6. 5. 98 Official Journal of the European Communities L 132/1 (Acts whose publication is obligatory) COUNCIL REGULATION (EC) No 942/98 of 20 April 1998 amending Regulation (EC) No 724/97 determining measures and compensation relating to appreciable revaluations that affect farm incomes THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EEC) No 3813/92 of 28 December 1992 on the unit of account and the conversion rates to be applied for the purposes of the common agricultural policy ('), and in particular Article 9 thereof, Having regard to the proposal from the Commission, Whereas Regulation (EC) No 724/97 () determines measures and compensation relating to appreciable re- valuations of the agricultural conversion rate that affect farm incomes; whereas that Regulation does not apply to appreciable revaluations that may occur after 30 April 1998; whereas it should therefore be amended to cover any revaluations which may occur in the period up to the introduction of the single currency; Whereas Article 4(3) of Regulation (EC) No 724/97 provides that the maximum amount of aid shall be reduced or cancelled if necessary as a function of the effect on income of the development of agricultural conversion rates recorded during a certain observation period; whereas, in order to avoid compensation which is excessive in relation to the loss of income actually incurred, it is also necessary to take account of the market situation; Whereas the introduction of the single currency on 1 January 1999 will put an end to fluctuations in agricul- tural conversion rates for the Member States particpating in the euro; whereas it is therefore appropriate to end the observation period for those Member States on 31 December 1998; Whereas the observation period for the other Member States may extend beyond 31 December 1998; whereas, since the market situation is to be taken into account, it is (") OJ L 387, 31. 12. 1992, p. 1. Regulation as last amended by Regulation (EC) No 150/95 (OJ L 22, 31. 1. 1995, p. 1). () OJ L 108, 25. 4. 1997, p. 9. helpful to extend the observation period to nine months instead of six, and to provide for a further extension if a subsequent appreciable revaluation occurs during the observation period for the preceding appreciable revalu- ation; Whereas application of Article 4 of Regulation (EEC) No 3813/92 means that the agricultural conversion rate may not decline by less than 2,56 %; whereas, to limit the risk of excessive compensation in cases of small appreciable revaluations, aid should not be granted for the amount corresponding to an appreciable part of less than 2,6 %; Whereas decisions to reduce or cancel the second and third tranches should also be taken in the light of the market situation; Whereas the method of taking the market situation into account should be defined; whereas this method may involve, on the one hand, comparing the development of market prices in the Member State whose currency has been appreciably revalued with that in the Member States whose currencies have not been appreciably revalued during the observation period and, on the other, consid- ering how far operative events in the various sectors have already occurred on the date of the appreciable revalu- ation, HAS ADOPTED THIS REGULATION: Article 1 Regulation (EC) No 724/97 is hereby amended as follows: 1. the first subparagraph of Article 1(1) shall be replaced by the following: ‘1. This Regulation shall apply in the event of appreciable revaluations occurring from 1 January 1997 and before 1 January 1999.;