Brendan Howlin
Question:44 Mr. Howlin asked the Minister for Finance if he will report on the ECOFIN meeting at Luxembourg on 5 June 1998. [13706/98]
Written Answers. - ECOFIN Meetings.
The main item for discussion at the meeting of Finance Ministers of the European Union (ECOFIN) on 5 June last related to the preparation of a number of economic issues to be taken at the forthcoming European Council in Cardiff on 15 and 16 June.
The ECOFIN Council discussed the economic and financial aspects of Agenda 2000 on the basis of a draft report which is to be submitted to the Cardiff European Council by the General Affairs Council. We agreed draft conclusions which focused on the importance of Agenda 2000 to the future of the EU, the Luxembourg European Council Conclusions on budgetary discipline and on dual programming, the importance of sound financial management and on the entry into talks with the European Parliament on a new Inter-Institutional Agreement, on the basis of maintaining an appropriate balance between the institutions. The Council also noted the European Commission's intention to bring forward a report on the operation of the own resources system in the autumn. It was agreed that the Council will continue to consider the important economic and budgetary issues arising from Agenda 2000.
The broad economic guidelines were agreed by ECOFIN and remitted to the Heads of State or Government at the European Council in Cardiff. The guidelines are prepared annually under Article 103 of the Treaty as part of multilateral surveillance of the EU economy and contain recommendations for the conduct of economic policy including some country specific recommendations. The guidelines urge Governments and the social partners to make all the required efforts to support the stability objective of the single monetary policy and call for structural reforms of the product, service and labour markets to facilitate growth, to improve competitiveness and to translate growth into employment. I fully endorse these principles.
As regards the recommendations for Ireland, the guidelines propose that Ireland prepare the 1999 budget with the objective of the continuation of low inflation. The Government is already committed to this objective in the Communique on the revaluation of the Irish pound on 14 March last.
The Council held a discussion on the employment action plans presented by member states in implementing the 1998 employment guidelines agreed at the extraordinary European Council of last November in Luxembourg.
Ministers welcomed progress across the EU to ensure that the young and long-term unemployed and other socially excluded groups are reintegrated into the workforce and reaffirmed the importance of using active labour market measures, sound macro-economic policies and structural reform to markets. Ministers also agreed on the need to ensure that tax and social security systems are employment friendly and noted the importance of small and medium-sized enterprises and of creating a culture of entrepreneurship.
A similar discussion on the plans took place at the Social Affairs Council on 4 June. On foot of the discussions in the two Councils, the Presidency will prepare an overall report on the plans for the Cardiff European Council.
The Commission paper — Risk Capital: A key to job creation in the European Union — was discussed at ECOFIN on 21 April. The Commission presented a revised paper to ECOFIN last week which took account of the discussion in April. The Commission paper includes an action plan to remove barriers to risk capital markets contributing to the growth of SME's leading to increased employment. The Council welcomed the Commission report and concluded that the Council and member states should now examine the Commission's recommendations in further detail.
Other items on the agenda included the following: The Council adopted, without discussion, a decision on the statistical data to be used for the determination of the key for subscription of the capital of the European Central Bank and Regulations on the status and treatment of European Central Bank officials.
Mr. Edlinger, Finance Minister of Austria, who chaired the first meeting of the Euro-XI Group held on 4 June, informed the Council about the outcome of that meeting which discussed mainly organisational matters for the group's meetings and the general macroeconomic situation in the euro area.
The Commission gave a presentation of their proposal for a Directive on cross-border savings. This followed on from the ECOFIN Council conclusions on taxation policy adopted on 1 December 1997 which,inter alia, approved a text on the taxation of savings as the basis for a Directive in this area.
The aim of the latest proposal is to ensure a minimum level of effective taxation of interest paid in each member state to private individuals who are resident for tax purposes in another member state. The Commission's proposal envisages that each member state will be required to either operate a withholding tax or to provide the other member states with information on savings income paid to their residents. The adoption proposal would give member states the option of either applying a withholding tax, levied at a proposed 20 per cent; minimum rate by the paying agent, or of providing information on savings income to other member states, or using a combination of both systems. It was agreed at the meeting that the competent Council bodies would carefully examine the proposal.
The Council took note of the conclusions adopted by the Telecommunications Council on 19 May last and heard a progress report by thead hoc working group on electronic commerce concerning Community co-ordination in this field. The Commission also indicated that a report on the indirect taxation aspects of electronic commerce will be submitted to a future meeting of the Council.