European Community, Deputy Governor Mr. John Kelly said yesterday.

By the end of this century the European Community is expected to include about 20 countries, he told Rotarians at their weekly luncheon at The Princess.

And highlighting the origin, structure, procedure, and aim of the EC, Mr.

Kelly said the European Parliament is playing an increasingly important role in EC members' legislation.

The EC, which consists of 12 countries including the UK which took over its presidency this month for the next six months, has set a target of developing a single market by the end of the year, he noted.

The intention of the single market programme, since its inception in the mid 1980s, was to establish an area without internal budget in which goods and professional services would be available.

"The most important area for the British Government to focus on in the next six months is the EC's position on the single market,'' Mr. Kelly said. "This will bring the members of the European Free Trade Association closer to the community.'' Mr. Kelly said some countries of the EFTA -- Norway, Sweden, Austria and Switzerland -- have already applied to become members of the EC. This, he said, should happen by 1995.

And while admitting he did not know what intentions of a single market would mean to Bermuda, Mr. Kelly listed other opportunities the EC offers such as: Allowing internationals living in the UK to vote in European Parliament elections, and Providing "short-stay'' visas to citizens of EC countries.

Mr. Kelly also explained that the EC devises important laws and treaties which prevail over national laws when there is a conflict between the two.

He said while much discussion took place involving national governments during the developing of EC legislation, EC laws were applicable in all member states and they do not have to be ratified by national governments, Mr. Kelly said.

"The basic structure of the European Community is very bureaucratic and legalistic,'' he admitted.

But he said there is a "principle of subsidiarity'' which prevents "over regulation'' by the EC in national matters.

"The (European) Commission has promised to avoid intervention into matters better dealt with at the national level,'' Mr. Kelly said. PHOTO Mr. John Kelly.