The role of the French market in determining market prices as well as the amount of the ewe premium is of prime importance. The prices quoted for lamb in France are influenced by several factors including the relative strengths of the pound sterling and the French franc. The phasing out of the clawback of the variable premium on exports of British lamb to France, the price of lamb coming from other Community markets such as Ireland and Spain, and imports from third countries, all impact on the French market prices.
There are no monetary compensatory amounts (MCAs) applicable in the sheepmeat sector at present. As part of the 1988-89 prices package, the Council of Ministers decided to phase out MCAs for all sectors where they apply. This process will take place on a gradual basis with appropriate adjustments in green currency values to ensure that MCAs will be completely eliminated from 1992. In these circumstances, it would be difficult to introduce a corrective monetary mechanism specifically for sheepmeat. However, the EC Commission has undertaken to submit appropriate proposals to the Council should monetary discrepancies distort the sheepmeat market.