THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in Particular Article 100a thereof,

Having regard to the proposal of the Commission [OJ C 235, 13.8.1996, p. 8 and OJ C 137, 3.5.1997, p. 9.],

Having regard to the opinion of the Economic and Social Committee [OJ C 30, 30.1.1997, p. 94.],

Acting in accordance with the procedure laid down in Article 189b of the Treaty [Opinion of the European Parliament of 20 February 1997 (OJ C 85, 17.3.1997, p. 108), Council Common Position of 7 July 1997 (OJ C 284, 19.9.1997, p. 1) and Decision of the European Parliament of 19 November 1997. Council Decision of 18 December 1997.],

Whereas it is desirable, in order to promote the establishment and functioning of the internal market and to ensure that consumers benefit from a high level of protection, that a single method of calculating the annual percentage rate of charge for consumer credit should be used throughout the Community;

Whereas Article 5 of Directive 87/102/EEC [OJ L 42, 12.2.1987, p. 48. Directive as amended by Directive 90/88/EEC (OJ L 61, 10.3.1990, p. 14).] provides for the introduction of a Community method or methods of calculating the annual percentage rate of charge;

Whereas, in order to introduce this single method, it is desirable to draw up a single mathematical formula for calculating the annual percentage rate of charge and for determining the credit cost items to be used in the calculation by indicating those costs which must not be taken into account;