed in the budget. Medium-term plans were
-made after the war for the purposes of reconstruction and allocation
of Marsll Plan fund; but were discontinued in 1952.
The emphasis on short-term planning was due to the open nature of
the Dutch economy which necessitated rapid adaptations to changing
international conditions. Furthermore, concentration on macro-eco-
nomic forecasts rather than detailed planning reflected a desire to
respect the independence of private enterprise. However, an increasing
concern with growth promotion and the realization that many policy
actions had longer-term consequences led the Government, in 1963, to
undertake medium-term planning once again in close collaboration
with industry, with the aim of promoting.economic development. This
mandate specifically envisages the analysis of particular sectors.
Since the short- and medium-term plans differ in context and in the
procedure for their realization, they must be examined separately.

The annual plan is developed in several stages, in connection with
the budget procedure. In May or June of the year preceding the
budget year, a preliminary draft of the forecasts based on several
policy alternatives is circulated among ministries and to the REA.
The budget proposals are worked out on the basis thereof. A Prelim-
inary Plan is then presented to Parliament together with the budget
proposal; in September. The purpose is to furnish Parliament with
additional information on the current economic situation and prospects
for the coming year. Included are variants for different assumptions
for various significant factors such as world trade growth, raw ma-
terials p and wage inflation.
The Central Economic Plan itself takes account of possible policy
modifications introduced during the Budget debate and is published
in March or April of the current year. It is much more detailed than
the Preliminary Plan and unlike the latter gives projections for each


industrial branch. Variants are once again presented. Its publication,
is approved by the REA.
During the preparation of the Plan, coordination is maintained
informally with the ministries concerned. Furthermore, an annual
survey of business expectations is conducted in October and November
when the CPB undertakes oral interviews with about 100 large firms
to discuss investment plans, sales expectations and pricing policies.
This data acts as a check on the CPB's own estimates.

Like the annual plan, the five-year plan is purely projective in
nature. The annual plan takes account of the measures to which the
Government is committed by the budget, but the five-year plan's pro-
jections of public policy measures are not binding. The forecasting
period coincides with that used by the Commission of the European
Communities and is similar to that used for investment planning in
industry. The aims are to achieve better coordination between public
and private spending, and to improve the quality and regularity of
private investment decisions by -providing a coherent view of the
future of each sector within the framework of overall economic devel-
opment. Through a better insight into wage and price trends it also
aids the development of an incomes policy. Forecasts are made for
23 sectors.
A broad range of preparatory studies, involving the development of
the econometric relationships to'be used as well as the choice of policy
alternatives, made by the Council of Economic Affairs, constitutes
the first phase. A series of consultations takes place, both with the
eight industry working groups mentioned,. and with ministry experts.
These consultations are held to have an important coordinating in-
fluence. The plan is finally approved by the Central Planning Com-
mission and the Council of Economic Affairs. The entire procedure
lasts almost two years.
So far, two such plans have been made, for 1965-1970 and 1968-
1973, and a third, for 1975-1980, is in preparation.
Parliament has no opportunity to accept, reject or modify plans
presented by the Government. Within the short-term framework, dis-
cussion concentrates on the Budget, the probable consequences of which
are shown by the preliminary plan. Short- and medium-term plans are
discussed however in the Economic Committee of the Chamber of
Representatives, with the Minister of Economic Affairs and the
director of the CPB.
The problem of relating the annual plan to the medium-term plan
is being dealt with both through the development of dynamic models
showing the year-by-year evaluation of the economy and through
periodic updating; the intention is that the medium-term plan should
be "revolving" in nature, updated every two years.
The sophisticated modeling capabilities of the CPB are also at the
disposal of Parliament which may request simulation of the conse-
quences of policy measures advanced by a particular group. At elec-
tion time, parties may thus request that the effects of their platform
be modeled. Their services are also used on the occasion of wage negoti-
ations. In order to fulfill this function, the CPB makes a considerable
effort to remain apolitical, not always wholly successfully.


Instruments of economic policy are mostly of a general nature
reflecting the Government's desire to respect the freedom of private
enterprise. In addition to the usual tools of fiscal and monetary policy,
the Government can impose a ceiling on bank lending, and restrict
local authority spending.
A much more powerful instrument is the granting of building li-
censes, which are subject to a complex procedure of public enquiries at
municipal, provincial, and national levels, in accordance with regional
planning and environmental directives. Accelerated depreciation, as
well as outright deduction of investment expenditures from income,
are also used, as are wage and price policies where the Government
can impose solutions if employers' federation and unions cannot reach
agreement. Control over public sector expenditures also constituteS
a means of influence since the Government is responsible for 40 per-
cent of total investment and as much as 60 percent in the housing sec-
tor, and undertakes infrastructure development policies to promote,
economic development (ports, etc.).
A regional policy instrument, the selective investment law, taxes in-
vestments in the crowded western region of the country. Grants are
given for investment in less developed regions.
Dutch economic planning is, however, moving towards a greater em-
phasis on direct selective measures. The last general economic policy
statement, made in 1966, concentrated on overall measures to promote
growth, setting forth the five major goals as follows: (1) Growth, (2)
fair income distribution, (3) balance of payment equilibrium, (4) full
employment, and (5) stable prices. However, growing concern with
environmental and raw materials problems is leading towards a new
policy orientation where, in particular, the Government will intervene
more directly at a sectoral level. Growth will be encouraged subject to
four explicit constraints: Environment, urban planning, energy and
raw materials considerations, and international policy considerations,
given Holland's dependence on foreign trade. The Ministry of Eco-
nomic Affairs will be obliged to work out a development strategy ex-
plicitly examining the future of each sector in the Dutch economy.
Declining or backward sectors will be reorganized, if necessary,
through a new organization, the Netherlands Restructuring Company,
a public corporation on the council of which representatives of the
Ministry of Economic Affairs, the Social Affairs ministry, the em-
ployers' federations, unions and appointed experts will sit.
So far, economic planning in the Netherlands can best be character-
ized as the systematic use of econometric analysis to evaluate policy
measures designed to promote growth in a free-enterprise economy.
Its purpose is informative; Dutch plans do not comprise statements of'
goals and the means to be taken to achieve them but simply represent
conditional forecasts of the effects of certain policies. Its usefulness
is to help achieve consensus, through a complex structure of consul-
tation, among the many political and religious groups comprising the
Dutch political spectrum. The decision-making process is not rapid
in the Netherlands and some fear that the new and increasingly com-
plex systems of integrated planning being developed may collapse of
their own weight. A good part of the relative success and acceptance
of economic planning as a contribution to public debate must be as-
cribed to the Dutch school of econometrics, with its strong emphasi&
on practical and useful data analysis techniques.


The Planning Department of the Ministry of Finance is respon-
sible for coordinating economic planning. The major planning docu-
ment is the Long Term Program, a statement of the Government's
program for the period of the next legislature, presented before the
elections. Its preparation is very decentralized, each ministry under-
taking the planning in its own area.
Econometric models, prepared by the Central Statistical Office, are
extensively used for planning purposes, particularly for the analysis
of policy alternatives. Short-term forecasts are made in conjunction
with the annual budget process. A comprehensive system of social and
economic statistics facilitates horizontal contacts between Ministries,
which are encouraged by the Planning Department.
During the 1960's a four-year budget plan was developed and is
now updated annually.
The major instrument of control over economic activity is the credit
system. Surplus demand for investment is created by controls over
capital movements and bond issues. Eight specialized State banks
offer credits for specific sectors or purposes. The sums loaned by each
are approved annually by Parliament. The principal aims of this
policy are to ensure that economic development is evenly spread over
the country and to allow business cycles to be controlled.
In the last few years there has been a trend towards increased State
intervention, particularly in connection with the oil discoveries and
with environmental concerns. The Establishment Control Act, re-
cently adopted, requires firms to obtain licenses for new plants or ex-
pansion of existing ones.
The Norwegians have been notably successful in developing econ-
,ometric methods for planning and in achieving efficient policy co-
ordination among Government departments.

The origins of Norwegian economic planning go back to the 11930's.
The first economic plan, essentially a public-works program to stimu-
late the economy through public expenditure, was prepared by the
Labor Party in 1933. After the war, planning occurred directly
through the budget process, in which real economic resources were al-
located to specific ends through a system of direct controls. Separate
budgets were published for production, imports, exports, private real
investment, and public and private consumption of goods and services
and manpower. The controls were planned through separate budgets
for import permits, building licenses and commodities.
See "English Translations," p. 95.

The first long-term plan, covering the period 1946-1950 was pre-
sented, together with an economic plan for 1946, as an appendix to the
ordinary fiscal budget. It presented alternatives for resource use, one
emphasizing high investment for economic development, the other a
rapid return to high consumption levels. The alternative chosen in
Parliament stressed maximum investment in export-oriented indus-
tries with a long-term return, such as hydroelectricity and metals
refining, mining and shipping.
This first budget set the pattern for subsequent policy, designed to
maintain high investment while controlling wage and price increases,
very important in an economy where exports represent over 50 percent
of GNP.
Emphasis on direct controls gave way, in 1952, to more conventional
fiscal and monetary technique& Strict control of credit and foreign
exchange remains. It should be stressed, however, that until recently
there was very little other direct control over private enterprise which
since the war was relied on for most economic activity.
The Long-Term Program constitutes a statement of the goals of the
Government's policies. It establishes guidelines for the disposal of
resources and, an extremely important function, aids in the establish-
ment of coherent plans for the Government's own activities and poli-
cies. It is made around a set of economic forecasts. Normally the con-
sequences of several different policy alternatives are presented. The
four-year period of the program covers the time-span of a legislature.
The program is submitted *n the spring of election year as a report to
Parliament and is debated; after the elections the new Parliament
debates it once again. It does not have the force of law and does not
bind the Parliament. It is regarded as a campaign platform for the
parties supporting the Government.
The Parliament does not vote on the Long-Term program and sel-
dom introduces modifications. If it should disagree with the program
its recourse is a vote of no confidence. However, given the broad con-
sensus on economic and social goals, the positions of new Parliaments
on the program's goals seldom differ greatly from their predecessors'.
The Long-Tenn Programis prepared under the supervision of the
Planning Department of the Ministry of Finance. Policy directives
are furnished by a Cabinet Committee, aided by the National Budget
Committee, grouping representatives of the various ministries
Preparation of the plan is very decentralized; the responsible group
within each ministry prepares the plan for its own area. In occasional
cases, aspects may be prepared by expert commissions which may in-
clude representatives of private organizations. It is felt to be very im-
portant that the area of competence of each Ministry should be
Coordination of this work takes place within each ministry and is
supervised by the Planning Department. A great deal of importance
is attached to horizontal contacts between ministries and groups, a
process much facilitated by the small size of the agencies, by a tradi-
t'ion oalc raion, and by a high level of apprecia-
tion of the purposes and goals of economic planning within all minis-
tries. The PlanningDepartment's own drafts based on the Ministry
reports are then circulated back to the ministries for comment. A


further role of the Planning Department is to encourage thinking on
current or prospective problems, and coordinate the execution of
studies on specific important issues.
Methods of quantitative analysis play a very important role in the
Norwegian planning process. The national accounts were developed
extensively for planning purposes. The emphasis on sectoral invest-
ment led to early development of interindustry analysis. The Central
Statistical Office provides the data bases and develops the econo-
metric models, maintaining very close relationships with the responsi-
gible ministries. The principal tool for one- and four-year projections
has been the MODIS series of extended input-output models. Longer-
term "guideline" projections have been carried out for 30-year time
horizons, most recently with the MSG model also based on an input-
output approach developed with the University of Oslo.
Models are used for forecasting but perhaps even more for assuring
the coherence of sectoral forecasts and for data processing. They pro-
vide a basis for the reconciliation of ends and means and discussion of
policy alternatives.
The Central Statistical Office has also developed models for analyz-
ing the effects of taxes on income distribution, and the effects of wage
levels on prices, (Price-Income Model) which have played a signif-
icant part in the centralized wage bargaining procedures. The one-
year economic plan ("national budget") is prepared by the Economic
Policy Department of the Ministry of Finance which is also respon-
sible for short-term economic policy and updating the four-year Long-
Term Program projections which are now revised and published an-
nually. It is also responsible for determining the loan volumes for the
state banks.
In 1963, the Ministry of Finance requested ministries to submit pro-
posals for a "tentative financial budget". The aim was to supply pros-
pective expenditure totals for each year of the 1966-1969 program pe-
riod. These were designed to provide a link between policy statements
and expenditures. These estimates were presented in 1965. The 1966
figures were used as tentative totals for the annual budget request. The
expenditure estimate for 1969-1973 was published, and in 1970 it was
decided that these tools should be updated annually.
This budget is program-oriented and agencies have to provide esti-
mates in standard form for each program area. Revenue estimates are
generated, on the basis of various tax assumptions, by the MODIS
model. The long-term financial budget provides a valuable guide to
the future financial implications of present policies, and has been well
received by the Parliamentary Finance Committee at whose request
it is now uDdated annually.
The Norwegian authorities use direct controls over private industry
through environmental and pollution regulations and building licenses.
These latter are used to discourage construction in the more developed
regions; the level of the investment tax is varied among regions for
the same purpose. A more stringent regulation, the establishment
control system, is under consideration; this would require companies
to obtain permission for all modifications or new construction, giving
the Government more control over industrial location. Government
influence over industry has also increased in recent years as a result
of a policy of buying shares in major companies, by taking over a

,number of firms in financial difficulties, and by creating some new
industries. The aim of this policy is partly to fulfill the aims of
regional development or, as in the case of the recently-created national
oil company, to ensure public influence in industries likely to have a
major social impact.
The major instrument of control, however, is the credit system. As
was the case after the war, the Government maintains surplus demand
for investment through strict control of bond issues and international
capital movements. The aim is to promote investment through a stable
and low interest rate, favoring heavy, long-term projects such as
hydroelectric plants, and to control the business cycle by maintaining
a reservoir of pent-up demand. Credit demand is estimated by the
Bank of Norway, which draws up an annual credit budget; this is the
basis for credit management. An econometric credit model is under
development at the Bank.
Sectoral distinctions are made through the existence of eight State
Banks, for agriculture, housing, municipalities, industry, fisheries, edu-
cation (student loans), regional development and a special bank to aid
newspapers in financial difficulty. These banks are financed by the
The State Banks are provided with loan funds through two meas-
ures, first, the policy of running a Government budget surplus and sec-
ond, a requirement for financial institutions to place up to 40 percent
of their assets in Government bonds. These requirements are lower for
banks and pension funds in the North of the country. They are also
financed through the Post Office savings system. The state banks offer
credit for investment which is in line with Government policy, and
interest rates and funds available are modified by Parliament. These
banks made about 30 percent of total loans in 1974, a proportion which
has been increasing.
The Monetary and Credit policy act of 1965 sets out the bond pur-
chase requirements.2 Section 15 gives the authorities power to decide
the total volume of bond issues and their distribution among borrowers.
Companies or municipalities not given access to the domestic market
can be permitted to borrow abroad; the larger and better-known
borrowers are more likely to be given this alternative since they can
afford the generally higher interest rates and have better credit stand-
ing. The Government maintains a credit ceiling on private bank loans
by voluntary agreement. These measures have kept investment
demand in Norway very regular.
Norwegian planning does not involve formal consultation with
industry as in France but informal contacts are widely maintained,
particularly on policy instruments.
Norway has succeeded in maintaining one of Europe's highest invest-
ment rates together with a level of unemployment seldom exceeding
1 percent. Integrated planning is relatively easy in Norway, given the
small and socially integrated population, a Government organization
with a strong tradition of interdepartmental coordination, and, thanks
to the Norwegian school of economics, a high level of sophistication
in Government on the practical application of economic tools. The
objectives have remained growth, encouragement of export industries,
2 See "English Translations," p. 97.

regional development and fair income distribution. Consensus on goals
has enabled the authorities to maintain policies of economic control
more consistent than those used in other Euroan countries, although
the measures themselves are not peculiar to Norway. Environmental
considerations, now gaining in importance, reflect slackening interest
in growth for its own sake and an increasing concern with quality of
life. The advent of oil has been the object of much study, the social
consequences having received even more attention than the purely


Germany has no comprehensive economic planning apparatus; how-
ever, in a number of specific areas, planning measures have been intro-
duced. The Government also has a substantial influence over invest-
ment through its relationship with the banking sector.
The main overall macro-economic policy measure is the Stability
and Growth Law of 1967,1 providing for:
Presentation of an annual economic report to Parliament.
Creation of reserve funds 'and a "queue" of investment projects
which can be undertaken in the case of recession.
A medium-term finance plan, projecting Federal expenditures
and receipts over four years.
Creation of "Concerted Action" groups, made up of representa-
tives of Government, unions and employers' associations, to
evaluate the economic situation and make policy recommendations.
The Federal Government also calls on a group of independent eco-
nomic advisors to comment at least annually on economic develop-
An active structural policy is pursued. The Federal and State gov-
ernments cooperate in programs of regional development. Agriculture,
coal-mining and transport are directly supported.
Programs for encouraging productive investment include tax ad-
vantages for certain categories of investments, and loans under pref-
erential conditions for small business, and for local government proj-
ects. Special State Banks distribute these loans.
The German Government benefits from an excellent statistical service
and has considerable informal influence on industrial development
through the banking system and industry associations.

The prewar and wartime economy of Germany was totally managed
through a system of direct physical controls. Postwar reconstruction
was hindered, from 1945 to 1948, by the Allied occupying powers
whose economic policies were influenced by rapidly changing political
considerations. The monetayreform of 1948 was accompanied by eco-
nomic policies based on the "social market economy" neo-liberal theor-
ies of Eucken and Bohn. The State, by selective intervention, main-
tains a framework within which market forces operate. It assures
competition through the cartel law and through aid to small busi-
nesses. It controls business cycle fluctuations and provides social ameni-
ties to safeguard the position of disfavored segments of the popula-
The free market gained much of the credit for the extraordinary
growth of the German economy over the next 15 years. Yet the role
of the State, in encouraging investment through tax incentives and
I See "English Translations," p. 48.


loans on advantageus terms, was in fact very important. It should also
be recalled that the Federal Republic possessed a valuable resource in
the form of the best-trained industrial labor force and managerial
staff in Europe, and that German productive capacity in 1946, even
allowing for war damage, was substantial.
A more explicit interest in planning has developed since 1966, when
the Social Democratic Party, which had in 1958, at its Bad Godesberg
conference, accepted the principle of an economy in which market
forces would play a significant part, formed a coalition government
with the Christian Democratic Party. This change coincided with Ger-
many's first postwar recession.
The German federal structure poses many legal and administrative
obstacles to integrated planning, as does the principle of individual
responsibility of Ministers of Parliament.2 Since the Linder (Federal
states) are charged with responsibility in many areas, coordination of
plans on a national level in areas such as agriculture or education has
run into Constitutional problems. Similarly, the independence of the
Ministries poses barriers to interministerial coordination.
The three principal agencies responsible for managing the economy
are the Ministry of Economics (Wirtschafts-Ministerium), the Min-
istry of Finance and the Central or Federal Bank (Deutsche Bundes-
bank). The Ministry of Economics undertakes economic forecasting,
structural policy, and planning and investment stimulation. The Min-
istry of Finance, apart from its responsibility for the budget, makes
the medium-term Financial Plan and administers tax incentive meas-
The German Central Bank enjoys an usually autonomous position by
European standards; Article 12 of the Federal Bank Law of 1957,
while obliging it to work in harmony with the Government's general
economic policies, ,specifically requires that it act independently of
Government directives in carrying out its main task, the safeguarding
of the currency. This independence is considered important both by
neo-liberal theorists and by German public opinion as a result of the
disastrous inflations which followed both World Wars. All public-
agencies must deposit liquid funds with the Federal Bank, and require
its permission to deposit them or invest them elsewhere. In addition, it
keeps detailed statistics on the-investments and indebtedness of com-
panies and public organizations, and prepares financial forecasts and
data used by other agencies. Control over liquidity, access to informa-
tion and its statutory independence allow the Central Bank to play&a
powerful stabilizing role.
Economic planning as it has been developing in the Federal Repub-
lic has comprised three aspects:
Measures to manage the overall courses of the economy,
Measures of control to guide State expenditures, and
Measures designed to achieve certain goals of structural and
regional policy.
Afer the establishment of full convertibility of the mark, in 1958, it
became gradually more obvious that monetary policy alone was insuf-
ficient, in an economy as open as Germany's-, to control the business
cycle, and that a more integrated approach was necessary, particularly
2Article 65 of the Constitution.


in view of the independence of the principal agencies concerned. The
Stability and Growth Law of 1967 was the response to this need and
constitutes the most significant macro-economic policy measure. This
law envisages the presentation to Parliament of an annual economic
report and forecast, the Ja, reswirtsehaftsbericht, published at the
end of January of every year outlining the economic and financial
goals for the current year and the measures proposed to achieve them.
The forecasts indicate the Government's belief about how the economy
should develop over the year; they constitute targets rather than
The Federal Government is authorized to retard or bring forward
projects planned by the various Ministries and can create both at
Federal and Land level, "fluctuation adjustment reserves" in times of
expansion to be used to stimulate the economy in slumps. For the same.
purpose, special borrowing rights are envisaged. The Federal Govern-
ment is also instructed to produce a five-year budget, based on foresee-
able expenditures and revenues (Mittelfristige Finanzplan). Perhaps
most significantly, each ministry is to prepare .a list of its planned
investment programs, by order of priority, creating a "queue" of pro-
grams to be carried out.
It also sets upa "Concerted Action" group, formed of representatives
of the Federal Government, industry associations and trade unions, to,
evaluate the economic situation and suggest measures. These measures
constitute the Federal Government's principal counter-cyclical tool,
together with more conventional control measures via the banking
system and direct investment subsidies. Its implementation is assured
by the Ministers of Finance and Economics, sitting in the Business
Cycle Council with a representative of each Land and four representa-
tives from municipalities.
The medium-term finance plan proposed in this law was to fulfill
three purposes, which encompass at once the aims of business cycle
policy and achieving better control over government activities. First,.
it safeguards financial stability insofar as it permits the outflows
implied by current and pending legislation to be balanced against
expected revenues. Second, it furnishes an overall picture which
should make it easier to distribute resources according to expressed
social needs rather than simply on the basis of the traditional demands
of each ministry. Third, it constitutes a statement of the Govern-
ment's intentions, a "programming of the goals of the Government
which can be expressed in monetary terms in the form of a budget."3
This plan, the execution of which was also required by the Basic
Budget Law of 1969,4 constitutes the departure point for the entire
budgetary process. Its execution is 'assured by a Financial Planning
Council, similar in composition to the Business Cycle Council. The
plan indicates expenditures essentially on a ministry-by-ministry basis,
although those destined to certain problem areas (e.g., energy) are
given separately. It also distinguishes investment from consumption
The medium-term finance plan is regardedas a significant step for-
ward in coordinating the Federal Government's activities, not least
A R. Jochimsen/P. Treuner, Staatliche Planung in der Bundesrepublik, Politik u. Zeit.
geschichte, 2 March 1974, p. 41.
'See "English Translations," p. 56.


because expected revenues are based on a coherent macro-economic
forecasting activity. undertaken by the Economic Ministry..It is felt,
however, that its existence tends to render more rigid the existing dis-
tribution of resources between Ministries since thse tend to regard
the forecasts as promises. Second-which is significant for the effec-
tiveness of the Stability and Growth Law-it appears that about 80
percent of expenditures are "obligatory"-i.e., based on statutory
obligations, such as Social Security-which implies that the Govern-
ment's freedom of action in modifying expenditures is limited. Last,
it does not include Land or municipal expenditures and thus furnishes
only a partial view.
Revenues are calculated on the basis of forecasts prepared by the
Economics Ministry. These forecasts are used by a number of services
to coordinate macro-economic policy, in particular since the introduc-
tion of the Stability and Growth Law. Given their purposes, the
models do not go into a great deal of detail on a sectoral level. Further-
more, these forecasts which take account of proposed policy measures
are not published in detail since it is felt that they could constitute
an "official view" of the future which might provoke "anticipatory
effects" or "defensive reactions" on the part of the economic agents
concerned. This also reflects the so-called "German view" on economic
forecasting; that given the scope for error it is better to have no single
integrated "official" forecast but to encourage a diversity of views of
the future. It is furthermore felt that public discussion of forecasts is
not useful since even Parliament does not possess the technical re-
sources to enter into a worthwhile dialogue.
The Economics Ministry carries out short-term (1-2 years),
medium-term (5 years) and long-term. (10-15 years) forecasts. Poli-
cies are worked out by the Economics and Finance Ministries on the
basis of the models, The Ministry of Labor furnishes an input on
Social Security expenses. The principal policy aims are price stability
and full employment; one of the important roles played by the fore-
casting operations is to ensure that no short-term measures are
adopted which have undesirable medium- or long-term consequences.
The forecasting group makes a "problem paper" every year identifying
such potential issues.
Annual economic evaluations are also made by the "Committee of
Experts for overseeing economic development, (Sachvertindigen-
rat), which identifies trends which might endanger the goals of full
empolyment, price stability and external equilibrium. Established by
a Law of 1963,5 this body, made up of five independent experts from
universities or research institutes, reports to the Government which
is obliged to inform Parliament of its conclusions within eight weeks.
The Committee may report, or be asked to report, more frequently.
A further measure of control which has proved valuable for the
preparation of the Financial Plan is the so-called "Fri.hkoordini-
erung" (early coordination) system in the Chancellor's office. In 1971
an attempt was made under Brandt to set up a coordinated planning
service in the Chancellor's office and several small groups have been
retained. The Early Coordination group is essentially an information
center which collects data on new programs being worked out in the

*'See "English Translations," p. 45.


Ministries, and their financial implications. Another small group in the
Chancellor's office, the long-term planning group, has as its purpose to
identify issues and problems and draw them to the attention of the
Ministries concerned.
The-third major area of 'activity is in structural policy. This has
three facets: Regional development policy, sectoral policy and aid
to small businesses. Planning for regional development requires the
participation both of federal and of regional authorities, and constitu-
tional.obstacles prevented this, although certain parts of the country,
e.g., the frontier regions with the Eastern countries had been declared
to be development zones as early as 1953. A constitutional amend-
ment, Article 91a, adopted in 1969,6 specified "improvement of regional
economic structures" as one of three areas (the others being univer-
sity construction and agriculture and coastal protection) where the
Federal Government could intervene directly with the L'inder in so-
called "Gemeinschaftsaufgaben." The Law of Octoberr 6th, 1969,1 on
regional development requires the preparation of an annual plan
indicating the measures to be undertaken, and the expected results,
over the next four years.
A recent example of a specific Constitutional provision allowing
joint financing and planning by Federal, State and Municipal govern-
ments is Article 104a,8 on investment aid to State and Municipal gov-
ernments; planning committees representing the three levels, for urban,
construction, public transport and hospital finance have been set up.
Sectoral policy is restricted; a culture, coal-mining, transport and
the building industry are directly supported; restructuring plans for
agriculture reflect European Community policies. The biding in-
dustry is the sector chiefly affected by business-cycle policies.
The most important policy tools have aimed at the encouragement
of productive or social investment. Tax concessions and subsidies for
industrial investment, personal savings and for certain regional de-
velopment purposes, against the background of relatively high tax
levels, have proved effective. The Government maintains a number of
special funds, from which loans are made to stimulate public or pri-
vate investment in order to alleviate production bottlenecks or social
problems. Most significant is the European Recovery Program Fund,
representing the counterpart in marks of the dollar sums which were
provided under Marshall Aid. Loans are made available from this
fund at favorable interest rates to further the aims of structural
policy. Small business, the economy of Berlin, environmental protec-
tion as well as projects in developing countries have been the main
areas assisted.
ERP funds are distributed by State Banks, the principal one being
the Reconstruction Bank (Kreditanstalt fUr Wiederaufbau). Created
in 1948, the KW administers ERP funds, and also disposes of its own
capital, partly derived from direct subsidies and partly raised on the
open market; it can also obtain credits directly from the Federal Bank.
Its funds are used for low-interest loans for structural policy purposes,
export financing and aiding developing countries; total loans in 1974
6 See "English Translations," p. 59.
7 Ibid., p. 05.
9 Ibid., p. 60.



were 7,9 billion marks. Since all loans are made'via commercial or
savings banks, the overall "leverage" effect is probably considerably
The total funds to be loaned and the areas to be supported are deter-
mined annually by the Government. Other specialized State Banks in-
elude the Bank for the Equalization of Burdens (aid to war victims),
the Agricultural Credit Bank and the Industry Bank of Berlin.
Although national, integrated planning is not carried out in Ger-
many, the Federal Government in fact has available many of the tools
required to control and coordinate economic development, not the least
being a system for gathering and collating industrial and financial
statistics which is one of the most rapid and complete in Europe.
Direction and coordination of investments is practiced both through
the loan agencies and to some extent, informally, via the powerful in-
dustry associations and the banking system.
Economic planning is undertaken at a State level; an important
purpose of the Gemeinschaftsaufgaben is to achieve integration of
these plans at a Federal level in key areas.
Economic planning is being actively discussed in West Germany in
view of growing unemployment, structural pressures and uncertain-
ties about the future. The Constitutional Reform Commission is dis-
cussing the problems of Parliamentary control over planning in gen-
eral and has proposed to create a Planning Commission so that Parlia-
ment could influence the form and content of plans as early as possible.
The trade union association is also favoring a planning approach
pointing to lower current unemployment levels in France as justi-


The relatively poor performance of the British economy in the
1950's led to the creation in 1962 of the National Economic Develop-
ment Council. This body grouped representatives of Government, in-
dustry, and trades unions, and constituted work groups for major
sectors. The first project -was a study presented in 1963 showing what
measures would 'be required to produce a four-percent annual growth
rate overfive years.
In 1964 the planning sections were merged into a new Department
of Economic Affairs, which was charged with producing a five-year
plan for the 1965-1970 period. Hastily conceived with inadequate
data, this plan was abandoned a year after its inception. The Depart-
ment of Economic Affairs was dissolved in 1969.
From 1961, the Treasury developed a sophisticated medium-term
planning system for public expenditure at all levels of Government.
A weakness under inflationary conditions was that spending was cal-
culated, and authorizations given, in real terms; this is one of the
reasons for the explosive growth of public spending over the last
three years.
In an effort to obtain greater coordination, a number of Ministries
were merged from 1969 onwards creating "super-ministries"-Envi-
ronm ent,Trade, Industry. These Ministries, and the Treasury control
economic development questions. A small planning group, the Cabinet
Policy Review Staff, attached to the Cabinet office, undertakes critical
reviews of official policies.
Regional economic planning is well established in the United King-
dom. Regional Economic Planning Boards oversee development policy
and carry outstrategic development plans for their regions. Certain
areas qualify for special industrial development aid, in the form of
grants, accelerated depreciation allowances, or infrastructure assist-
ance to industries, which are administered by Regional Industrial
Development Boards, These measures, together with steps to improve
the ph sical environment of rundown industrial areas. are considered
to have been the most successful aspects of British policy.
The most recent attempt at national economic plannin-, after a
decade of elipse, is the new National Industrial Strategy. Based on a
painstaking analysis of previous failures and of the growth potential.
of different industrial sectors, it envisages a substantial increase in
investment in keysetors via a variety of means of intervention..
Measures for retaining and redeployment of surplus labor released,
from overstaffed indu will play an important role. The National
Industrial Strategy is so far supported both by employers' associations
and by the trade uni


Unlike the other countries studied, the British have, since the war,
failed to set up effective machinery for national economic policy-
making. Inadequate information and poor communication between
industry and Government are cited as reasons for the excessive opti-
mism and lack of concern which successive Governments have

The shortages of World War II and the postwar period obliged
the British Government to maintain strict physical controls. Nation-
alization of key sectors of the economy increased the State's poten-
tial influence over the economy and some.attempts were made to im-
prove productivity by creating industry teams to study American
experience, and trying to identify and remove obstacles to growth.
The Conservative Governments of the 19,50's limited their inter-
vention to macro-economic measures, leaving the economy to market
forces, without the determined efforts to stimulgate competition adopt-
ed in Germany during the same period. British growth remained slow
and was marked by recurrent crises. These crises showed a common
pattern: demand grew, and British industry, due to underinvestment
and low productivity, was unable to meet it. Pressure on the labor
markets led to wage increases, further stimulating demand, which
could only be met by imports. This created a balance-of-payments
crisis to which the Government reacted with drastic fiscal and mone-
tary curbs, to reduce demand, creating a recessionary situation.
By 1961, it was felt that better coordination of investments and a
more systematic analysis of the weaknesses of and bottlenecks in
British industry was necessary to improve performance and that no
existing Government department was set up for this role. In 1962,
after extensive consultations with industry, the Nationial Economic
Development Council (NEDC), grouping representatives from Gov-
ernment, industry and the trades unions was set up by the Conservative
Government. Its duty was to examine the economic prospects of the
country over five years and to establish what the conditions for realiz-
ing a given growth rate were. Its executive body, the National Eco-
nomic Development Office (NEDO), was staffed by persons appointed
for 2-3 years from Government, industry and universities. It comprised
an economic and an industrial section. Subsequently, small working
groups, economic development committees (EDC's) grouping repre-
sentatives of management, trades unions, Government departments,
experts and a member of the NEDO, were created for each industry;
21 EDC's existed by 1967. At present, it employs about 140 persons.
The first exercise covered the period from 1961 to 1966. It was de-
signed to analyze what obstacles had to be overcome in each sector, to
achieve a 4 percent, growth rate, and what measures Government and
trades unions wouldhave to take to bring it about. The study was pre-
sented in 1963.
When the Labor Party came to power in 1964, part of the economics
section was moved into a newly-created Department'of Economic Af-
fairs which also took over the Treasury departments concerned with
economic growth. This department was essentially a coordinating
body for growth planning and as a line department it was felt to have

more influence than the NEDO which was, however, retained as an in-
dependent discussion forum.
The new Department's first duty was to make a five-year Plan
(1965-1970). This work had, for political reasons, to be carried out
very rapidly. Emphasis was laid on increasing output and raising
GNP by 25 percent by 1970, subject to a balance-of-payments con-
straint .
The resulting Plan was based on very optimistic evaluations of the
speed with which industry reforms could be carried out; indeed indus-
trial consultation was last-minute. The economic analysis had to rely
on a poor data base (the most recent industrial census dated from
1954) and full analytical coherence could not be achieved. Most seri-
ously, a political weighting of the tradeoffs necessary to'. achieve the
Plan's goals and cohesion with other macro-economic policies was
neglected,as was consensus on wage and price policies with employers
and unions. Even the function of the Plan was not clear; it was
described as a "statement of government policy," a "forecast," or
"projection." In fact it was a projection conditional on the realization
of a number of tasks which- were inadequately specified.
In 1966, a further balance-of-payments crisis led the Labor Govern-
ment to sacrifice the whole exercise, in the interests of preserving
exchange parity. This episode brought integrated growth planning,
regarded with much skepticism in any case by many inside Govern-
ment, into disrepute.
Emphasis was then laid on piecemeal efforts to increase industrial
productivity and investment,and some success was achieved through
investment 'grants, which were, however, abolished when the Con-
servatives returned to power in 1970.
In response to a perceived need for greater policy coordination, new
"super-ministries" were created, to improve horizontal communication.
This process was started in late 1969 by the Labor Government and
was continued by the Conservative Government which came to power
in 1970. The Department of Economic Affairs was wound up in 1969.
Each "super-ministry" grouped related activities which could gain
efficiency from a new, broader perspective; thus the Department of the
Environment groups responsibility for transport, building and hous-
ing, and regional planning. This department, the Treasury and the
Department of Industry, charged with industrial development, share
responsibility for economic growth policy with the Ministry of Agri-
cultureF, isheries and Food, responsible for these specific sectors.
Inter ministerial committees have been set up for horizontal coordi-
The Conservative Government also felt the need for a coordinating
body at the Cabinet level which could provide an integrated inter-
ministerial viewpoint on policy issues, with the particular aim of
balancing short-term exigencies and long-term objectives. The Cabinet
Policy Review 'Staff was set up within the Cabinet Office for this
purpose in 1970. Its staff is drawn partly from industry and partly
from the Civil Service and rotates every two to threeyears. On eco-
nomic policy issues it cooperates with the four ministries and the
inter-ministerial committees to develop policies and goals for the


"Government, weighing the costs and advantages of different
A significant advance in inter-ministerial coordination was repre-
-ented by the Treasury's public expenditure planning system, devel-
bp after 1961 along lines set by the Plowden report of that year.
For the first time forecasts were made of all public expenditures,
including social security, regional and local authority expenditures
-and those by the nationalized industries. Each Department submits
estimates for its costs over five years. Expenditures of different bodies
can be broken down by functional category. An econometric model
has been developed for forecasting purposes. A significant innovation
was the fact that forecasts were explicitly related to real resources in
constant price terms. However, recent inflation and substantial changes
In relative prices have created serious problems of control; it is claimed
that methodological weaknesses of the system have been partly
responsible for the very rapid unplanned growth in money expendi-
tures over the last three years.
Regional economic development has been the most significant plan-
ning activity since the war. The decline of traditional heavy industries
in the North and West led to structural problems. The first legislation
on this problem dates from 1934. The Distribution of Industry Act
of 1945 empowered the Board of Trade to offer loans and grants to
industries in development areas. Development planning began in the
early 1960's with the establishment of Regional Economic Planning
Boards in each area; the first major strategic plan for a region was
published in 1970. The Industrial Development Act of 1966 and the
Industry Act of 1972 have identified areas in need of assistance and
IndutryActof 172anv61 n dusr
provided for incentives. Measures are directed by an Industrial
Development Executive within the Department of Industry, aided
by an Industrial Development Unit, grouping representatives of
industry, financial institutions, and Government. An Industrial Devel-
opment Advisory Board, comprising members from industry, finance
and international investment firms acts in an advisory role particu-
larlv for major cases for assistance. Regional Industrial Development
Boards have been set up in the seven regions qualifying for aid, and
operate in a planning, role with the Regional Economic Planning
Instruments include up to 100 percent depreciation allowance on
machinery and plant (apart from cars) and 44 percent for buildings
the first year, aid for training and transferring workers, and direct
grants of 20 to 22 percent for buildings and equipment. Factories are
made available for rent or sale on advantageous terms, and grants are
provided to cover the expenses of moving a company.
These policies are complemented by extensive measures for improv-
ing the environment in run-down industrial areas; clearing derelict
land. rebuilding_ housing, and urbanimprovement.
Apart from the nationalized industries, the Government has also
become increasingly involved with industrial problems as a result of
"rescuell operations to support large companies in difficulty.
The increasing flow of funds into the private sector and nationalized
industry has led to a resurgence of the Parliamentary committee
system. Specialized committees of Parliament can obtain written and


oral testimony from public and private organizations and individuals,
as in the United States. The reports, which are normally published,
form a basis for possible legislation and also have a political impact
insofar as they draw attention to particular weaknesses, anomalies, or
abuses. Over the last five years, the Expenditure Committee has been
particularly active. But Parliament, particularly the Opposition, is
very short of research facilities for studying the effectiveness or valid-
ity of policies.
The problem of coordinating these actions and the worsening of the
national economic situation, have reawakened interest in planning.
The present Labor Government is developing an integrated approach
to economic development for the period 1975-1980, together with a
range of instruments for its implementation. In view of the unfortu-
nate experience of the 1965 plan, the Government has deliberately
avoided-using the term "planning"; the new approach, called a
"National Industrial Strategy, provides a framework for consider-
ing the prospects of the most important sectors of industry over a
five-year period and indicates their role in meeting overall economic
goals. These goals are to raise the growth rate, improve regional
wealth distribution, and achieve, with the aid of North Sea oil, a
balance of payments surplus, necessary to repay the large loans con-
tracted abroad.
The emphasis on improving the productivity of certain key sectors
by selective measures and eliminating bottlenecks recalls not only the
planning initiatives of the early 1960's, but indeed some of the imme-
diae postwar plans of other European countries. Itis specifically
intended, a major policy change for Britain, that industrial investment
should take priority over social expenditures. The NEDC will play
a significant role not onlyin analyzing the problems of particular
industrial sectors but also as a meeting-place for the social partners-
industry, unions, and the Government-despite fears that this could
lead to a "corporate state." A large number of studies on obstacles
to growth and the effectiveness of different policy instruments are
being carried out by the Department of Industry, and the new
approach will emphasize not only sectoral intervention but "planning
agreements" between the Government and the major companies, where
the latter will agree to carry out certain investments or activities in
return for guarantees, particularly the maintenance of incentives at
the same level for an extended period. Apart from the planning agree-
ments, the creation of a National Enterprise Board to purchase and
operate inefficient companies is also envisaged, and further nationali-
zations may be carried out. Another agency, the Manpower Services
Commission, which was created in early 1974 with the limited aim
of stimulating training of workers in scarce skills and improving the
matching of jobs with labor, will take on a much wider role in man-
power planning, training, job creation and redeployment.
Preparationof the new policy will require about 12 months of work,
and it is intended that evaluation and updating should be continuous.
Improvements in the system of industrial statistics gathering will
accompany the actions.
It is significant that both the Confederation of British Industry
(CBI) and the Trades Union Congress (TUC) support the new plan-


ning initiative, and favor the National Economic Development Coun-
cil as the coordinating body. The CBI stresses the need for continuity
of policy and as a pendant to this opposes planning agreements, citing
the unsatisfactory experiences of nationalized industry which has been
subjected to political interference. The TUC emphasizes the provision
of jobs and assuring the transfer and retraining of labor. Both regard
economic growth as the overriding goal.
Progress has been made in regional development and the environ-
mental improvement measures undertaken since the war have proved
very successful. However,-.apart from a brief period in the 1960's,
integrated economic planning has never been -attempted in Britain;
the postwar planning was too diffuse in its aims to justify the title.
The Government has a wide range of means of intervention; apart
from the regional policy tools described, it uses the normal methods
of monetary policy, and a diversity of selective fiscal methods have
also been employed, together with statutory wage and price controls.
But overall economic policy has ben characteristically "reactive."
Planning within many British nationalized industries or within
individual ministries has been developed to a very high level. Yet
economic policy has been characterized by a lack of realism and, often,
an excessive optimism as well as a refusal to make firm choices. Policies
have been extraordinarily inconsistent due to a lack of consensus, a
self-aggravating phenomenon. It is claimed that the British Civil
Service is ill-prepared to conduct integrated planning because of se-
crecy, little contact with or experience of industry and lack of training
in quantitative analysis. Finally, British economists are criticized for
excessive concentration on the inner logic of their discipline and insuffi-
cient attention to pragmatic problem-solving. Only from the mid-
1960's have significant numbers of economists entered Government


A number of areas appear of interest for a better understanding of the planning
process. These are listed below. The order is not significant.
(1) The role of econometrics in the planning process.
(2) The relationship between the annual budget and medium-term plans. Sig-
nificant political and technical problems have been experienced in a number of
countries studied. Particular aspects:
(i) How to determine the impact of a change of expenditure in a given year
on the realization of the medium-term plan's objective.
(ii) In what way can planners influence the budget process to ensure re-
spect for a plan's priorities?
(iii) What can be done to introduce flexibility into medium-term plans so
as to allow for the needs of business-cycle policy while maintaining their
usefulness? French, Norwegian, and to some extent, German experience
would be relevant.
(3) The effectiveness of policy instruments, and problems of strategic review.
To what extent do tax measures, investment grants, etc., really influence the
behavior of the economy, and how quickly? What kinds of studies are done to
answer these questions, and how are the results of these studies used to influence
or modify policies? While planners in all countries covered are familiar with these
problems, British and French experience is perhaps the most interesting.
(4) An aspect of problem (3) is the evaluation of the effectiveness of State
lending banks to encourage industrial and social investment. What is their cost?
Do they lead to distortions of resource use more serious than other measures or
than those caused by otherwise existing market imperfections? How productive
are the investments they engender, both directly and in social terms?
(5) The relationship between the legislature and planning; the problems en-
countered by the legislatures in the countries covered and the solutions found.
This issue is under particular study in West Germany.
(6) Experience in restructuring backward industries and of the relative effec-
tiveness of different ways of managing and organizing such industries. The
British, French, and Dutch have experience which Is relevant.
(7) The problem of "corporate" representation through unions or trade asso-
ciations in planning bodies. The Germans and the British seem to be the most
sensitive to the dangers of such systems of representation; the Dutch and the
French are most experienced in their use.
(8) Relations between State planners and large private companies; how can
abuses be prevented? All the countries visited have potentially useful experience
in this area.
(9) The "regionalization" of plans, from the technical and political viewpoint.
In France and Germany, this problem has been given great attention; German
experience with the relationships between central and regional governments in a
Federal context should interest an American audience.
(10) The other aspect of "regionalization" is the relation between national
planners and supra-national bodies. The work of the European Communities
should be of interest in showing the problems in this kind of planning, and should
be studied if policies integrating aspects of the United States economy (e.g.,
energy) with those of other nations were envisaged.

This bibliography gives for each country studied, a list'of documents used under
distinct headings:
(i) Administrative documents concerned with the Plans.
(ii) Specific studies related to planning.
(iii) Planning structures.
(iQV) Bibliography on planning; secondary sources consulted.
It is not intended in any way to be an exhaustive bibliography on planning in
Western Europe. Some annotations in English are provided.

Parliamentary Documents:
Assemble Nationale:
Document No. 1685.......

Document No. 1687......--

Document No. 1693 ......

Document N o. 1880

Plan documents:
Plan commission_

Project de loi, portant approbation d'un
rapport sur l'orientation prdliminaire
du VIIe plan.
Rapport fait au nom de la Commission
des Finances, de l'Economie generale et
du plan (1) sur le projet de loi (no.
1685) portant approbation d'un rapport
sur l'orientation preliminaire du VII*
Avis pr6sent6 au nom de la commission
de la production et des changes (1) sur
le projet de loi portant approbation
d'un rapport sur l'orientation pr6limi-
naire du VIIe plan.
Resolution and reports of 2 committees
on the general orientation of the 7th
Projet de loi de finances pour 1976. Rap-
port 6conomique et financier. (Paris-
Imprimerie Nationale 1975).
Economic report accompanying the an-
nual budget.
Projet de loi de finances pour 1975. An-
nexe. Rapport d'ex cution du Ve plan,
pr~sent6 en Annexe au projet de loi des
finances pour 1975. (Paris-Imprimerie
Nationale 1974).
Report on the completion of the 6th plan,
appendix to the budget for 1975.
VIth economic and social development
plan (1971-75). (La documentation
Frangaise-Paris 1973).
English translation of the 6th plan.
Rapport sur l'orientation pr6liminaire du
VIIe plan. (La documentation frangaise
June 1975).
Report on the orientations of the 7th
Planification r6gionale: analyse des pro-
grammes r~gionaux de d6veloppement
et d'6quipement du 6e plan par thbmes
et par r~gions. (La Documentation
Francaise, June 1973).
Report on regional policy under the 6th


Plan documents-Continued
Plan commission/INSEE

Journal officiel: Jan. 4, 1946.

Les collections de l'INSEE:

C/22 1973------------------

C/24 1973 -----------------

Ministre de

l'Economie et des Fi-

et 6tudes financi res_

Conseil National du Patronat Francais.I


Direction du personnel et services
generaux service de l'information

Bureau d'informations et de pre-
visions economiques.

IN SEE ---------------------------
Bulletin du Ministere de l'Economie
et des Finances 1973, pp. 57-89.

Les indicateurs associ6s au 6e plan.
Document presenting in graphical form
the major economic indicators used for
measuring the progress of the 6th plan,
comparing actual with planned results
(appears every 3 months).
D6cret No. 4612 du 3 janvier 1946 portant
creation la pr6sidence du Governe-
ment d'un conseil du plan de modern-
isation et d'equipement et fixant les
attributions du commissaire general du
The act setting up the plan commission.

Etudes macroeconomiques pour 1975
(March 1971).
Forecasts for 1975.
Le module FIFI-tome 1: presentation
g~nerale et utilisation.
Tome 2: Les equations.
Annexe: Liste des equations du module
Technical monograph on the physical-
financial forecasting model used for the
6th plan.
Rapport technique sur les projections
associes au VIe plan.
Technical report on the 6th plan fore-
Les budgets economiques et leur realisa-
Discussion and analysis of the results of
the short-term forecasting exercises
undertaken by the Forecasting Direc-'
De la forme et des methodes d'un plan
national dans un systbme d'6conomie
de marched.
The basic position paper on planning of
the employers' association.

Organisation du ministbre de 1e'conomie
des finances.
Complete organization structures of
the Finance Ministry (including the
INSEE and Forecasting Director-
Etudes et recherches menses au BIPE
(June 1975).
Organization and activities of the BIPE
(annual report).
Organigramme, au ler novembre.
Structure and personnel of the INSEE.
Methodes et travaux de la Direction de
la Provision (Jacques Billy).
Description of the work of the Forecasting


Plan Commission ...........

University of Paris_

Plan Commission-_ __- __

Bauchet, Pierre.................

Gruson, Claude_
Hackett, J. & A.M__
Lutz, Vera-.......
McArthur, J. and Scott, B. R .......

Sheahan, John ..........

Ullmo, Yves ................

Bibliographie sur la planification franqaise
(May 1974).
Complete bibliography on planning in-
cluding English-language texts.
Bibliographie du cours de M. Yves
Ulimo "La planification en France."
Bibliography for a course on planning
given by Yves Ullmo of the INSEE
(includes EEC publications on com-
munity-level plans.)
Les moyens d'exdcution du plan (by G.
Description of the instruments used in
the 5th plan.
La planification franqaise du premier au
sixzime plan (5th ed.), Seull, Paris 1970.
Origine et Espoirs de la Planification
fran~aise, Dunod, Paris 1968.
Economic Planning in France, Harvard
University Press, 1963.
Central Planning for the Market Economy,
Longmans, London, 1969.
Industrial Planning in France, Division of
Research, Harvard Business School,
An Introduction to the French Economy,
Merrill, Columbus, Ohio, 1969.
La Planification en France, Dalloz, Paris


Centraal Planbureau .....

Ministry of Housing and Municipal

Macro Economische Verkenning 1975,
September 1974 Staatsuitgeverij s' Gra-
Preliminary annual plan.
Centraal Economisch Plan 1975, Staatsuit-
geverij s' Gravenhange.
Manual plan (final version).
Central Economic Plan 1975, introduction
and summary.
English translation of extracts from the
annual plan.
The Netherlands Economy in 1970
Staatsuitgeverij, The Hague, 1966.
English translation of the medium-term
plan, 1965-70.
Brief summary of the physical planning
act, The Hague, 1967.
Summary of the second memorandum on
physical planning, The Hague, 1967.
Publicity observed in preparing the physical
planning policy, The Hague, June 1973.
Planning and research in the sphere of
physical planning, The Hague, De-
cember 1973.
Summary of the Orientation Report on
physical planning in the Netherlands,
The Hague, February 1974.


Central Planning Bureau: Occasional
Paper 2/1974.

Monograph No. 18_

Ministry of Housing and Physical
Central Planbureau Monografie No.

Central Planning Bureau-.....

de Kok, A.C.M_

Netherlands Economic Institute .....

Management Services in Govern-
ment, Vol. 29, No. 3, August, 1974

Verbond van Nederlandse Onder-
nemingen VNO/Nederlands Christ-
eljk. Werkgeversverbond NCW
(Employers' associations).
Verbond van Nederlandse Onder-
nemingen VNO.

Investeringen, Lonen, prijzen en arbeid-
splaatsen by H. den Hartog and H. S.
Technical Study on the relation between
wage increases and unemployment
which created a political furor.
Cost-benefit analysis-second national air-
port in the Netherlands, General Re-
port, December 1974.
Example of a major policy study.
The Organization cf physical planning in
the Netherlands, The Hague 1970.
25 Jaar Cntraal Planbureau. Staatsuit-
geverij-The Hague 1970.
History of the first 25 years of the Central
Plan Bureau.
The Central Planning bureau at work,
1945-1970, December 1970.
English translation of extracts from the
history of the CPB.
The Social and Cultural Planning Agency
for a modern welfare policy, Rijswijk
(ZH), 1973.
Description of the agency.
Structure and activities, Rotterdam, 1975.
Describes the activities of this important
independent research center.
Long-term planning in the Netherlands,
by E. D. J. Kruijtbosch.
Schets van de ANederlandse economie in
1973, The Hague, 1970.
Description of the results of the CPB
5-year plan in popularized form.
Jaarverslag tn kroniek 1974, annual


Royal Norwegian

Royal Norwegian



Central Bureau of Statistics (Working
Paper 10 75/12 26 March 1975).
Central Bank of Norway Norges Bank
Skriftserie No. 1.

of Norwegian long term programme 1974-
1977. Extracts from Parliamentary
Report No. 71, 1972-73.
English translation of extracts from the
4-year plan.
The National Budget of Norway 1975.
Translation of extracts from the National
Budget of 1975.

Petroleum Industry in Norwegian Society
Parliamentary Report No. 25.
Natural Resources and Economic Devel-
opment Parliamentary Report No. 50.
Inflation in the Open Economy: The
Norwegian Model, by Odd Aukrust.
The Norwegianmonetary and credit sys-
tem, by Leif Eide.


Ministry of the Environment, Paper
RGF/AW 6 March 1975.
OECD Working Party No. 6 of the*
Industry Committee DSTI/IND6/

Ministry of Finance Planning Depart-
Bjerve, P. J

Johansen, Leif and Hallaraker,
Kleppe, P

Comprehensive and local planning.
Regional Development Policies: Part II
of the draft chapter on Norway.
Planning and Economic Policy in Nor-
way: A bibliography in English.
Planning in Norway 1947-1956, North
Holland, Amsterdam, 1959.
Trends in Quantitative Economic Planning
in Norway, Article 21, Central Bureau
of Statistics 1968.
Economic Planning in Norway, Universi-
tetsforlaget, Oslo, 1970.
Main Aspects of Economic Policy in
Norway since the War, Oslo, 1968.


Deutscher Bundestag 8/3197__

Bundesministerium der Finanzen ---

Bundesministerium der Finanzen..---

Deutscher Bundestag 7/3601

Bundessteuerblatt 1975/1 pp. 206-211_

Deutscher Bundestag 6/1666


Bundesmiinisterium fuir Wirtchaft__.-

Jahreswirtschaftsbericht der Bundesr-
gierung 1975.
Annual economic report to Parliament.
Finanzbericht 1976; die volkswirtschaft-
lichen Grundlagen und die wichtigsten
finanzwirtschaftlichen Probleme des
Haushaltsplans der Bundesrepublik
Deutschland fur des Haushaltsjahr
Annual financial report, comprising the
4-year financial projections.
Der Finanzplan des Bundes 1975 bis
Summary of the 4-year finance plan.
Vierter Rahmenpian der Gemeinschaft-
saufgabe "Verbesserung der regionalen
Annual report of the Gemeinschaftsaufgabe
on improving regional economic struc-
Investitionszulagengesetz (in der Fassung
vom 24 Februar 1975).
Law on investment subsidies (business
cycle measure).
Grunds~tze einer Strukturpolitik fir
kleine und mittlere Unternehmen.
Outline of structural policy for small
Strukturbericht 1969: Konzept der
Bundesregierung fir eine einheitliche
Strukturpolitik im Bereich der gewer-
blichen Wirtschaft, fuir das Zusammen-
werken mit der Strukturpolitik in
anderen Bereichen und die struktur-
politischen Absichten der Bundesregie-
General structural policy.
Das ERP-Programm 1975.
Annual report of the ERP fund.

Kreditanstalt fur Wiederaufbau.--.
Bundesministerium fiar Wirtschaft-.__

Bundesministerium fur Wirtschaft--

Allgemeines Statistiches Archiv 1/1974
(translation supplied by the Bundes-
ministerium fur Wirtschaft).
Aus Politik and Zeitgeschichte B9/
74 (weekly paper of Parliament).

Deutscher Bundestag:
"Zur Sache" 1/73----------..

WF 11I-227/74

Verfassung und Verfassungswirk-
lichkeit 1974/9:
Pp. 57-95

Pp. 139-176-------..

Ehmke, Horst--------------

Jochimsen, Reimut_- -

Jahresbericht 1974.
Annual report of the KW.
Vierteljahresbericht 111-1970. "Perspek-
tiven des Wirtschaftswachstums in der
Bundesrepublik Deutschland bis zum
Jahre 1985".
Long-range forecast, Ministry of Econ-
Studien-Reihe 1- "Zur entwicklung des
gesamtwirtschaftlichen Produktion-
potentials der Bundesrepublik Deutsch-
Study on economic structure of Germany.
Macroeconomic forecasts and projections
as an Aid to economic policy in the
Federal Republic of Germany, by Dr.
K.H. Raabe.
2 March 19741Staatliche Planung in der
Bundesrepublik Reirmut Jochimsen/
Peter Treuner.
Article on federal planning in Germany:
summary of activities of the 1960s.

Fragen der Verfassungsreform (Part
IC5). Staatliche Aufgabenplanung im
Verhiltnis von Parliament und Re-
gierung sowie von Bund und Landern.
Relationship between parliament and the
planning process.
(ber eine Beteiligung der Fachausschilsse
des Deutschen Bundestages bei der
Aufstellung der RahmenplAne ffir die
Gemeinschaftsaufgaben (by Dr.
Wolfgang Zeh).
Problems of parliamentary committee
participation in planning for the
F6deralismus and offentliche Planiing
(by Dr. Wolfgang Zeh) Carl Heymanns
Verlag KG, Ko1n.
Article on the problems of planning in a
federal structure.
Die Kommunen im Spannungsfeld der
bundesstaatlichen Ordnung (by Dr.
Eckart Busch) Carl Heymanns Verlag
KG, Kaln.
Planung im Regierungsbereich-Aufgaben
und Widerstknde (in Politik als
Herausforderung Verlag C.F. Muller,
Karlsruhe, 1974).
Problems of establishing an integrated
planning system for goal-setting and
coordination within the Federal Gov-
ernment (German original published in
Bulletin der Bundesregierung, Bonn,
July 16, 1970).
Author's experience in setting up a
central planning group.
Planung in der Bundesregierung: Prob-
leme und Perspektiven (in Hoschka/
Kalbhen eds.Iatenverarbeitung in der
politischen Planung, Campus Verlag
GmbH Frankfurt 1975).
Particular problems of planning within
the Federal Government environment.


Bundesministerium ftr Wirtschaft-_

Bund-Lfinder Commission for Edu-
cational Planning.

Hallett, Graham
Hankel, Wilhelm__-

Stolper, Gustav, Hauser, Karl, Bor-
chardt, Knut.

Strukturpolitik heute und morgen (in
Reden zur Wirtschaftspolitik, Texte 4,
by Dr. Hans Fridrichs, Minister of
Aims of structural policy (general).
General Plan for education (abridged
version). Example of joint planning at
ministerial and land level in a specific
The Social Economy of West Germany,
St. Martin's Press, New York 1973.
Wdhrungspolitik: Geldwertstabilisierung,
Wahrungsintegration and Sparer-
schutz Kohlhammer Verlag, Stuttgart
The German Economy 1870 to the Present
Harcourt, Brace & World, New York,


Her Majesty's Stationery Office-----

Trade and Industry: Nov. 7, 1975,
(Department of Industry) pp. 322-
Ibid., Nov. 14, 1975, pp. 386-389....

Trades Union Congress-----------
Confederation of British Industry.-

Trade and Industry: Mar. 7, 1975---

Beckman, W.(e.
Cairnoross, et aL - -


Public Expenditure to 1978-1979, Com-
mand Paper 5879.
First report from the Expenditure Com-
mittee (1975-1976) The Financing of
Public Expenditure, vol. 1: Report.
Sixth Report from the Expenditure Com-
mittee (1971-1972): Public Money in
the Private Sector, vols. I and II.
Regional Development in Britain (Central
Office of Information reference pam-
phlet 80).
A joint framework for social policies:
Report by the Central Policy Review
"An approach to industrial strategy"-
paper by the Chancellor of the Excheq-
uer and the Secretary of State for
Industrial strategy.
Trades Union Congress Economic Re-
view 1975.
The Constructive Approach to Industrial
Policy (paper G250 75).
Guide to the Departments of Industry,
Trade and Consumer Protection: 4th

The Labour Government's Economic Record
1964-70, Duckworth, London 1972.
Britain's Economic Prospects Reconsid-
ered, George Allen and Unwin, London
Economics and Economic Policy in Britain
1946-66, George Allen and Unwin,
London 1968.


MacLennan, Forsyth and Denton Economic Planning and Policies in
(Political and Economic Planning). Britain, France and Germany, Praeger,
New York 1968.
Shonfeld, Andrew-----------------Modern Capitalism, Oxford University
Press, London 1965.


Office des Publications officielles des
Communauts Europ6ennes-Lux-

Legislative/Administrative texts

Premier programme de politique 9cono-
mique d moyen terme 1966-70.
Serie: Politique 6conomique A moyen
terme-Fascicule 1.
Second programme de politique tconomique
e moyen terme.
Serie: Politique 6conomique A moyen
First and 2d 5-year economic policy
Journal officiel des Communautes euro-
p6ennes March 1st, 1971. Legislation-
71/107/CEE: Troisieme programme de
politique 6conomique &. moyen terme.
Text of act adopting the objectives of the
3d program.
March 5, 1974: D6cision du conseil du 18
fevrier 1974 relative A la realisation
d'un degr6 lev de convergence des
politiques economiques des Etats mem-
bres de la Communaut6 6conomique
europ6enne (74/120/CEE).
Decision on integration of business cycle
and medium-term policy.
Directive du conseil du 18 fevrier 1974
concernant la croissance, la stability et
le plein emploi dans la Communaut6
Directive for harmonisation of business-
cycle policies.
Decision du Conseil du 18 f6vrier 1974
instituant un Comit6 de politique
economique (74/122/CEE).
Decision setting up economic policy
Perspectives pour 1975: evolution globale et
problfmes de politique 6conomique dans la
Premiere partie: perspectives et prob-
lemes au niveau communautaire.
Seconde partie: projections des pays
membres Brussels, March 1971.
Study giving forecasts and evaluations
for the 5-year period of the 3d program.
Report of the Study group "Economic and
Monetary Union 1980": European
communities commission; directorate-
General for economic and financial
affairs. Brussels, March 1975.



Prepared by the European Law Division, Library of Congress,
Under the Supervision of Dr. Edmund C. Jann, Acting Law

The Federal Diet has adopted the following law:

(1) A council of independent experts shall be created for the periodic
survey of overall economic developments in the Federal Republic of
Germany, and to facilitate decision-making at all [governmental]
levels responsible for economic policy as well as among the public at
(2) The Council of Experts shall consist of five members who must
have special knowledge in the economic sciences and experience in the
national economy.
(3) The members of the Council of Experts may not belong to the
government or to a legislative body of the Federation or a land, or be
in the public service of the Federation, a land, or other legal entity
of public law, with the exception of professors of institutions of higher
education or assistants in institutes of the economic or social sciences.
Furthermore, they may not be representatives of an economic associa-
tion or of an organization of employers or employees, nor may they
be in a permanent employment or management relationship with such
[entities]. They also may not have held any such positions in the year
preceding their appointment to the membership of the Council of
The Council of Experts shall describe in its survey the overall cur-
rent economic situation as well as its foreseeable developments. In
addition, it shall investigate how the stability of price levels, a high
employment rate, and a balance of foreign trade can be assured within
the framework of the free market economy at a constant and reason-
able growth rate. The investigation shall extend also to the creation
IGerman translation by Dr. William S6lyom-Fekete, Senior Legal Specialist, European
Law Division, Law Library, Library of Congress.
2 Promulgated in the Bundesgesetzblatt [official law gazette of the Federal Republic
of Germany] I, p. 685.
(4;. )


and distribution of income and capital assets. The Council of Experts
shall especially set forth the reasons for the actual and possible stresses
between supply and demand in the overall economy which may jeop-
ardize the goals described in the second sentence. In the course of
investigation, several different assumptions shall be taken as a basis
from time to time, and the ascertainable effects thereof shall be set
forth and evaluated. The Council of Experts shall point out the de-
ficiency developments and the possibilities for the prevention or elimi-
nation thereof; however, it shall not express recommendations for
specific measures of economic or social policy.
(1) The Council of Experts shall be bound only by the duties estab-
lished in the present Law and shall be independent in its activity.
(2) If a minority represents a dissenting opinion on individual
questions in the drawing up of the survey, it shall have the opportunity
to express such in a survey.
Prior to the drawing up of the survey, the Council of Experts may
give the opportunity to persons deemed suitable, especially to repre-
sentatives of organizations in the economic and social field, to take
a stand on significant questions pertaining to its duties.

(1) The Council of Experts may, insofar as it finds it necessary to
discharge its duties, give a hearing to professionally competent federal
ministers or to the President of the German Federal Bank.
(2) The professionally competent federal ministers and the Presi-
dent of the German Federal Bank must be heard upon their request.
(3) The authorities of the Federation and the laender shall render
official assistance to the Council of Experts.
(1) The Council of Experts shall prepare a survey annually as
of November 15. Beyond that, it shall issue additional surveys at its
own discretion, if in individual fields developments are ascertainable
which jeopardize the goals described in the second sentence of
Section 2.
(2) The Federal Government may commission the issuance of
additional surveys under the second sentence of paragraph 1.
(3) The Council of Experts shall immediately file its survey with
the Federal Government and make it public 8 weeks thereafter. Sur-
veys, in accordance with the second sentence of paragraph 1 and under
paragraph 2, may be made public at another time with the approval
of the Federal Minister of the Economy.
(4) The Federal Government shall comment on the survey done
in accordance with the second sentence of paragraph 1 to the legisla-
tive bodies at the time of its publication. In the comment, especially
the final conclusions for economic policy which the Federal Govern-
ment has deduced from the survey shall be disclosed. The Federal
Government may also comment on other surveys.


(1) The members of the Council of Experts shall be appointed by
the Federal President upon nomination by the Federal Government.
On March 1 of each year-for the first time, after the expiration of
the third year following the drawing up of the first survey done under
the first sentence of Section 6 (1) -one member shall retire. The order
of retirement shall be established by lot at the first session of the
Council of Experts.
(2) The Federal President shall appoint a member, upon nomina-
tion by the Federal Government, for a term of 5 years at a time.
Reappointment is permissible. The Federal Government shall hear the
members of the Council of Experts before the nomination of a new
(3) The members shall be entitled to resign their office by sub-
mitting a statement to the Federal President.
(4) Should a member retire before the expiration of his term, a
new member shall be appointed for the unexpired term of the retiring
member; paragraph 2 shall apply accordingly.
(1) Resolutions of the Council of Experts shall require the con-
4currence of at least three members.
(2) The Council of Experts shall elect a chairman from among
its members for a term of 3 years.
(3) The Council of Experts shall make its own rules of order.
The Federal Office of Statistics shall assume the functions of a busi-
ness office for the Council of Experts. The activity of the office shall
consist of the arrangement and compilation of source material, the
technical preparation for the sessions of the Council of Experts, the
printing and publication of the surveys, and the carrying out of such
other administrative tasks as may arise.

The members of the Council of Experts and the persons belonging
to the business office shall be obligated to maintain secrecy on the delib-
erations and on such documents on which the deliberations are based
as may be designated as confidential by the Council of Experts. The
secrecy shall also extend to information which is given to the Council
of Experts and is designated as confidential.

(1) The members of the Council of Experts shall receive a lump
sum compensation and reimbursement for their travel expenses. These
shall be determined by the Federal Minister for the Economy in con-
currence with the Federal Minister of Finances.
(2) The expenses of the Council of Experts shall be borne by the


The present Law shall apply to the Land Berlin in accordance with
Section 13(1) of the Third Law of Transition of January 4, 1952
(Bundesgesetzblatt I, p. 1).
The present Law shall enter into force on the day following its
The constitutional rights of the Federal Council have been observed.
The Federal Government has granted its approval as required by
Article 113 of the Basic Law to the above Law.
The above Law shall be herewith promulgated.
Bonn, August 14, 1963.
The Federal President,
The Acting Federal Chancellor,
The Federal Minister for the Economy,
The Federal Minister for the Interior,
The Federal Minister of Finances,

The Federal Diet in concurrence with the Federal Council has en-
acted the following Law:
The Federation and the laender shall, in formulating economic and
fiscal policy measures, consider the requirements of a balanced econ-
omy. These policy measures shall, to the extent compatible with a
market economic system, promote a stable price level, high employ-
ment, a balance of foreign payments [consistent with] steady and
reasonable growth of the economy.

(1) The Federal Government shall submit an annual economic
report to the Federal Diet and the Federal Council in January of
each year. The annual report shall include:
1. The comments on the annual survey of the Council of Eco-
nomic Experts on the basis of Section 6(1)3 of the Law on the
Creation of the Council of Experts for the Survey of ;Overall
Economic Developments of August 14, 1963 (Bundesgesetzblatt I,
p. 685) in the version of the Law of November 8, 1966 (Bundes-
gesetzblatt T. p. 633):
2. An exposition of the goals of the economic and fiscal policy
of the Federal Government for the current year (annual projec-
tion); the anuual projection shall make use of the means and
form [used] for national income accounting, if necessary with
an alternative accounting;


3. An exposition of the economic and fiscal policy planned for
the current year.
(2) Measures under Section 6(2) and (3) and Sections 15 and 19
of the present Law, as well as under Section 51 of the Income Tax
Law and Section 19c of the Corporation Tax Law, shall be consid-
ered only if the Federal Government at the same time substantiates
for the Federal Diet and the Federal Council that such measures are
permissible to prevent a threat to the goals [.set] in Section 1.

(1) In case of a threat to one of the goals in Section 1, the Federal
Government shall make informational data available to the territorial
authorities, labor unions, and associations of enterprises for simul-
taneous 'and concurrent action (concerted action) for achieving the
goals of Section 1. These informational data shall include specially
a description of overall economic relationships in reference to the
given situation.
(2) The Federal Minister of Economy upon request shall explain
the informational data to any of the interested parties.
In case of an external disturbance of the balance of the overall
economy, which cannot be avoided by internal economic measures or
can be avoided only by jeopardizing the goals mentioned in Section 1,
the Federal Government shall use all possibilities for international
coordination.If this is not sufficient, [the Federal Government] shall
apply the measures of economic policy at its disposal to protect the
balance of foreign payments.
(1) The amount and combination of expenditures, and the author-
ization to undertake obligations lasting for future fiscal years, shall
be estimated in the Federal budget in such a manner as is necessary
to achieve the goals in Section 1.
(2) In case of an expansion of demand exceeding the capacity of the
national economy, means for eventual liquidation of debts with the
German Federal Bank or for the increase of the fluctuation adjust-
ment reserves [Konjunkturausgleichsriicklage] shall be estimated.
(3) In case of a weakening of general economic activity which
threatens one of the goals of Section 1, additional necessary funds
shall be drawn, first of all, from the fluctuation adjustment reserves.

(1) In case of an expansion of demand exceeding the capacity of
the national economy, the Federal Government in the course of imple-
menting the Federal budget may, in order to achieve the goals of
Section 1, authorize the Federal Minister of Finances to make, sub-
ject to its approval, decisions on certain funds for expenditures, the
starting of construction works, and the undertaking of obligations to
be debited to future fiscal years. The Federal Ministers of Finances
and Economy shall make the recommendations for necessary measures.


The Federal Minister of Finances shall use the funds thus made avail-
able after the end of the fiscal year for the liquidation of debts with
the German Federal Bank or for the increase of the fluctuation ad-
justment reserves.
(2) Incase of a weakening of general economic activity which may
threaten one of the goals of Section 1, the Federal Government may
decide that additional expenditures shall be made; paragraph (1),
sentence 2, shall be applicable. To prevent a disturbance of the balance
of the national economy (Art. 104a(4) 1 of the Basic Law), the addi-
tional funds shall be used only'for purposes provided for in the finan-
cial plan (Section 9 in connection with Section 10), or as financial
assistance for especially significant investments of the laender and
communities (associations of communities). The funds necessary to
cover theseshall be drawn, first of all, from the fluctuation adjust-.
ment reserves.3
(3) The Federal Minister of Finances shall be authorized to bor-
row, if necessary with the help of money market securities, for the
purposes described in paragraph (2), up to the amount of 5 billion
German marks over and above the credit authorizations received in
the federal budget. If such loans are added to a credit authorization
included in a supplementary budget, the right to borrow may be used
(1) The fluctuation adjustment reserves shall be accumulated at the
German Federal Bank. Funds from the fluctuation adjustment re-
serves shall be used only to cover additional expenditures according
to Section 5 (3) and Section 6(2).
(2) The Federal Government shall decide whether and to what
extent funds from the fluctuation adjustment reserves should be
utilized in the course of implementing the federal budget; Section
6 (1) 2 shall apply.

(1) An unused title for expenditures under Section 6(2)1 shall
be included in the federal budget. Expenditures from this title shall
be made only with the approval of the Federal Diet and only to such
extent as revenues from the fluctuation adjustment reserves or from
borrowing under iSection 6(3) are available. The bill shall be sub-
mitted simultaneously to the Federal Diet and the Federal Council.
Within 2 weeks the Federal Council may convey its opinion to the
Federal Diet. The approval of the Federal Diet shall be deemed as
granted if it does not deny the approval within 4 weeks after the
Federal Government submitted its bill.
(2) Furthermore, an unused title for revenues from the fluctuation
adjustment reserves and borrowing under Section 6(3) shall be in-
cluded in the federal budget.
As amended by Article 12 of the Law of August 30, 1971 (Bundesge8etzblatt 1. p. 1426).

(1) The budgetary policy of the Federation shall be based on a
financial plan made for a 5-year period. The amount and composi-
tion of foreseeable expenditures and the possibilities of their coverage
with their interrelationship to the presumptive development of over-
all economic productivity shall be represented in this [plan], possibly
with alternative accounting.
(2) The financial plan shall be prepared and justified by the Fed-
eral Minister of Finances. It shall be approved by the Federal Gov-
ernment and submitted to the Federal Diet and Federal Council.
(3) The financial plan shall be adjusted annually to [correspond
to] developments and [shall be] ongoing.

(1) As groundwork for the fnancial plan, the federal ministers
shall establish long-term investment programs for their jurisdiction
and shall refer them, with a sundry cost estimate, to the Federal
Minister of Finances within a deadline set by him. The jurisdictions
for which the investment programs shall be established shall be de-
cided by the Federal Government.
(2) The investment programs shall list investment plans which
have to be fulfilled during the coming years, arranged according, to
their urgency and annual appropriations. Each annual appropriation
shall give the continuing and the new investment plans together with
the partial amount falling to the respective year. Financial assistance
by the Federation for investment by third parties shall be listed in a
separate part, using the same principles of arrangement and indica-
tion of the method of financing.
(3) The investment programs shall be adjusted annually to [cor-
respond to] developments and [shall be] ongoing.
In case of a weakening of general economic activity which may
threaten one of the goals of Section 1, the planning of appropriate
investment plans shall be expedited so that their execution may begin
in a short time. The competent federal ministers shall take all neces-
sary steps required for the expeditious awarding of contracts.

(1) Federal funds designated for certain purposes and especially
for financial assistance to agencies outside the federal administration
sha1l be granted only in a manner not contrary to the goals of Section 1.
(2) Everv 2 years the Federal Government shall submit with the
[legislative] bill on the budget to the Federal Diet and the Federal
Council an accounting on the financial aids described in paragraph 1,
especially arranged according to financial aids which serve:
1. The support of industries or of branches of the economy;
2. The adjustment of industries or of branches of the economy
to new conditions;


3. The support of an increase in productivity and the growth
of industries or branches of the economy, especially through the
development of new methods and trends of production.
(3) A survey of tax benefits together with the estimated loss of
revenues shall be attached in an arrangement similar to that in para-
graph 2.
(4) In the surveys stipulated in paragraphs 2 and 3, the Federal
Government shall indicate the legal basis or other obligations on which
the financial assistance or tax benefit was based, and under the given
circumstances when the termination of the financial assistance or tax
benefit may be expected. At the same time, recommendations shall be
made in regard to legislative or other conditions for an earlier termi-
nation or a gradual abolition of the obligations. A timetable in an
arrangement similar to paragraph 2 shall be provided as well.
(1) The provisions of Sections 1, 5, and 6 (1) and (2) shall accord-
ingly apply to the special funds of the European Recovery Program.
(2) Directives required under Section 1 for the German Federal
Railroads and the German Federal Post shall be issued respectively by
the Federal Minister of Transportation and the Federal Minister of
Post and Telecommunication in concurrence with the Federal Minister
of Finances.
(3) Corporations, institutions, and foundations of public law di-
rectly under federal supervision shall take into consideration, within
the framework of their duties, the goals of Section 1.

Sections 5, 6 (1) and (2), 7, 9 to 11, as well as Section 12(1), shall
accordingly apply to the budget policy of the laender. The regulation
of competence shall remain within the jurisdiction of the laender.
(1) In order to prevent a disturbance of the balance of the national
economy the Federal Government may, in concurrence with the Fed-
eral Council through a decree, order the Federation and the laender to
add funds to their fluctuation adjustment reserves.
(2) The total amount to be raised by the Federation and the laender
shall be stipulated in the decree. It shall not exceed in any fiscal year
3 percent of the tax revenues projected for the previous year by the
Federation and the laender, notwithstanding the amounts to be added
to the fluctuation adjustment reserves under paragraph 4.
(3) Unless the Federation and the laender agree on other raises, they
shall increase the total amount in relation to the tax revenue projected
by them for the previous fiscal year, taking into consideration the
adjustment allocations and adjustment amounts under the laender
adjustment. In the calculation of tax revenues of the laender, the mu-
nicipal taxes of the laender Berlin, Bremen, and Hamburg, and the sub-
sidies to be paid under Section 6(2) of the Equalization of Burdens
Law, shall be disregarded. If the Federation or individual laender


have recently increased their fluctuation adjustment reserves in the
same fiscal year, these [payments] shall be credited to their
(4) If the income tax, by virtue of the authorization of Section 51
(3) 2 of the Income Tax Law or the corporation tax under Section 19c
of the Corporation Tax Law, has been increased, the Federation and
the laender from time to time shall add amounts to their fluctuation
adjustment reserves in addition to the current [payments] from the
yield from income and corporation taxes during the period for which
the increase applies, in the same proportion in which this amount
stands in percentage to the percentage of the income tax and the cor-
poration tax.
(5) Amounts added to the fluctuation adjustment reserves by virtue
of a decree under paragraph 1 or in accordance with paragraph 4 shall
be used only to such extent as they are released by a decree issued by
the Federal Government in concurrence with the Federal Council. The
release is permissible only to prevent a weakening of overall economic
activity which threatens one of the goals of Section 1. The first and
second sentence shall also apply to funds described in the third sen-
tence of paragraph 3.
(1) Communities and associations of communities shall take into
account the goals of Section 1 in their budgetary policies.
(2) The laender shall strive through proper measures to ensure that
the budgetary policies of the communities and associations of com-
munities shall correspond to the policy required by economic fluctua-
The Federation and the laender shall mutually exchange informa-
tion necessary to carry out a proper budgetary policy on economic
(1) A Business Cycle Council [Konjunkturrat] for the State shall
be created at the Federal Government. The members of the Council
shall be:
1. The Federal Ministers of Economy and Finances;
2. One representative from each of the laender;
3. Four representatives for the communities and associations
of communities who are appointed by the Federal Council on
the recommendation of the head organization of communities.
The Federal Minister of Economy shall preside over the Council of
Cyclical Economy.
(2) The Business Cycle Council shall deliberate, in accordance with
the rules of procedure issued by the Federal Minister of Economy, at
regular intervals on:
1. All measures of cyclical economic policy required for the
achievement of the goals of the present Law;
2. The possibilitiesfor covering the credit demands of the
public establishments.


The Business Cycle Council shall be consulted, above all, on measures
under Sections 15, 19, and 20.
(3) The Federal Bank has the right to participate in the delibera-
tions of the Business Cycle Council.

To prevent a disturbance of the balance of the national economy,
the Federal Government in concurrence with the Federal Council may
order through a decree that the supply of funds by [means of] credit
within the Iramework of the credit appropriation in the budget laws
and budget decrees be restricted by the Federation, the laender, com-
munities, and associations of communities, as well as the special public
funds and trust funds. The first sentence shall not apply to credits
which are used by the communities, associations of communities, and
associations for special purposes [Zweckverbiinde] for the financing
of the investment plans of their economic enterprises which are not
independent entities.
(1) In decrees under Section 19 it may be provided that:
1. Borrowing by the agencies listed in Section 19 shall be re-
stricted to a [fixed] amount for a set period;
2. Within the framework of the maximum amounts established
under No. 1, credits of a certain type or size, especially loans and
bonded debentures, shall be taken up only in accordance with the
provisions of a timetable and with observation of credit condi-
tions [Section '22 (1) and (2)].
(2) For individual agencies the maximum amount [permitted] for
a fiscal year under paragraph 1 shall be at least 80 percent of the
average amount of the credits used in the 5 fiscal years statistically
covered prior to the issuance of the decree; current account credits ana
working capital credits, credits granted by the German Federal Bank
or one of the agencies listed in Section 19, and credits for the purposes
of the second sentence of Section 19 shall be disregarded. To adjust
the fluctuations in the demand for credit by communities, associations
of communities, and associations for special purposes, the maximum
amount for these may be decreased to 70 percent. Amounts thereby
released shall be allotted by the laender to communities, associations
of communities, and associations for special purposes which have to
fulfill especially urgent investment tasks.
(3) In the decree issued under Section 19, it shall be determined
how far the borrowing by third parties, tantamount economically
to the borrowing of one of the agencies listed in Section 19, shall be
included in the maximum amount [fixed] under paragraph (1)1.The
borrowing of third parties shall especially be taken into consideration
insofar as these guarantee the financing of tasks of the agencies listed
in Section 19 (1), or insofar as such an agency facilitates the borrowing
by interest reduction or allocations of a similar nature.-
(4) Decrees under Section 19 shall be issued for a period not exceed-
ing one year.
(5) The Federal Diet shall be advised of decrees. issued under Sec-
tion 19 immediately after their proclamation. They shall be repealed
without delay if the Federal Diet requests it within 6 weeks after the


If an agency listed in.Section 19 does not use the credit available
within the limits of Section 20 (1)1, another agency listed in Section
19, with the approval of the former, may avail itself of it. At variance
with this, the laender may decide that those fractional amounts from
the maximum amounts of the communities, associations of communi-
ties, and associations for special purposes which exceed the credit
authorization in the budget decrees shall be allotted to other commu-
nities, associations of communities, and associations for special pur-
poses requiring additional demands for credit.
(1) The Business Cycle Council (Section 18) shall establish a
timetable, considering the situation of the capital market, for a
period not exceeding 3 months. In this plan, credits defined in the
decree issued under Section 20(1)2 shall be set forth in the chronologi-
cal order of the borrowing and the size of the amounts; conditions
for credit may be established.
(2) The Federal Minister of Economy may declare the timetable
establishedunder paragraph 1 to be binding; or if in the Council of
Cyclical Economy no agreement wa-s reached, he may in concurrence
with the Federal Council set up a timetable.
(3) In case of a threatening deterioration of the situation in the
capital market, the Federal Minister of Economy in concurrence with
the German Federal Bank may temporarily interrupt the execution
of the timetable. In such a ca, he shall enter into renewed consulta-
tion with the Business Cycle Council within 2 weeks.
(4) The agencies listed in Section 19 are obligated to take into con-
sideration the situation in the capital market in [making] the chrono-
logical order and the conditions for credit, even in the case of such
credits which are not subject to the decree under Section 20(1)2.

The individual laender shall assure through proper measures that
the procurement of funds by way of borrowing by the land, its com-
munities, associations of communities, and associations for special pur-
poses shall remain within the limits of restrictions based on the present
(1) In measures under Sections 20-23, the principle of equal rank-
ing of the duties of the Federation, the laender, and the communities
shall be observed.
(2) The special situation of the lender Berlin, Bremen, and Ham-
burg, which at the same time must fulfill land and municipal duties,
shall be taken into consideration.
Upon request, the highest authority of the land shall give the Fed-
eral Minister of Economy information on the credit demands of the
land, the communities, associations of communities, and associations


for special purposes, on the type and size of credits used by them,
as well as on the borrowing by third parties which economically is
tantamount to direct financing. The public special funds shall submit
directly the information under the first sentence.
[Translator's Note: Sections 26-31 of the foregoing Law provide for amend-
ments of various tax laws. These amendments are not understandable and useful
without having the entire texts of the original laws available. Therefore the
translation of these Sections was omitted.]
The present Law shall apply under Section 12(1) and Section
13(1) of the Third Transitional Law of January 4, 1952 (Bundes-
gesetzblatt I, p. 1) also in the Land Berlin. Decrees issued by virtue
of the present Law shall apply in the Land Berlin under Section 14
of the Third Transitional Law.
(1) The present Law shall enter into force, subject to paragraph 2,
on the day after its promulgation.
(2) The provisions of Section 28, No. 3(a), and of Section 27,
No. 2, with respect to Section 23a(1)2(k) of the Corporation Tax
Law, shall enter into force on January 1,1969.
The foregoing Law is herewith promulgated.
Bonn, June 8, 1967.
The Federal President,
The Federal Chancellor,
The Federal Minister of Economy,
The Federal Minister of Finances,

The Federal Diet in concurrence with the Federal Council adopted
the following Law; Article 79 (2) of the Basic Law has been observed:

The Basic Law for the Federal Republic of Germany of May 23,
19494 (Bundesgesetzblatt, p. 1) shall be amended as follows:
1. Article 109(3) shall obtain the following wording:
(3) By means of federal legislation requiring the con-
sent of the Bundesrat, principles applicable to both the Fed-
eration and the Laender may be established governing budg-
etary law, responsiveness of the fiscal administration to eco-
4English text of the amended version of the Basic Law taken from The Basic Law for
the Federal Republic of Germany (Wiesbaden, 1973).


nomic trends, and financial planning to cover several years
2. Article 110 shall obtain the following wording:
"(1) All revenues and expenditures of the Federation shall
be included in the budget; in respect of federal enterprises
and special funds, only allocations to or remittances from
them need be included. The budget must be balanced as re-
gards revenue and expenditure.
"(2) The budget shall be established by means of a law
covering one year or several fiscal years separately before the
beginning of the first of those fiscal years. Provision may be
made for parts of the budget to apply to periods of different
duration,.but divided into fiscal years.
"(3) Bills within the meaning of the first sentence of para-
graph (2) of this Article as well as bills to amend the budget
law and the budget shall be submitted simultaneously to the
Bundesrat and to the Bundestag; the Bundesrat shall be en-
titled to state its position on such bills within six weeks or,
in the case of amending bills, within three weeks.
"(4) The budget law may contain only such provisions as
apply to revenues and expenditures of the Federation and to
the period for which the budget law is being enacted. The
budget law may stipulate that certain provisions shall cease
to apply only upon the promulgation of the next budget law
or, in the event of an authorization pursuant to Article 115,
at a later date."
3. Article 112 shall obtain the following wording:
"Expenditures in excess of budgetary appropriations and
extrabudgetary expenditures shall require the consent of the
Federal Minister of Finance. Such consent may be given only
in the case of an unforeseen and compelling necessity. De-
tails may be regulated by federal legislation."
4. Article 113 shall obtain the following wording:
"(1) Laws increasing the budget expenditures proposed by
the Federal Government or involving, or likely in future to
cause new expenditures shall require the consent of the Fed-
eral Government. This shall also apply to laws involving,
or likely in future to cause, decreases in revenue. The Federal
Government may require the Bundestag to postpone its vote
on such bills. In this case the Federal Government shall state
its position to the Bundestag within six weeks.
"(2) Within four weeks after the Bundestag has adopted
such a bill, the Federal Government may require it to vote
on that bill again.
"(3) If the bill has become a law pursuant to Aiticle 78,
the Federal Government may withhold its consent only within
six weeks and only after having initiated the procedure pro-
vided for in the third and fourth sentences of paragraph (1)
or in paragraph (2) of the present Article. Upon the expiry
of this period such consent shall be deemed to have been


5. Article 114 shall obtain the following wording:
"(1) The Federal Minister of Finance shall, on behalf of
the Federal Government, submit annually to the Bundestag
and to the Bundesrat for their approval an account, covering
the preceding fiscal year, of all revenues and expenditures as
well as of property and debt.
"(2) The Federal Audit Office, the members of which shall
enjoy judicial independence, shall audit the account and
examine the management of the budget and the conduct of
business as to economy and correctness. The Federal Audit
Office shall submit an annual report directly to the Federal
Government as well as to the Bundestag and to the Bundesrat.
In all other respects the powers of the Federal Audit Office
shall be regulated by federal legislation."
6. Article 115 shall obtain the following wording:
"(1) The borrowing of funds and the assumption of
pledges. guarantees or other commitments, as a result -of which
expenditure may be incurred in future fiscal years, shall
require federal legislative authorization indicating, or permit-
ting computation of, the maximum amounts involved. Reve-
nue obtained by borrowing shall not exceed the total of
expenditures for investments provided for in the budget;
exceptions shall be permissible only to avert a disturbance of
the overall economic equilibrium. "etails shall be regulated
by federal legislation.
"(2) In respect of special funds of the Federation, excep-
tions from the provisions of paragraph (1) of this Article
may be authorized by federal legislation."
The present Law shall enter into force on the day following the
The foregoing Law shall be herewith promulgated.
Bonn, May 12, 1969.
The Federal President,
The Federal Chancellor,
The Federal Minister of Finances,
The Federal Minister of the Interior,
The Federal Minister of Justice,

REFORim LAW) OF MAY 12, 1969
The Federal Diet in concurrence with the Federal Council adopted
the following Law; Article 79 (a) of the Basic Law has been observed:


The, Basic Law for the Federal Republic of Germany of May 23,
1949 5 (Bundesgesetzblatt, p. 1) shall be amended and supplemented
as follows:
1. After Chapter VIII the following new Chapter VIIIa, including
Articles 91a and 91b, shall be inserted:

"VIIla. Joint Tasks
"Article 91a

"(1) The Federation shall participate in the discharge of the
following responsibilities of the Laender, provided that such re-
sponsibilities are important to society as a -whole and that federal
participation is necessary for the improvement of living condi-
tions (joint tasks):
"'1. Expansion and construction of institutions of higher
education including university clinics;
"2. Improvement of regional economic structures:
"3. Improvement of the agrarian structure and of coast
(~2) Joint tasks shall be defined in detail by federal legislation
requiring the consent of the Bundesrat. Such legislation should
include general principles governing the discharge of joint tasks.
"(3) Such legislation shall provide for the procedure and the
institutions required for joint overall planning. The inclusion of
a project in the overall planning shall require the consent of the
Land in which it is to be carried out.
"(4) In cases to which items 1 and 2 of paragraph (1) of this
Article apply, the Federation shall meet one half of the expendi-
ture in each Land. In cases to which item 3 of paragraph (1) of
this Article applies, the Federation shall meet -at least one half of
the expenditure, and such proportion shall be the same for all
the Laender. Details shall be regulated by legislation. Provision
of funds shall be Subjectto appropriation in the budgets of the
Federation and the Laender.
"(5) The Federal Government and the Bundesrat shall be in-
fomed about the execution of joint tasks, should they so demand.
*"Article 91b

"The Federation and the Laender may pursuant to agreements
co-operate in educational planning and in the promotion of insti-
tutions and projects of scientific research of supraregional im-
portance. The apportionment of costs shall be regulated in the
permanent agreements."
2. The following Article 104a shall be inserted as an introductory
Article to Chapter X:
English .text of the amended version of the Baslc Law taken from The Basic Law for
the Federal public of Germany (Wiesbaden, 1973).



"Article 104a

"(1) The Federation and the Laender shall meet separately
the expenditure resulting from the discharge of their respectiv-e
tasks in so far as this Basic Law does not provide otherwise.
"(2) 'Where the Laender act as agents of the Federation, the
Federation shall meet the resulting expenditure.
"(3) Federal laws to be executed by the Laender and involving
the disbursement of funds may provide that such funds shall be
contributed wholly or in part by the Federation. Where any such
law provides that the Federation shall meet one half of the ex-
penditure or more, the Laender shall execute it as agents of the
Federation. Where any such law provides that the Laender shall
meet one quarter of the expenditure or more, it shall require the
consent of the Bundesrat.
"(4) The Federation may grant the Laender financial assist-
ance for particularly important investments by the Laender or
communes or associations of communes, provided that such in-
vestments are necessary to avert a disturbance of the overall eco-
nomic equilibrium or to equalize differences of economic capacities
within the federal territory or to promote economic growth. De-
tails, especially concerning the kinds of investments to be pro-
moted, shall be regulated by federal legislation requiring the
consent of the Bundesrat, or by administrative arrangements
based on the federal budget.
"(5) The Federation and the Laender shall meet the admin-
istrative expenditure incurred by their respective authorities and
shall be responsible to each other for ensuring proper admin-
istration. Details shall be regulated by a federal law requiring the
consent of the Bundesrat."
3. Article 105 shall be amended as follows:
(a) Paragraph (2) shall obtain the following wording:
"(2) The Federation shall have concurrent power to legis-
late on all other taxes the revenue from which accrues to it
wholly or in part or where the conditions provided for in
paragraph (2) of Article 72 apply."
(b) After paragraph (2) the following paragraph (2a) shall
be inserted:
"(2a) The Laender shall have power to legislate on local
excise taxes as long and in so far as they are not identical
with taxes imposed by federal legislation."
4. Article 106 shall obtain the following wording:
"Article 106
"(1) The yield of fiscal monopolies and the revenue from the
following taxes shall accrue to the Federation:
"1. Customs duties,
"2. Excise taxes insofar as they do not accrue to the
Laender pursuant to paragraph (2) of this Article, or jointly
to the Federation and the Laender in accordance with para-

graph (3) of this Article, or to the communes in accordance
with paragraph (6) of this Article,
"3. The road freight tax,
"4. The capital transfer taxes, the insurance tax and the
tax on drafts and bills of exchange,
"5. Non-recurrent levies on property, and contributions
imposed for the purpose of implementing the equalization of
burdens legislation,
"6. Income and corporation surtaxes,
"7. Charges imposed within the framework of the European
"(2) Revenue from the following taxes shall accrue to the
"1. Property (net worth) tax,
"2. Inheritance tax,
"3. Motor-vehicle tax,
"4. Such taxes on transactions as do not accrue to the
Federation pursuant to paragraph (1) of this Article or
jointly to the Federation and the Laender pursuant to para-
graph (3) of this Article,
"5. Beer tax,
"6. Taxes on gambling establishments.
"(3) Revenue from income taxes, corporation taxes and turn-
over taxes shall accrue jointly to the Federation and the Laender
(joint taxes) to the extent that the revenue from income tax is
not allocated to the communes pursuant to paragraph (5) of this
Article. The Federation and the Laender shall share equally the
revenues from income taxes and corporation taxes. The respective
shares of the Federation and the Laender in the revenue from
turnover tax shall be determined by federal legislation requiring
the consent of the Bundesrat. Such determination shall be based
on the following principles:
"1. The Federation and the Laender shall have an equal
claim to coverage from current revenues of their respective
necessary expenditures. The extent of such expenditures shall
be determined within a system of pluri-annual financial
"2. The coverage requirements of the Federation and of
the Laender shall be co-ordinated in such a way that a fair
balance is struck, any overburdening of taxpayers Precluded.
and uniformity of living standards in the federal territory
"(4) The respective shares of the Federation and the Laender
in the revenue from turnover tax shall be apportioned anew when-
ever the relation of revenues to expenditures in the Federation
develops substantially differently from that of the Laender. IVhere
federal legislation imposes additional expenditures on. or with-
draws revenue from, the Laender. the additional burden may be
compensated by federal grants under federal laws requiring the
consent of the Bundesrat, provided such additional burden is lim-
ited to a short period. Such laws shall lay down the principles for
calculating such grants and distributing them among the Laender.


"(5) A share of the revenue from income tax shallaccrue to
the communes, to be passed on by the Laender to their communes
on the basis of income taxes paid by the inhabitants of the latter.
Details shall be regulated by a federal law requiring the consent
of the Bundesrat. Such law may provide that communes shall
assess communal percentages of the communal share.
(6) Revenue from taxes on real property and businesses
shall accrue to the communes; revenue from local excise taxes
shall accrue to the communes or, as may be provided for b
Land legislation, to associations of communes. Communes shal
be authorized to assess the communal percentages of taxes on
real property and businesses within the framework of existing
laws. Where there are no communes in a Land, re-venue from
taxes on real property and businesses as well as from local excise
taxes shall accrue to the Land. The Federation and the Laender
may participate, by assessing an impact, in the revenue from the
trade tax. Details regarding such impost shall be regulated by a
federal law requiring the consent of the Bundesrat. Within the
framework of Land legislation, taxes on real property and busi-
nesses as well as the communes' share of revenue from income
tax may be taken as a basis for calculating the amount of such
"(7) An overall percentage, to be determined by Land legisla-
tion, of the Land share of total 'revenue from joint taxes shall
accrue to the communes and associations of communes. In all
other respects Land legislation shall determine whether and to
what extent revenue from Land taxes shall accrue to communes
and associations of communes.
"(8) If in individual Laender or communes or associations
of communes the Federation causes special facilities to be estab-
lished which directly result in an increase of expenditure or a
loss of revenue (special burden) to these Laender or communes
or associations of communes, the Federation shall grant the
necessary compensation, if and in so far as such Laender or com-
munes or associations of communes cannot reasonably be ex-
pected to bear such special burden. In granting such compensa-
tion. due account shall be taken of third-party indemnities and
financial benefits accruing to the Laender or communes or asso-
ciations of communes concerned as a result Of the institution of
such facilities.
"(9) For the purpose of this Article; revenues and expendi-
hires of communes and associations of communes shall be deemed
to be Land revenu es and expenditures.
5. Article 107 shall obtain the following wording:
"Article 107
"(1) Revenue from Land taxes and the Land share of. revenue
from income and corporation taxes shall accrue to the individual
Laender to the extent that such taxes are collected by revenue
authorities within their respective territories (local revenue).
Federal legislation requiring the consent of the Bundesrat may
provide in detail for the delimitation as well as the manner and

scope of allotment of local revenue from corporation and wage
taxes. Legislation may also provide for the delimitation and
allotment of local revenue from other taxes. The Land share of
revenue from the turnover tax shall accrue to the individual
* Laender on a per-capita basis; federal legislation requiring the
consent of the Bundesrat may provide for supplemental shares
not exceeding one quarter of a Land share to be granted to
*Laender whose per-capita revenue from Land taxes and from
the income and corporation taxes is below the average of all the
Lender combined.
"(2) Federal legislation shall ensure a reasonable equalization
between financially strong and financially weak Laender, due
account being taken of the financial capacity and financial re-
quirements of communes and associations of communes, Such
legislation shall specify the conditions governing equalization
claims of Laender entitled to equalization payments and equali-
zation liabilities of Laender owing equalization payments as well
as the criteria for determining the amounts of equalization pay-
ments. Such legislation may also provide for grants to be made
by the Federation from federal funds to financially weak Laender
in order to complement the coverage of their general financial
requirements (complemental grants)."
6. Article 108 shall obtain the following wording:

"Article 108

"(1) Customs duties, fiscal monopolies, excise taxes subject to
federal legislation, including the excise tax on imports, and
charges imposed within the framework of the European Com-
munities shall be administered by federal revenue authorities.
The organization of these authorities shall be regulated by fed-
eral legislation. The heads of authorities at the intermediate level
shall be appointed in consultation with the respective Land gov-
"(2).All other taxes shall be administered by Land revenue
authorities. The organization of these authorities and the uniform
training of their civil servants may be regulated by federal legis-
lation requiring the consent of the Bundesrat. The heads of au-
thorities at the intermediate level shall be appointed in agree-
ment with the Federal Government.
"(3) To the extent that taxes accruing wholly or in part to
the Federation are administered by Land revenue authorities,
those, authorities shall act as agents of the Federation. Para-
graphs (3) and (4) of Article 85 shall apply, the Federal Min-
ister of Finance being, however, substituted for the Federal
"(4) Tn respect of the administration of taxes, federal legisla-
tion requiring the consent of the Bundesrat may provide for
collaboration between federal and Land revenue authorities, or
in the case of taxes under paragraph (1) of this Article for their
administration by Land revenue authorities, or in the case of other
taxes for their administration by federal revenue authorities, if


and to the extent that the execution of tax laws is substantially
improved or facilitated thereby. As regards taxes the revenue
from which accrues exclusively to communes or associations of
communes, their administration may wholly or in part be trans-
ferred by Laender from the appropriate Land revenue authorities
to communes or associations of communes.
"(5) The procedure to be applied by federal revenue authorities
shall be laid down by federal legislation. The procedure to be
applied by Land revenue authorities or, as envisaged in the sec-
ond sentence of paragraph (4) of this Article, by communes or
associations of communes, may be laid down by federal legislation
requiring the consent of the Bundesrat.
"(6) The jurisdiction of fiscal courts shall be uniformly regu-
lated by federal legislation.
"(7) The Federal Government may issue pertinent general ad-
ministrative rules which, to the extent that administration is in-
cumbent upon Land revenue authorities or communes or associa-
tions of communes, shall require the consent of the Bundesrat."
7. Article 115c(3) shall obtain the following wording:
"(3) Federal legislation to be applicable upon the occurrence of
a state of defence to the extent required for averting an existing
or directly imminent attack, may, subject to the consent of the
Bundesrat, regulate the administration and the fiscal system of the
Federation and the Laender in divergence from Sections VIII,
VIlla and X, provided that the viability of the Laender com-
munes and associations of communes is safeguarded, particularly
in fiscal matters."
8. Article 115k(3) shall obtain the following wording:
"(3) Laws containing provisions that diverge from Articles 91a,
91b, 104a, 106 and 107, shall apply no longer than the end of the
second fiscal year following upon the termination of the state of
defence. After such termination they may, With the consent of the
Bundesrat, be amended by federal leslaion so as to lead up to
the settlement provided for in Sections VIIIa and X."
The present Law shall enter into force on January 1, 1970.
The foregoing Law herewith shall be promulgated.
Bonn, May 12,1969.

The Federal President,
The Federal Chanellor,
The Federal Minister of Finance,
The Federal Mister of the Interior,
The Federal Minister of Jwutice,


STRUcTuRE" Oil OCFF o 6, 1969
The Federal Diet in concurrence with the Federal Council adopted
the following Law:
Joint Task
(1) The following measures shall be taken as a joint task, in the
meaning of Article 91a (1) of the Basic Law to improve the regional
economic structure:
1. The promotion of the industrial economy through the estab-
lishment, extension, reorganization, or fundamental rationaliza-
tion of industrial establishments;
2. Promotion of the extension of the infrastructure, insofar as
it is required for the development of the industrial economy,
through the-
(a) Opening up of industrial tracts of land in connection
with measures under No. 1;
(b) Extension of traffic communications, energy and water
supply installations, and sewage and waste disposal plants, as
well as tourist traffic establishments;
(c) Establishment or extension of educational, training,
and retraining institutions, insofar as a direct correlation ex-
ists with the requirement of the regional economy for a trained
work force.
(2) The promotion measures listed in paragraph 1 shall be imple-
mented in areas-
1. In which the economic strength is significantly below the
federal average, or threatens to sink below that, or
2. In which branches of industry are predominant, which are
affected or threatened by economic changes that have caused nega-
tive repercussions to the area to a significant extent, or are pre-
dicted to do so.
(3) Individual infrastructural measures also shall be promoted
outside the aforementioned areas if such are in direct connection with
promoted projects within a neighboring promotion area.
General Prineiples
(1) The promotion of measures described in Section 1(1) must
conform with the principles of the general economic policy and with
the goals and requirements of the regional planning and the planning
of the laender. It shall take into consideration the all-German concerns
and the requirements of the European Communities. The promotion
shall be concentrated on geographic and subject category focal points.
It shall be coordinated with other public development projects.
(2) Industrial establishments shall be promoted under Section 1
(1)- 1 only with start-up and adjustment aids, and only if it can be
expected that they will be able to stand up in competition. Recipients

of measures described in Section 1 (1) 2 to extend the infrastructure
shall be especially the communities and associations of communities;
measures of the Federation and the laender, as well as of natural per-
sons and legal entities which are aimed at profit making, shall not
be promoted.
(3) The second half of the second sentence in paragraph 2 shall
not apply to community tasks which are carried out in the laender of
Berlin and Hamburg.
1 (4) Fiscal assistance shall be granted only in case of a proper par-
ticipation of the recipient.
Joint Master Plan
(1) A joint master plan for the fulfillment of the joint tasks shall
be set up.
(2) The master plan shall be set up for the period of fiscal plan-
ning: each year shall be examined according to subject category, ad-
justed to developments, and continued accordingly. The fiscal plans
of the Federation and the laender encompassing several years shall
be taken into consideration.


Content of the Master Plan
In the master plan:
1. The areas according to Section 1 (2) shall be defined;
2. The goals which should be attained in these areas shall be
3. The measures under Section 1 (1) shall be specified sepa-
rately, according to fiscal years and laenders, as shall be the funds
to be allotted in the following year by the Federation and the
laender to fulfill the joint tasks, and the foreseeable funds for the
following years of the planning period;
4. Conditions, types, and urgency of promotion in case of the
different measures under Section 1 (1) shall be established.
Planning Board
(1) The Federal Government and the governments of the laender
shall set up a planning board to establish the master plan. Members
of it are the Federal Minister for the Economy as chairman, as well
as the Federal Minister of Finances and one minister (senator) from
each land; each member may have himself represented. The number
of votes of the Federation shall be equal to the number of votes of all
the laender. Each land shall have one vote.
(2) The planning board shall make decisions by three-fourths of
the votes.
(3) The planning board shall make its own rules*of procedure.



Repor [of Measre] for [Inclusion in] the aster Plan
(1) The laender shall recommend to the F al Minister for the
Economy the measures, in the of Section 1 (1), planned by them
for inclusion in the master plan no later than February I of each calen-
dar year. Such reporting shall imply approval by the land according
to Article 91a (3) 2 of the Basic Law. The approval may be rescinded
until the passing of the resolution on the master plan.
(2) Such reporting shall include all data necessary for inclusion
in themasterplanaccordingtoSection5andanexpl tion of the
(3) The Federal Minister for the E shall submit to the plan-
ning board the reports of the laender and his own recommendations
for passing the resolution.
(4) Paragraphs 1 to 3 shall apply accordingly to reporting of
amendments to the master plan.

Procedure After the Resolution on the Master Plan
The planning board shall transmit the master plan to the Federal
Government and the governments of the laender. The Federal Gov-
e rnment and the governments of the laender shall include the amounts
required to carry out the master plan in the next year in their drafts
of thebuges

Implementation of the Master Plan
(1) The implementation of the master plan shall be the duty of the
(2) The government of the laender shall, upon request, inform the
Federal Government and the Federal Council an the implementation
of the master plan and the general situation of the joint task.


(1) The Federation, subject to the provisions of Article 91a (4) of
the Basic Law, shallrrse each land, on the bas of a counts, one-
half of the expenditures incurred by the land by virtue of the master
plan for the projects promoted in the master plan.
(2) The Federation shall make payments to the land up to
the fo size of the amount to be reimbursed under paragraph 1,
according to the actual status of the measure and the available budget
funds. To lish the requirements for the fund and the status of the
measure, the laender shall inform the Federal Minister for the Econ-
omy on the size of the funds spent, as well as the status and the fore-
seeable development of the proect
73-791--76 -6


Repayments of and Interest on Federal Funds
(1) Amounts which are payable by grant recipients for the dis-
charge of and interest on loans received, or for compensation for reim-
bursable losses on the basis of accepted guarantees, shall be paid in
installments by the land.
(2) The Federation may demand repayment of allotted Federal
funds from the land if the established conditions are not totally or
partially fulfilled.
(.3) In case of non-compliance with the conditions by the grant
recipient, the land shall demand the repayment of the funds in the size
of the federal participation and shall pay the withheld amounts to the
(4) Amounts payableunder the previous paragraphs to the Federa-
tion by the land shall carry an interest which is 2% higher than the
interest rate of the German Federal Bank for public credits, in cases
coming under paragraph 2 beginning with the payment of federal
funds, and in the cases coming under paragraphs 1 and 3 from the
beginning of the second month after the receipt of the amount by the
Transitory Rules
Until the first master plan enters into force under Section 6, action
may be taken on the basis of the principles hitherto applicable, but no
longer than up to the end of the second calendar year following the
effective date of the present law.
Berlin Clause
The present law, by virtue of Section 13 (1) of the Third Transitory
Law of January 4, 1952 (Bundesgesetzblatt I, p. 1), shall apply also,
in the land of Berlin.
Entering Into Force
The present Law shall enter into force on January 1, 1970.
The present Law shall be herewith promulgated.
Bonn, October 6, 1969.
The Federal President,
The Federal Chancellor,
The Federal Minister for the Economy,
The Federal Minister of Finance,


Law for the Promotion of Stability and Growth of the Economy
The Law for the Promotion of Stability and Growth of the Econ-
omy of June 8, 1967 (Bundesge8etzblatt I, p. 582; 1974, I, p. 796, as
amended by the Fiscal Adjustment Law of August 30, 1971 (Bundes-
gesetzblatt I, p. 1426), shall be amended as follows:
1. In Section 18, the following paragraph (3) shall be inserted:
"(3) The Council of Cyclical Economy shall create a spe-
cial committee for the credit matters of public establishments,
which shall deliberate under the chairmanship of the Fed-
eral Minister of Finances in accordance with a rules of pro-
cedure issued by him." The hitherto existing pargraph (3)
shall become paragraph (4).
2. In Section 22 (1), the words "the Council of Cyclical Econ-
omy (Sec. 18)" shall be replaced by the words "Special Commit-
tee of the Council of Cyclical Economy (Sec. 18 (3))..".
3. In Sections 22 (2) and (3), the words "Federal Minister for
the Economy" and the words "Council of Cyclical Economy"
shall be replaced by the words "Federal Minister of Finances"
and "Special Committee of the Council of Cyclical Economy"
4. In the first sentence of Section 25, the words "Federal Min-
ister for the Economy" shall be replaced by the words "Federal
Minister of Finances."
The Constitutional rights of the Federal Council have been observed.
The foregoing Law herewith shall be promulgated.
Bonn, March 18, 1975.
The Federal President,
The Acting Federal Chancellor,
The Federal Minister for the Interior,
The Federal Minister of Justice,



Reorganization of the Econordc Committee
ART. 1. There shall be instituted as a part of the Government an
Interministerial Economic Committee charged with proposing to the
Government all measures concerning general economic affairs, the
adoption of a national plan and the general directives of economic
negotiations with foreign governments.
ART. 2. The Economic Committee shall be presided over by the Presi-
dent of the Provisional Government of the French Republic. It shall
consist of the following members:
The Minister of the National Economy: Vice President.
The Minister of Industrial Production.
The Minister of Agriculture.
The Minister of Food Supply.
The Minister of Foreign Affairs.
The Minister of Public Works and Transportation.
The Minister of Labor and Social Security.
The Minister of the Colonies.
The Minister of Finance.
The Minister Charged with Reconstruction and Urban Plan-
In addition, any minister can be called upon to sit with the Economic
Committee in an advisory capacity for any question of interest to his
The Secretary-General of the Government shall assist at the meet-
ings in an advisory capacity.
ART. 3. The Secretary-General of the Economic Committee shall be
supported by an official designated by decree, rendered upon the rec-
ommendation of the Minister of the National Economy.

Powers of the Minister of the National Economy
ART. 4. Within the framework of general directives of the Govern-
ment and the Economic Committee, the Minister of the National
1 French translation by Edmund C. Jann, Chief, and Richard Greenfield, Legal Processing
Assistant, European Law.Division, Law Library, Library of Congress.
2Journal officiel [official law gazette of France, hereafter cited as J.O.], December 7,
1944, v. 1724.


Economy shall be charged with the management of-the overall direc-
tion of economic affairs of the Government, with the preparation of
the Plan, and with the supervision of its execution.
To this end, he shall direct and supervise the actions of the min-
isters charged with industrial production, agriculture, food supply
and reconstruction and urban planning. He shall coordinate the actions
of these departments, as well as those of all other ministers in the
economic sphere.
ART. 5. A decree passed in the Council of Ministers shall establish
the composition of the Bureau of the Plan andof the Superior Council
of the Plan which shall be charged, as part of the Ministry of the Na-
tional Economy, with all works concerned with the planning of the
French economy within the policy framework decree by the Govern-
ment and by the Economic Committee.
ART. 6. All ordinances, decrees, orders, or decisions likely to affect
the overall economic policy of the Government shall be subject to the
countersignature of the Minister of the National Economy, especially
those concerning industrial, agricultural, or construction equipment.
The general policy of investments and the distribution of credit, in
particular the authorizations for the employment of such reserves of
companies as are under their control, the issue or quotation on the
stock exchange of stocks and shares, and the allocation of subsidies or
Treasury loans to the organizations or enterprises of an economic
The general distribution of raw materials and products.
Domestic and foreign commercial transactions.
Monetary policy and the establishment of rates of exchange.
The policy and establishment of prices.
Transportation policy.
The policy of rentals and low priced housing.
Economic conditions of employment of the work force.
Demographic [Population] policy.
The general level and policy of salaries.
The professional organization of the economy.
Structural reforms in the organization of the economy.
Formation of the frameworks.
The preceding provisions shall not be concerned with the imple.
menting measures taken within the framework of laws and regulations
which have already received the approval of the Government or of the
Ministry of the National Economy.
The ordinances concerning industrial production, agriculture, food
supply, reconstruction, and urban planning shall be Jointly counter-
signed by the appropriate ministers and by the Minister of the
National Economy.
ART. 7. The Minister of the National Economy shall centralize and
coordinate the preparation of international economic negotiations
which shall be conducted according to the plans established by him.
He shall assist the Secretary of the Commission on Imports.
Thp Minister of Foreign 'Affairs, shall appoint, in agreement with
the Minister of the National Economy, the delegations charged with
negotiating all economic and commercial accords.
The Minister of the National Economy shall be represented at all
financial and monetary negotiations conducted by the Minister of Fi-
nance. The latter shall be represented at economic negotiations.


A r. 8. The Minister of the National Economy shall be charged with
the preparation of the Program for National Outfitting and with the
control of its execution.
To this end, he can request that public administrations and associa-
tions place under study all questions pertinent to national outfitting or
that they update earlier studies.
ART. 9. The oversight and control of the offices, public establish-
ments, and all other organizations of an economic nature, shall be ex-
ercised by the Minister of the National Economy under the conditions
established by the Ordinance of November 23, 1944.
ART. 10. The Minister of the National Economy shall initiate the
creation of all interministerial commissions whose creation shall be
necessary in order to coordinate the economic activities of various min-
istries, notably those of the Ministers of Industrial Production, Food
Supply, and Reconstruction and Urban Planning. The appropriate
minister shall designate the officials charged with representing him
before these commissions.
ART. 11. Article 1, 1, of the Act known as the law of October 21,
1940, provisionally remaining in force, shall be modified by the follow-
ing provision: "the list of these products can be modified by decree
rendered upon a motion of-the Minister of the National Economy."

Organization of the Ministry of the National Economy
ART. 12. The decisions which deal with a policy orientation shall be
made within the Ministry of the National Economy by the councils
and committees wherein both the representatives of the appropriate
ministries and the general interests of the nation play a role.
The preparation and the supervision of the execution of the Plan
devolve on the Superior Council of the Plan provided for in Article
5 above.
The methods of execution of the decisions of the Superior Council
of the Plan shall be specified and followed by the specialized organiza-
tions whose composition, established by decree, shall conform to the
same principles.
These organizations shall function as specialized sections of the
Superior Council of the Plan and shall be attached to each of the
implementing directorates.
They shall be named respectively as follows:
Investment Committee (attached to the Directorates of Na-
tional Outfitting and Economic Coordination).
Central Committee on Prices (attached to the Directorate of
Central Committee on Distribution (attached to the Directorate
of Distribution).
Committee on Economic Agreements and, during the duration
of hostilities, the Supply Committee(attached to the Directorate
of Foreign !Economic Relations, replacing the Commission on


ART. 13. [The following] shall be reattached to the Ministry of the
National Economy:
All services subordinate to:
The Secretary-General for Economic Questions (exclud-
ing the Directorate of Insurance and the Bureau of Alcohol)
and the General Directorate of the National Statistics
The General Delegation on National Outfitting.
The Commission on Imports and the French Mission on
The Import-Export Service.
The Economic Studies Service of the Merchant Marine.
And the following directorates and services of the Central Section
of the Office of Distribution of Industrial Products:
The General Distributor.
The Directorate of General Inspection.
The Directorate of Technical Services.
By decrees countersigned by the Minister of the National Economy
and the appropriate minister, all or part of the documentation,
statistical, and general studies services shall be reattached to the
Minister of the National Economy, especially:
The Economic Studies Service of the Interprofessional Information
Center, the Directorate of Statistics, and the industrial documenta-
tion of the OCRPI's Economic Documentation Service on Direct
ART. 14. Independently of the cabinets of the ministries to which
they are attached:
[i.e.:] The Bureau of the Cabinet; [and] The Directorate of
Administrative Services,
the Ministry of the National Economy shall include the following
Directorates and Services:
1. The Directorates of the Plan and of Documentation, i.e.:
The Directorate of the Plan, together with the Bureau of
the Plandand the Services of the Plan.
The Directorate of Documentation and Economic Studies.
2. The Directorates of Execution, i.e.:
The Directorate of Economic Coordination.
The Directorate of National Equipment.
The Directorate of Prices.
The Directorate of Distribution.
The Directorate of Foreign Economic Relations.
3. The General Directorate of Economic Supervision.
4. The subordinate services.
ART. 15. The General Directorate of Economic Supervision shall
resume the powers granted to the General Directorate of Price Control
by legislation in force on the control of prices, supplies, and rationing
of industrial products.
In addition, it [the Directorate] shall be charged with directing the
economic activities of the aggregate of services which shall participate
in economic supervision and policing.


ART. 16. The following services shall be attached to the Central
Administration of the Minister of the National Economy:
To the Directorate of Documentationand Economic Studies,
the National Record Service.
To the Directorate of Economic Coordination, the Commis-
sarht of Fatty Subsances.
To the Directorate of Foreign Relations:
The Central Service of Import-Export Licensing.
The Commerial Expansion Service.
The Import-Export Service.
The State Credit Insurance Service.
ART. 17. Until December 31, 1944, decrees passed in the Council
of Ministers shall be empowered:
1. To carry out, insofar as they are needed, the credit transfers
necessary to the execution of Articles 13 to 16 above;
2. To merge or abolish the administrations, directorates, and
services enumerated in Article 13; to modify their structure, their
composition, or their title; to restore all or part of their servces
to the ministries to which they were formerly attached or to trans-
fer them to other ministries;
3. To establish the organization of directorates and services
enumerated in Articles 14 to 16 and to create any other organiza-
tions whose existence might be necessary to the operation of the
Ministry of the National Ecoomy.
ART. 18. In order to fill the positions created by the above-men-
tioned decrees, the Minister of the National Economy shall he au-
thorized to appoint, on temporary assignment, even those employee'
not belonging to his administration.
ART. 19. Hereby abrogated are:
The Decree of April 24, 1944, Concerning the Creation of an
Economic Committee.
All prior laws and regulations which sought to create inter-
ministerial economic coordinating bodies
And more generally, all provisions contrary to those of the
present Ordinance.
Herebv expressly considered void are:
The act known as the Law of February 8,1944, Concerning
Reorganization of the Economic Control.
The act known as the Law of February 8, 1944, Concerning
the Employment of Price Control Personnel.
However, the [administrative] effects resulting from the imple-
mentation of the Law of Februarv 8, 1944, prior to the entrance into
force of the present Ordinance shall remain valid.
ART. 20. The present Ordinance shall be applicable in Algeria.
The conditions of its application to the 'territories within the juris-
diction of the Minister of the Colonies and of those [administrative]
bodies of Metropolitan France, involved in the colonial economies shall
be established by decrees rendered upon the recommendation of the
Ministers of the Colonies and the National Economy.
ART. 21. The present Ordinance shall be published in the Journal
officiel of the French Republic and executed as law.



ART. 1. Within the prescribed time of six months from the pub-
lication date of the present Decree, there shall be established the first
pensive plan for the modernization and economic outfitting
of Metropolitan France and the Overseas Territories.
In particular, this Plan shall have as its object:
1. To increase the production of Metropolitan France and the
Overseas Territories and their world trade, particularly in the
areas where their position is the most favorable.
2. To raise the work output to the level of those countries where
it is highest;
3. To ensure full employment of the work force;
4. To raise the standard of living of the population and to
ameliorate living conditions and the quality of life [a vie
The Plan shall extend to the reconstruction of public and private
machinery and equipment damaged or destroyed as a consequence
of war.
AR. 2. There shall be heated a Planning Council within the Presi-
dency of the Government which shall propose to the Government the
Plan and the means of assuring its execution.
This Council shall be composed of the following:
The President of the Provisional Government of the Republic:
The Minister of the National Economy: Vice President.
The Minister of Foreign Affairs.
The Minister of Munitions.
The Minister of Finance.
The Minister of Agriculture and Food Supplies.
The Minister of Industrial Production.
The Minister of Public Works and Transportation.
The Minister of Labor.
The Minister of the Colonies.
The Minister of Reconstruction and Urban Planning.
The Commission-Geeral of the Plan.
Not less than twelve persons nor more than fourteen shall be chosen
by reason of their [special] competence and shall be named by Presi-
dential decree upon the recommendation of the Minister of the Na-
tional Economy.
The internal regulations of the Planning Council shall be established
by Presidential decree.
_AIT. 3. The departments of the Commissioner-General's Office shall
be responsible to a Commissioner- General named by decree.
The Commissioner-(eneral shall be charged with the formulation
of proposals which shall be submitted for examination to the Planning
CounciL He shall be the permanent delegate of the President of the
2 3.0., January 4, 1946, p. 130.


Government attached to the ministerial departments, with jurisdic-
tion over anything which concerns the establishment of the Plan. The
Commissioner-General of the Plan shall be a member of the Economic
Committee, the Interministerial Committee on German and Austrian
Affairs, the National Economic Council, and the National Council
on Credit.
ART. 4. The Commissioner-General shall initiate any investigation
which he deems useful regarding [agencies of] public administration,
and with their cooperation, [any investigation] regarding professional
organizations of workers and employers, manufacturers and owners,
and all other organizations or persons that he shall deem advisable
to consult.
The [agencies] of public administration and organizations partici-
pating in the administration of a public service shall furnish him [the
Commissioner-General] with all the statistical information and other
elements of information requested.
The competent ministers shall give him their cooperation in accom-
plishing his mission, particularly as regards the establishment of a
comprehensive balance sheet, and shall furnish him with all the
production schedules already established for the different activities
of the national economy.
From the publication date of the present Decree, all the programs
affecting the economic activity of the country, especially those related
to production, to reconstruction, to munitions, to machinery, to foreign
commerce and to the appropriation of enemy goods by right of repara-
tion, prepared by the competent ministerial departments, shall be
communicated to the Commissioner-General. The Comissioner-General
shall be kept up-to-date on projects in the process of development.
ART. 5. The Commissioner-General of the Plan shall submit to the
President of the Government the decrees instituting the working and
coordinating committees, composed of high level officials belonging
to the ministries represented on the Planning Council, as well as [those
instituting] the modernization commissions, consisting of representa-
tives of the administration and of experts and representatives of trade
union and professional organizations.
ART. 6. During the formulative period of the Plan, the Minister of
the National Economy shall place at the disposition of the Com-
missioner-General, the Institute of Contingency [Planning], the Out-
fitting Service and the Case Studies Service of the National Center
of Economic Information. These organizations shall be held respon-
sible for applying all the directives and for carrying out the works
which shall be determined for them by the Commissioner-General of
the Plan. Nevertheless, they shall continue to be subordinate, from
an administrative and financial standpoint, to the Minister of the
National Economy.
ART. 7. The Commissioner-General's Office shall include, under the
authority of the Commissioner-General, those charged with detached
service, whose status is governed by paragraphs 2 and 3 of Article 5
of the Law of August 13,1936.
ART. 8. All provisions contrary to those of the present Decree are


AR. 9. The Minister of the National Economy, the Minister of
Munitions, the Minister of Finance, the Minister of Foreign Affairs,
the Minister of Agriculture and Food Supplies, the Minister of Indus-
trial Production, the Minister of Public Works and Transportation,
the Minister of Labor, the Minister of the Colonies, and the Minister
of Reconstruction and Urban Planning are charged, insofar as it
concerns him, with the execution of the present Decree which shall
be published in the Journal officiel of the French Republic.

DEcRE No. 46-384 OF MARCH 8, 1946, MOD=ING No. 46-2 OF
JANUARY 3, 1946'.
ART. 1. Article 2 (3rd par.) of Decree No. 46-2 of January 3, 1946,
shall be modified as follows:
"Not less than fifteen persons nor more than eighteen, chosen
by reason of their [special] competence and named by decree of
the President of the Government upon recommendation of the
Minister of the National Economy."
ART. 2. Article 2 (4th par.) shall be complemented as follows:
After: "The Minister of Reconstruction and Urban Planning"
"The Minister of Public Health and Population;
"The Minister of the Post Office, Telegraph and Telephone
[Services] ;
"The Under-Secretary of State to the National Economy."
ART. 3.Article 2 (4th par.) shall be complemented as follows:
"The Secretary-General of the Government, the Vice President
of the National Council on Credit, and the Secretary of the Inter-
ministerial Committee shall attend the meetings of the Council
in an advisory capacity."
Axcr. 4. Article 6 shall be complemented as follows:
Par. 2: "The nominating decrees shall be countersigned by the
Minister of the National Economy."
Air. 5. The President of the Provisional Government of the Re-
public shall be charged, etc. [see Art. 9 of Decree 46-2].

DEcREE No. 46-521 OF MARcH 27, 1946, MODIFYI-G DEcREE No. 46-2
OF JANUARY 3, 19465
ART. 1. Article 2 (4th par.) shall be complemented as follows:
"The Secretary-General of the Government, the Vice Presi-
dent of the National Council on Credit, the Secretary of the In-
terministerial Committee, and the Director-General of Economic
Affairs to the Minister of Foreign Affairs shall attend the meet-
ings in an advisory capacity."
ART. 2. The President of the Provisional Government shall be
charged, etc. [see Art. 9 of Decree 46-2].
'3.O., March 12, 1946, p. 2038.
5J.O., March 12, 1946, p. 2035.


DECRE No. 46-648 OF Amm 111 1946, MODIFYIiNG DwREor No. 463-2
OF JANUARY 3, 194611
ART. 1. Article 2 (2d par.) shall be complemented as follows:
After: "The Minister of Finances" add "The Minister of the
AiRT. 2. The Minister of the National Economy shall be charged, etc.
[see Art. 9 of Decree 46-2]..

DECREE No. 46-2009 oF SEPTEMBER 17, 1946, MoDrFnmG DECREE No.
46-2 OF JANUARY 3, 1946'y
Amr. 1. Article 2 (2d par.) of the Decree of January 3, 1946, shall
be complemented as follows:
After: "The Minister of Industrial Production" add: "The
Minister of National Education, The Minister of the Armies."
ART. 2. Article 2 (4th par.) of the Decree of January 3, 1946, shall
be complemented as follows:
[who] shall attend the Council [meetings] in an advisory
After: "The Secretary-General of the Government," add: "The
Chief of State Major-General of National Defense."
ART. 3. The Minister of the National Economy shall be charged,
etc. [see Art. 9 of Decree 46-2].

DCREE No. 50-410 OF ARCH 31 1950, COMC ERNING TE
ART. 1. There shall be constituted a Committee of Experts, named
by joint decree of the President of the Council and of the Minister
-of Finance and Economic Affairs, which shall be charged with carry-
ing out the following tasks:
1. To propose any modifications in setting up public accounts
and statistics likely to facilitate the establishment of economic
accounts and budgets of the nation;
2. To draw up by October 15 of each year, beginning with the
year 1950:
(a) The economic accounts of the nation for the past busi-
ness year just completed;
(b) The provisional accounts for the business year in
(c) The projected accounts for the coming business year.
3. To present a report on the nature and the meaning of the
results obtained.
ART. 2. The works referred to in Article 1 shall be submitted to a
Commission of the National Accounting Office whose president shall
63J.0.. April 12, 1946, p. 3063.
7 J.0., September 18, 1946, p. 8007.
6 J.O., April 6, 1950, p. 3731, J.O., April 7, 1950, p. 3789.


be designated by the President of the Council on a motion by the Min-
ister of Finance and Economic Affairs, and which shall include in
The Commissioner-General of the Plan;
The Governor of the Bank of France;
A Magistrate of the Court of Accounts designated by the First
President of the Court;
The Director-General of the National Institute of Statistics
and Economic Studies;
The Director of the Budget;
The Director of the Treasury;
The Director of Foreign Finances;
The Director of the Public Accounting Office;
The Diroctor-General of Prices and Economic Control;
The Director of Programs;
The Director of Foreign Economic Relations;
The Director of General, Departmental, and Communal Or-
The Director-General of Railroads and Transportation;
The Chief of the Studies and Documentation Service of the
Ministry of Agriculture;
The Director of Economic Affairs and of the Plan of the Min-
istry of Overseas France;
The Director-General of Social Security;
The Director of Labor;
The Director-General of Coordination of the Ministry of Re-
construction and Urban Planning.
The Committee of Experts, after examination by the Commission
as provided for in the present Article, shall submit its report to the
Interministerial Economic Committee which shall be charoed with the
preparation of its presentation to Congress.
ART. 3. The statistical elements of the work of the Committee of
Experts shall be centralized:
1. By the Bureau of Statistics of the Directorate of the Treas-
ury, operating in conjunction with the General Directorate of
Taxes, the Directorate of the Budget, the Directorate of Public
Accounting, and the Directorate of External Finances.
2. By the National Institute of Statistics and Economic Studies
operating in conjunction with the Directorate of Programs, the
offices of Foreign Economic Relations and the different economic
and technical ministries
The Committee of Experts shall be authorized to demand from
these administrations allnthe information and any specific studies that
it shall deem necessary. It shall seek the opinions of persons designated
because of their [special] competence and their previous studies in
matters of national revenue and economic accounting. It shall be able
to acquire assistance upon demand on a temporary basis and for tasks
determined by the members of the Council of State, the Court of
Accounting, the General Inspectorate of Finances, the General In-
spectorate of the National Economy, and civil administrators put at
its disposition by decision of the competent authority.


SART. 4. The Vice President of the Council, the Minister of the In-
terior, the Minister of Finance and Economic Affairs, the Minister of
Industry and Commerce, the Minister of Agriculture, the Minister of
Reconstruction and Urban Planning, the Minister of Public Works,
Transportation, and Tourism, the Minister of Overseas France, the
Minister of Labor and Social Security, the Secretary of State for
Finance (Economic Affairs) and the Secretary of State for Finance
and for Economic Affairs are charged, each insofar as it concerns him,
with the execution of the present Decree, which shall be published in
the Journal officiel of the French Republic.

ART. 1. There shall be created within the Central Administration of
Financial and Economic Affairs a Directorate of Forecasting.
ART. 2. The Directorate shall be charged:
1. With establishing the economic budgets, with participating
in the formulation of national accounts and with supporting the
Secretariat of the Commission on Economic Accounts and Budg-
ets of the Nation;
2. With studying the data and the results of governmental ac-
tion in the principal economic sectors;
3. With participating in the preparation of the Plan, partic-
ularly in its financial aspects;
4. With conducting or organizing, in conjunction with the Gen-
eral Commissariate of the Outfitting and Productivity Plan, fore-
casting studies on problems of economic and technical develop-
ment, particularly in the following areas:
Relations between technical progress and the development
of the economy.
Research on optimal economic structures.
Development of foreign economies.
5. With contributing to the definition and the perfection of
analysis techniques enabling [one] to calculate the cost, to meas-
ure the profitability, and to evaluate the direct and indirect eco-
nomic effects of a given operation.
ART. 3. The Forecasting Directorate shall be organized by sub-
directorates and by bureaus whose number and jurisdiction shall be
established by decree of the Minister of Finance and Economic Affairs.
In addition, it [the Directorate] shall include a section of applied
ART. 4. The Prime Minister, the Minister of State charged with Ad-
ministrative Reform, and the Minister of Finance and Economic Af-
fairs shall be charged with the execution of the present Decree, which
shall be published in the Journal officiel of the French Republic.

9 J.O., July 10, 1965, p. 5921.


ART. 1. For the purposes of this law: "Our Ministers" are: Our
Ministers of Economic Affairs, of Agriculture, Fisheries and Food
Supplies, of Traffic, of Public Works and Reconstruction, of Finances,
of Inland Affairs, of Foreign Affairs, of Overseas Territories, and of
Welfare Affairs.
ART. 2. 1. There shall be a Central Plan Bureau [Centraal Plan-
bureau], which comes under Our Minister of Economic Affairs.
2. At the head of the Bureau shall be a board of directors [directie],
consisting of a managing director [directeur] and two assistant direc-
tors [onder-directeuren], who shall be appointed, suspended, and fired
by Our Minister of Economic Affairs in consultation with the other
Ministers mentioned in Article 1.
ART. 3. 1. The Central Plan Bureau shall have the task of perform-
ing all activities concerning the preparation of a Central Economic
Plan, which shall be established by the Government at regular times
for the purpose of coordinating government policy in the economic,
social and financial fields, as well as giving advice on general questions
that may arise with respect to the realization of the plan.
2. The Central Economic Plan shall be a balanced structure of esti-
mates and guidelines concerning the Dutch economic system
3. The Central Economic Plan shall contain, among other things,
collections of figures concerning the future extent of production in
the broadest sense, [concerning] the future level and development of
the price level, [and] of the national income and its components, [con-
cerning] all other quantities [grootheden] important for a good co-
ordination of the economic, social, and financial policy.
ART. 4. 1. There shall be a Central Planning Commission whose mem-
bers, numbering at least fifteen and at the most twenty-five, shall be
appointed jointly by Our Ministers.
2. A representative of each of Our Ministers shall serve in this
3. Further, the Commission shall be composed of representatives
of other official [ambtelijke] organs and of persons who, on account of
their expertise [wetenschappelijke hoedanigheid] or their position
in trade and industry [bedrijfsleven], or in another field, may be
deemed able to judge the work of the Central Plan Bureau and to set
guidelines therefor.
1 Dutch translation by Joyce Darllek, Legal Specialist, European Law Division, Law
Library, Library of Congress.
S'taatablad 'an het Konin7crfJA; der Nederlanden [official law gazette of the Nether-


4. The member specified in the third paragraph shall be appointed
and fired by Our Minister of Economic Affairs, in consultation With
the other Ministers mentioned in Article 1.
5. Our Minister of Economic Affairs shall designate a member as
chairman of the Commission in consultation with the other Ministers
mentioned in Article 1.
6. The board of directors of the Central Plan Bureau shall be
entitled to attend the meetings of the Commission.
ART. 5. The Central Plan Commission shall advise Our Minister
of Economic Affairs or the board of directors of the Central Plan
Bureau concerning the activities of the Bureau.
AwT. 6. 1. Our Minister of Economic Affairs, in consultation with
those of Our Ministers whom it concerns, after havingiconsulted the
Central Plan Commission, may establish working committees to elabo-
rate parts of the Central Economic Plan.
2. A working committeeshall consist of:
a. One or more representatives of the Central Plan Bureau;
b. One or more representatives of those of Our Ministers whom
it concerns;
c. One or more representatives of trade and industry or other
parties interested in the part concerned.
3. The chairman and the other members of a working committee
shall be appointed and fired by Our Minister of Economic Affairs, in
consultation with those of Our Ministers whom it concerns.
ART. 7. The working committees shall advise and support the board
of directors of the Central Plan Bureau in elaborating the parts of the
Central Economic Plan.
ART. 8. This law shall go into effect the day after its promulgation.

ART. 1. There shall be a Provisional Scientific Council for Govern-
ment Policy, hereafter to be called the Council.
ART. 2. The Council shall have as its task:
a. To advise the Government [Regering] about the long-term
development of the society and sufficiently in advance to-
Signal bottlenecks in the long-term development;
Formulate problems with respect to major long-term
Indicate policy alternatives.
b. In connection therewith to develop an* integrated long-term
framework for the use of the Government in establishing priorities
and pursuing a coherent policy which is also justified for the
c. To make proposals with respect to activities performed in-
side as well as outside of the Government [Rijksoverheidl in the
field of projecting the future [toekomstonderzoekj and long-term
planning concerning:
The removal of structural shortcomings;
The promotion of certain research;
The improvement of communication and coordination.
8Staatsblad van het Koninkrijk der Nederlanden [official law gazette of the Netherlands].


A 3. 3.1. In the execution of its task, the Council shall rely also
on the results of research done by other institutions.
3.2. The Council may turn directly to government services and
public and private institutions to obtain the information it needs.
3.3. The Ministers shall ensure that the Council, insofar as such may
be useful for the performance of its task, is informed in time of the
projection of the uture, which is carried out under their responsibil-
ity, and of the results thereof as well as of policy hypotheses [beleids-
veronderstellingen] and long-term policy intentions.
AR. 4. 41. The Council may directly consult official [ambtelijkej
and non-offcial [niet-ambtelijke] experts.
4.2. The Council may organize committees. For the cooperation of
official experts it shall require the cooperation of Our Ministers
4.3. The Council in its field may maintain international contacts
Ainr. 5. The chairman and the members of the Council shall be
bound to secrecy in regard to all that has come to their knowledge
from the Government [van overheidswege] while performing their
task, insofar as that obligation follows from the nature of things or
was imposed explicitly by Our Ministers concerned.
Am.. 6. The Council may make a request to undertake certain studies
or to have them undertaken. This shall take place with the coopera-
tion of Our Ministers concerned, insofar as it concerns departments
and institutions functioning under their responsibility.
ART. 7. 7.1. The Council shall advise Our Prime Minister, the Minis-
terof General Affairs.
7.2. The Council may ask Our Prime Minister, the Minister of Gen-
eral Affairs, for joint consultation with the Council of Ministers re-
garding the Council's advice.
ART. 8. 8.1. The advice given by the Council shall, in principle, be
8.2. The Council shall publish its advice after assent from the Coun-
cil of Ministers.
ART. 9. 9.1. The Council shall consist of at least five members.
9.2. Our Prime Minister, the Minister of General Affairs, shall
appoint the chairman and the members of the Council in conformity
with the opinion of the Council of Ministers.
9.3. The chairman and the members shall be appointed for five
years, except when a separation is g anted sooner.
9.4. Whoever is appointed to fill an interim vacancy shall resign
at the same time that the one he replaced should have resigned.
AxT. 10. 10.1. The activities of the chairman of the Council shall
constitute a full-time job.
10.2. The other members of the Council shall make a considerable
amount of their worktime available to the Council.
ART. 11. 11.1. There are extraordinary members who may, on ac-
count of their function in the Government [Rijksoverheid], provide
the Council with advice.
11.2. The Council shall determine the way in which the extraor-
dinarymembers are involved in its activities.
11.3. The Council may make proposals with reference to the extraor-
dinary membership.


11.4. Our Prime Minister, the Minister of General.Affairs, shall
appoint the extraordinary members of the Council, in conformity
with the opinion of the Council of Ministers.
ART. 12. 12.1. The Council shall have a secretary [secretaris].
12.2. Our Prime Minister, the Minister of General Affairs, shall
appoint the secretary of the Council.
12.3. The Council shall have a bureau which, under the leadership
of the secretary, shall assist the Council in its activities.
12.4. The bureau shall be under the jurisdiction of the Department
of General Affairs.
ART. 13. The Council may set further regulations for its mode of
ART. 14. A separate amount shall be appropriated annually in the
budget of the Department of General Affairs for expenditures for
the benefit of the Council, including the bureau.
ART. 15. This decree shall go into effect the day after it is placed in
the Staatsblad and shall remain in effect for five years at the most.

The Social Economic Council (Sociaal-Economische Raad) is the
main advising organ of the government in the social welfare and eco-
nomic field. It also has an important place in industrial organization.
A translation of the first chapter of the Law Concerning Industrial
Organization follows. This chapter deals specifically with the Social
Economic Council and its tasks.
Concerning the Social Economic Council
Concerning Its Seat and Its Tasmk
ART. 1. 1. There shall be a Social Economic Council, hereafter called
the Council.
2. The Council shall have its seat at The Hague.
3. The Council shall be a legal person.
ART. 2. The Council, without prejudice to the advising function
entrusted to it in the fifth title of this chapter, shall have as its task
the promotion of activity in trade and industry serving the interests
of the Dutch population, as well as the protection of the interests of
industry and the persons connected with it.
Concerning the Composition and Organization
1. General Provisi
ART. 3. The Council shall have a chairman, an executive committee
[dagelijks bestuur], a secretary-general [algemeen secretaris], and,
&Staatsblad van hot Konikrijkder Nederlanden [official law gazette of the Netherlands].


when applying Article 19, one or more committees appointed from
among its members.
2. Concerning the Council
ART. 4. 1. The Council shall consist of at least thirty and no more
than forty-five members.
2. At least two-thirds of the members shall be appointed by the
organizations designated by Us of employers and of employees and
the others by Us. In Our judgment, only generally recognized central
and other representative organizations of employers and, in Our judg-
ment, generally recognized central organizations of employees shall
be considered for designation.
3. An alternate may be appointed at the same time for each member.
4. The same number of members shall be appointed by organizations
of employees as by organizations of employers.
5. We shall determine:
a. the number of members of the Council;
b. the number of members which each organization designated
by Us may appoint.
6. In a general administrative decree, regulations may be set on the
acceptance by the members and their alternates of their function.
7. The Council shall be heard, before a recommendation is made
to Us to designate an organization as specified in the second para-
graph, or to make a decision as specified in the fifth paragraph.
ARuT. 5. 1. Only Dutch subjects who at the same time are residents
of the Realm in Europe, have reached the age of thirty, are not
4.eprived of their eligibility in elections called under statutory pro-
visions, [and who have not been] excluded from the right to vote in
such elections may be member[s] or alternate member[s] of the
2. Those persons are precluded from membership who are deprived
of the right to exerciseoffices or certain offices, or certain professions
or functions.
ART. 6. 1. In a general administrative decree, regulations may be
-set concerning the incompatibility of [a person's] membership on
the Council with [hs] other activities. The Council shall be heard,
before a recommendation for such a measure is made to Us.
2. Within two months after the promulgation of a general admin-
istrative decree, as specified in the preceding paragraph, a proposal
is made to the States-General [Staten-Generaal] to ratify this
[general administrative decree] bya law. If the proposal is with-
drawn or is rejected by one of the Chambers of the States-General,
the general administrative decree shall be revoked immediately.
ART. 7. In a general administrative decree, regulations may be
given to ensure the compliance of what is determined in Article 5
and of the regulations set under Article 6. The Council shall be heard
before a proposal for such a general administrative decree is made
to Us.
ART. 8. 1. The members of the Council and their alternates shall
resign every two years at the same time, and may be reappointed
2. The members of the Council and their alternates may resign at
any time by a written notification to the chairman of the Council.
3. Whoever is appointed as a member or alternate member to flL


an interim vacancy shall resign at the [same] time at which the one
in whose place he was appointed was due to resign.
APRT. 9. The members of the Council and their alternates may re-
ceive compensation according to regulations to be set by the Council
in an ordinance. Such an ordinance shall require Our approval.
ART. 10. The members of the Council and their alternates shall be
bound to secrecy in regard to all business and trade secrets which
they learn in their capacity and, in addition, in regard to all [offr]
matters over which the Council or the chairman has imposed secrecy,
or of which they must understand the confidential nature.
3. Concerning the Chairman
ArT. 11. 1. The Chairman shall be appointed by Us from among
the members of the Council and may be suspended and fired by Us.
The Council shall be heard before a recommendation for appoint-
ment or dismissal is made to Us.
2. The chairman shall have two alternates who shall 'be appointed
by the Council from its membership and who may be suspended and
dismissed by this [Council].
3. The appointment of the alternating chairmen shall take place
so that one of them is appointed from each of the [following] groups:
members appointed by organizations of employer; me rs ap-
pointed by organizations of employees; and other members with the
exception of the group from which the chairman is appointed.
ART. 12. 1. The appointment of the chairman and the alternate chair-
men shall take place each time for two years at the most. They may
be reappointed immediately.
2. The chairman and the alternating chairmen may at all times
resign as such by a written notification to Us [or] the chairman
Axr. 13. Articles 9 and 10 shall be applicable accordingly with
respect to the chairman and the alternating chairman.
4. Coiwerning the Executive Committee
ART. 14. 1. Apart from what is determined in the following para-
graph, the Council shall appoint from among its members the members
of the executive committee.
2. The chairman of the Council shall be a member and chairman;
the alternating chairmen shall be members of the executive committee.
3. The executive committee shall be composed in such a way that the
different ideological social trends which are the basis of the orgarniza-
tions designated pursuant to Article 4 shall be represented in it.
Arr. 15. Articles 9 and 10 shall be applicable accordingly with
respect to the executive committee.
5. Concerning the &3oretariat
Ar. 16. 1. The Counil shall have a scretiriat. whi4h consists of a
secretary-general, one or more secretaries, and other personnel.
2. The secretary-general and the secretaries shall be employed and
may be. missed by the Council. The employment of the secretar-
general shall reouire Our approval.
3. The Council shall set regulations in an ordinance concerning em-
ployment and dismissal, as well as concerning the wages and the other
working conditions of the staff. Such an ordinance shall require the
approval of Our Ministers of Economic Aftairs and Welfare Affaim.


ART. 17. 1. The secretary-general and the secretaries may not conduct
an enterprise themselves nor be employed by a natural or legal person
who conducts an enterprise, nor perform any other function on behalf
of such a natural or legal person. By enterprise shall be also under-
stood a business which is not aimed at making a profit.
2. Further regulations may be set in a general administrative decree
concerningthe incompatibility of a function in the secretariat with
other activities.
3. Regulations may be set in a general administrative decree to
entire the compliance of what is determined in the first paragraph
and the regulations set pursuant to the second paragraph.
4. The Council shall be heard before a recommendation fora decree
as specified in the second and third paragraph[s] is made.
ART. 18. Article 10 shall be applicable accordingly with respect to
the personnel of the secretariat.
6. Concerning the Committees From Among the Membership of the
AR.r, 19. 1. The Council shal be entitled to establish committees
from its membership for certain subjects.
2. Articles 9 and 10 shall be applicable with respect to these com-
Concerning Procedure
ART. 20. The Council shall not meet if, according to the attendance
list, no more than half of the members serving are in attendance. After
a meeting has been called for twice, and if no more than half of the
members serving are in attendance, the next meeting called for shall
be he[ld irrespective of the number of members attending.
ART. 21. The members of the Council shall not be proceeded against
for what they have said in the meetings or for what they have sub-
mitted to it in writing.
ART. 22. The members of the Council vote without a mandate or
ART. 23. The members of the Council shall abstain from voting on
mT ters which personally concern them, their spouses, or their rela-
tives by blood or by marriage to the third degree.
APT. 24. 1. Voting on issues shall be done orally and by rollcall;
voting on persons shall be done by sealed and unsigned ballots.
2. if, when deciding an issue, none of the members asks for a vote,
the proposal shall be deemed to have been accepted.
ART. 25. 1. A vote shall be void if no more than half of the number
of members serving, who must not abstain from voting, have partic-
ipated in the voting.
2. Members who have submitted blank ballots in applying this
Article are deemed to have participated in the vote in case of a vote
on persons.
3. In case of a void vote, a second vote shall take place in the next
meeting. This one shall be valid, irrespective of the number of mem-
bers participating in it.
4. A vote held in a meeting, as specified in the second sentence of
Article 20, is valid, irrespective of the number of members participat-
ing in the vote.


ART. 26. 1. Every member may cast one vote.
2. In order to pass an ordinance, a majority of two-thirds shall be
required; in order to adopt another resolution, the absolute majority
of the votes cast shall be required. Blank votes shall be deemed not to
have been cast.
ART. 27. 1. In case of a tie in a plenary meeting, the proposal shall
be deemed not to have been accepted if it concerns issues, and, if it
concerns persons, it shall be decided by lot.
2. In case of a tie in a meeting at which not everyone is present,
the decision making shall be postponed to a subsequent. meeting, in
which the deliberations may be reopened. If the votes tie again, the
previous paragraph shall be applicable accordingly.
ART. 28. 1. Our Ministers to be appointed by Us shall be authorized
to attend the meetings to be held by the Council and the committees
from among its members, and to be assisted by one or more persons to
be designated by them, or to be represented by one or more of such
persons. They, as well as their representatives, shall have an advisory
vote in these meetings.
2. Our Ministers, specified in the first paragraph shall be notified
in time of the meetings as specified in that paragraph.
ART. 29. Articles 20 through 27 shall be applicable accordingly with
respect to the executive committee.
ART. 30. The Council shall ask the advice which it deems necessary
to fulfill its task.
ART. 31. The Council in an ordinance may set further regulations
concerning its procedure.
Concerning the Fulfilment of the Ta8k
ART. 32. 1. The Council shall pass the ordinances which it deems
necessary for the fulfillment of the task described in Article 2, with
respect to the subjects whose regulation and further regulation is
entrusted to it.
2. Infringements of what is regulated in or under these ordinances
may be indicated as criminal acts.
3. Ordinances in which an indication is made as specified in the
preceding paragraph shall require Our approval.
ART. 33. The law shall determine for whom those ordinances speci-
fied in Article 32, first paragraph, may contain binding regulations.
ART. 34. So long as an ordinance as specified in Article 32, first
paragraph, has not been annulled, it shall be deemed to regulate or
further regulate a subject as specified in that paragraph.
ART. 35. The Council, in regard to the fulfillment of its task de-
scribed in Article 2, may delegate its powers-with the exception of
the power to make ordinances and the power to determine the amount
of receipts and expenditures under Article 52, third paragraph-
to the chairman, the executive committee, the secretary-general or &
committee from among its members, while setting such rules as it
deems necessary.
ART. 36. The Council shall render assistance required by or under
a law for its execution. Among the assistance required may also be
the setting of further regulations in an ordinance.


ART. 37. Unless the regulation under which the assistance is called
for determines otherwise, the Council may have the assistance-
required of it with the exception of that [assistance which] consists-
of setting further regulations in an ordinance-rendered by a com-
mittee from among its members, while [the Council] sets such regula-
tions as it deems necessary.
ART. 38. 1. The Council shall publicize the drafts of ordinances
which contain general binding regulations in the way described in
the general administrative decree, unless urgent reasons prevent this
[publicizing] according to its [i.e., the Council's] judgment, and it
shall provide the opportunity for sending objections to it [i.e., the
Council] in writing during a term to be determined also in a general
administrative decree.
2. Unless urgent reasons prevent this according to its judgment,
the Council shall deliberate and determine drafts of ordinances in
public. Ordinances which are not deliberated or determined in public
shall require Our approval.
3. Ordinances of the Council, as specified in the first paragraph
and in Article 47, shall be promulgated in the way to be determined'
by general administrative decree. If they require Our approval, the
promulgation does not take place until after it is granted. They go
into effect the day after their promulgation unless otherwise
ART. 39. The chairman shall represent the Council in and out of
ART. 40. The Council, if requested, shall inform Our Ministers
desigated under Article 28, first paragraph, about all matters con-
cerning the Council.
Concerning Advice from the Council
ART. 41. 1. The Council, if requested, shall advise Our Ministers and
may advise them of its own accord on the execution of this Law and
other matters of a social welfare or economic nature.
2. Unless the national interest forbids this according to their judg-
ment, Our Ministers, under Article 28, first paragraph, shall request
advice from the Council or the committee specified in Article 43 con-
cerning all the important measures in the social welfare or economic
field that they intend to take.
ART. 42. 1. The Council may establish committees on which persons
outside the Council may also be seated, to prepare advice to be given
by it.
2. With respect to these committees, Articles 9, 10, and 28 shall be
applicable accordingly.
ART. 43. 1. At the request of Our Ministers concerned, the Council
shall establish committees to consider certain subjects. The composi-
tion of these committees on which persons outside the Council may also-
be seated shall be drawn up in consultation with Our Ministers.
2. The Council, if requested, shall submit along with its advice that
[advice] of a committee established according to the previous para--

3. If Our Ministers concerned have requested the advice of such a
committee, it shall be given to them directly. The Council shall be
notified of this advice.
4. With respect to these committees, Article 9, 10, and 28 shall be
applicable accordingly.
ART. 44. The Council may authorize the committees specified in
Articles 42 and 43 to give advice in its name. Such an authorization for
advice to be given shall not be granted at the request of one of Our
Ministers when such [a Minister]has requested that it [i.e., the advice]
be given by the Council itself.
ART. 45. 1. The advice of the Council and its committees shall be
drawn up according to the opinion of the majority of the meeting.
2. Dissenting opinions of the minority shall be mentioned in the
3. Members shall be entitled to add minority comments to the advice,
if the opinion expressed therein was defended in the meeting in which
the advice to be given was discussed.

(oneern*g Finarwes
1. Conoemr'ng the Budget
ART. 46. 1. The executive committee annually shall submit an esti-
mate to the Council before October 1 of the receipts and expenditures
in the coming calendar year, accompanied by the necessary explana-
tions and documents.
2. The budget, as soon as it is submitted, shall be deposited at the
office of the secretariat: [it shall be] available for reading and, upon
payment of the costs, be made available [for purchase] generally.
3. A public notification shall be made of the [above-mentioned]
deposit and availability at least fourteen days preceding the discussion
of the bud get in the Council.
ART. 47. The budget shall be determined by ordinance by the
Council and require Our approval.
ART. 48. 1. The budget as determined by the Council shall be sub-
mitted to Us before November 15 for approval.
2. If it is not approved before the beginning of the year for which
it must serve, the Council may be authorized by Us to make expendi-
tures from those items, as well as collect those receipts, against which
We do not object.
ART. 49. 1. If the Council refuses to enter on the budget the expendi-
tures required of it by law, this shall be done by Us.
2. If in that case the estimated receipts are not sufficient and the
Council refuses to propose new means to cover it, the other expendi-
tures not required by law for the Council shall be decreased by Us in
such a way as to balance the receipts and the expenditures.
ART. 50. Our Minister of Economic Affairs may set regulations con-
cerning the structure of the budget of the Council.
2. Covcerning the Administration and the Accounts of the Adin is-
ART. 51. The executive committee administers the capital and the
receipts and expenditures of the Council, provided that the Council
may set regulations on the subject by ordinance.

ART. 52. 1. The executive committee shall account to the Council
for the administration during the past calendar year, producing the
statement of receipts and expenditures.
2. The account, with all documents belonging to it and while stating
what the executive committee deems useful for its accounting, shall
be submitted to the Council within two months after the end of the
year to which it [i.e., the account] refers. It shall be deposited at the
ofiie of the secretariat [and be] available for reading to everyone and,
against payment of the costs, be made available [for purclh ase] gen-
erally. A public notification of the deposit and availability is made
preceding the deliberations specified in the third paragraph by at
least fourteen days.
3. The Council shall examine the account and determine the amount
of the receipts and expenditures. The deliberations and the voting shall
take place in public. The members of the executive committee may be
present at the deliberations, but refrain from voting.
4. The decision of the Council shall require Our approval.
5. Our approval shall serve, insofar as it concerns the receipts and
expenditures approved, as the discharge of the executive committee,
except in case of forgery in vouchers or of other irregularities.
ART. 53. The Council shall be obligated to supply all information
requested concerning the receipts and expenditures and to allow ac-
cess to the books if requested by Our Minister of Economic Affairs
and the experts designated by him.
3. Cmweing the Receipt8
A r. 54. The means to cover the expenditures allowed in the budget
shall be acquired;
a. by levying surcharges on the amounts which are determined
under Articles 22, third paragraph, and 23, second paragraph, of'
the Trade Register Law (landelsregisterwet, Stb. 1954, 557);
b. by levying amounts from entities as specified in Article 66.
ART. 55. I. The Council shall annually set forth in an ordinance the
number of surcharges, as specified in the previous Article under a. The
Chambers of Commerce shall collect these surcharges at the same time
and on the same basis and in the same way as the amounts due under
Articles 22 and 23 of the Trade Register Law.
2. The Council shall lay down in an ordinance which entities shall
owe amounts as specified in the previous Article, under b., and how
these amounts shall be calculated.
3. The ordinances specified in the first and second paragraph shall

Concerning the Supervision of the Council
ART. 56. 1. If an ordinance or another resolution from the Councit
sslm reir Our approval, it shall be refused only because of conflict
with thelaw orthegeneral interest
2. We shall make Our decision known within two months after the,
day on which the resolution has been submitted to Us for Our approval
We may defer Our decision in a resolution made within that time and
stating the reasons.


3. What is determined in the previous paragraphs is not applicable
with respect to the approval specified in Article 52, fourth paragraph.
ART. 57. Except for what is stated in Article 52, fifth paragraph,
Our approval shall be granted for or withheld from the resolution
in its entirety, as it is laid down by the Council.
ART. 58. The resolutions of the Council, the chairman, the executive
committee, the secretary-general and the committees from among the
members of the Council may be suspended or annulled by Us, insofar
as they are in conflict with the law or the general interest.
ART. 59. The suspension or annulment shall be ordered by Us in a
resolution to be placed in the Staatsblad and stating the duration
ART. 60. 1. Suspension shall immediately stop the effect of the sus-
pended provisions.
2. It may not last longer than one year, even after extension.
ART. 61. 1. If the annulment of the provisions shall not be pro-
nounced by Us within the duration determined for the suspension,
these shall be deemed to be valid.
2. A public notice shall be made of this, insofar as it concerns an
announced resolution.
ART. 62. Annulment of a resolution shall entail annulment of all
consequences of the annulled provisions, insofar as Our resolution does
not determine otherwise.
ART. 63. If a resolution is suspended or annulled in full or in part,
the competent organ shall see to it that Article 60 or Article 62 is
complied with and that, insofar as is necessary, a provision is again
made for whatever the suspended or annulled provisions regulated.
ART. 64. Partial suspension or annulment of a resolution shall not
have any influence on the validity of the provisions not mentioned
in the resolution for suspension or annulment.
ART. 65. The Council shall annually submit a report before April 1
to Our Ministers designated under Article 28, first paragraph, about
its activities and those of the committees, as specified in Articles 42
and 43, in the past calendar year. This report shall contain among
other things an extensive account of the findings of the Council in the
exercise of the supervision assigned to it in the sixth title of the second
chapter. This report shall be made available [for purchase] generally,
upon payment of the costs.

ART. 1. In this Decree Our Minister shall be understood [to mean]:
Our Minister of Economic Affairs.
ART. 2. There shall be a provisional General Energy Council, here-
after to be called the council. The council shall have its seat at The
5 Staat8blad van het Koninkrijk der Nederlanden [official law gazette of the Netherlands].


ART. 3. 1. The council shall have as its task to advise Our Minister
at his request or of its own accord concerning:
a. the energy policy to be pursued in general;
b. the setting of priorities for the draftng of annually shifting
five-year plans in the field of energy as well as concerning the
policy elements important in this plan;
c. the attuning and integrating of advice from the advisory
organs active in the field of energy;
d. the realization of an optimal advisory structure in the field
of energy.
2. The council further shall give evidence of its opinion to the
Minister annually concerning the progress which is made in the execu-
tion of the energy policy.
3. Our Minister shall publish the advice given to him, unless
important reasons are against it.
ART. 4. 1. The council shall consist of thirteen members at the most,
who are appointed by Our Minister for three years.
2. Whoever is appointed as a member to fill a place vacated in the
interim shall tender his resignation at the time at which the one in
whose place he is appointed should have resigned.
3. The chairman shall be designated by Our Minister from the
members of the council.
4. The council shall designate the alternate chairman from among
its members.
ART. 5. The council shall have a secretariat which shall consist of
one or more persons to be designated by Our Minister.
ART. 6. Our Minister may, at his own request or at that of the
council, be represented in the meeting of the council by one or more
officials to be designated by him.
ART. 7. The.council may turn directly to government services, and
public and private institutions to obtain the information it needs.
ART. 8. The council may establish committees from among its
members under approval from Our Minister.
ART. 9. The council shall establish rules of procedure to regulate
its activities.
ART. 10. The members of the council shall refrain from voting on
an advice, if it concerns a matter in which they have a personal stake.
ART. 11. The chairman and the members of the council shall be
bound to secrecy in regard to what has come to their knowledge while
performing their task, insofar as that obligation follows from the
nature of the matter or was imposed explicity.
ART. 12. 1. This decree shall go into effect the second day after it is
placed in the Staatsblad.
2. It shall expire after three years.


The legal basis for planning activities in Norway is difficult to
compile into a compendium. of statutes and regulations because the
Norwegian planning activities are primarily the result of administra-
tive decisions within the executive branch of the Norwegian
Norway follows the parliamentary form of government, which
typically requires that the Government must have the confidence of
the majority of the Parliament in order to function. It is quite usual
for the Norwegian Government to ask informally for the consent of
the Parliament on important questions, and this kind of consent seems
to be primarily the basis for the.Norwegian long-term programs. On
numerous occasions the Norwegan Parliament has approved these
planning activities in the form of informal resolutions, has made ex-
tensive use of the plans, and has enacted legislation to implement
specific parts of the plans, but it seems not to have passed any cm-
prehensive legislation on the planning activities as such. The only
broad executive order that has been located on this matter is a Royal
Resolution of January 11, 1952. which stated in full: "The Bureau of
Budget and Planning is, as of February 1, 1952, transferred from the
Ministry of Commerce to the Ministry of Finane." "a
The implementation of the plans has to some extent been based on
voluntary acquiescence, but in many cases it has also been necessary
to rely on statutory provisions, and the picture here is confusing. At
times it has been possible to use provisions in statutes which served
completely different purposes than planning; in other cases, existing
statutes have been amended to conform to the needs of the planners.
There are also examples of completely new legislation which serve
planning purposes exclusively, such as the 1965 Statute on Monetary
and Credit Policy.
A very recent standard text on Norwegian law does not exaggerate
the need for a codification of Norwegian laws on planning when it
states: 2
"The development of laws on economic and physical planning on
regulation of the rights to use property, and on the protection of nature
and the environment has been similar to that found in other areas of
[Norwegian] law. Special statutes or amendments to existing statutes
have been passed as it has been recognized that special needs have
arisen or that special interests ought to be protected.-The laws have
I Norwegian translation by Dr. Finn Henriksen, Senior Legal Specialist, European Law
Division. Law Library,, Library of Congress.
In 1952 Norsk Lovtidend, Av. 2. p. 25.
2 Ragnar Knoph, Knophs Oversikt over Norges Rett 745-746 (7th ed. Oslo, 1975).
Translated by Finn Hlenriksen.