Jan O'Sullivan
Question:25 Ms O'Sullivan asked the Minister for Finance if he will report on the Euro 11 meeting held in Brussels on 23 November 1998 and the ECOFIN meeting held on that day; and if he will make a statement on the matter. [28034/98]
Written Answers - EU Meetings.
The meeting of the euro 11 group, held on 23 November 1998, was attended by the Secretary-General of the Department of Finance and me. Among the items discussed were general economic policy, corporate tax harmonisation and external representation. As the Deputy is aware, discussions at euro 11 are of a strictly confidential nature.
The agenda for the meeting of Finance Ministers of the European Union, held on the same day, consisted of the following issues.
ECOFIN considered the progress of Agenda 2000 negotiations, focusing on stabilisation and the own resources system. Some member states have suggested a system of budgetary stabilisation, as opposed to the Commission's proposed financial perspective. During this debate, I emphasised the clear need to provide sufficient resources for the orderly development of the Unions' policies.
The Council held an exchange of views on the Commission's own resources report on the operation of the own resources system. Items discussed included the performance of the present system as well as the equity of gross contributions.
On Communication or a Framework for Action, I can also report that the ECOFIN Council considered a document prepared by the European Commission titled "Financial Services: Building a Framework for Action". The Council had instructed the Commission at the Cardiff Summit to prepare a paper on a framework for action to improve the single market for financial services.
The Commission paper reviewed financial services relating to wholesale markets, retail financial markets, supervisory co-operation and taxation. In its communication the Commission concluded that, against the background of the introduction of the euro, EU financial services legislation needs to be enforced effectively but does not require a major overhaul. Delegations stressed the need to achieve the single market in financial services and welcomed the Commission's proposal that a high-level group be set up to identify priorities in this area.
The temporary high-level Financial Services Policy Group, to be composed of personal representatives of ECOFIN Ministers and chaired by the Commission, is to draw up a report identifying the political priorities in the area of financial services. The report is to be presented to ECOFIN next June. The group is to examine four areas: where new legal initiatives will be required, where existing provisions have to be adapted to new developments, where existing provisions need to be simplified and where existing provisions should be more coherent. The Council underlined that the group should give the necessary consideration to consumer protection.
A proposal for a directive concerning the distance selling of financial services, which was adopted by the Commission on 14 October, was presented to the Council. The proposal is intended to amend Directives 90/619/EEC, 97/7/EC and 98/27EC and thus complement existing provisions on distance selling of goods and services other than financial services. The aim of the proposed directive is to ensure a high level of protection for consumers of retail financial services marked by telephone, electronic means, such as the Internet, or by mail. The proposal was welcomed by the President, who emphasised that consumers should have the same legal certainty for transnational business in financial services as they enjoy at national level. The Council mandated the examination of this proposal with a view to reaching an agreement on a common position.
Ministers were presented with a report on services of general economic interest in the banking sector which was prepared by the European Commission. The Commission's report contains a study of services of general economic interest in the banking sector and sets out the criteria that will be taken into account when evaluating these services. It is up to the Commission to ensure the application of competition and state aid rules and in this respect the report does not preclude or prejudge any decision that the Commission may arrive at as it evaluates, on a case by case basis, the practices set out in the report. There are currently no credit institutions in Ireland that perform services of a general economic interest.
Ministers had a brief exchange of views on developments in the area of risk capital focusing on the aspects highlighted in the communication and action plan which the Commission had submitted to the Cardiff European Council, a revised version of which was considered at the June 1998 ECOFIN in Luxembourg. The Commission's paper included an action plan to remove barriers to risk capital markets contributing to the growth of SMEs leading to increased employment. I welcomed the Commission's communication on risk capital and the timely opportunity it presented to examine the role that pan-European risk-capital markets can play in job creation in Europe.
While I should point out that the majority of the proposals under the action plan will fall to be implemented by the Department of Enterprise, Trade and Employment, I can, however, assure the Deputy that that Department has indicated that the Commission paper represents a reasonable attempt to identify the shortcomings of the EU risk capital market and to present solutions thereto.
On employment, the Council pushed forward with the agenda for completing a joint employment report and preparing employment guidelines for 1999. Account was taken of progress that had been made on this same agenda also at the Labour and Social Affairs Council of 20 November, that is a few days previously. Considerable progress was made so as to permit the ECOFIN and Labour and Social Affairs Councils at a joint meeting of the two Councils on 1 December, to be in a position to clear the report and the guidelines for submission to the Vienna European Council.
The President of the Court of Auditors presented the Court's report on the execution of the 1997 budget. The report will now be examined in detail and ECOFIN will return to it early next year when it will deal with the discharge recommendation.
On Efficient Financial Management and SEM 2000 — Council Conclusions — the Council welcomed the fourth progress report on the matter of sound financial management and complimented it on progress since its first report in 1996. The importance of continuing to improve co-operation between the Commission and member states, particularly in order to remedy shortcomings identified by the Court of Auditors, was emphasised. The Council invited the group to become actively involved in other aspects of financial management and control especially in relation to applicant countries, implementing Agenda 2000, re-casting the Council's financial regulation — relation to the Communities general budget — and any proposals conducive to improving financial management and control and fighting fraud.
The Council urged the Commission to monitor EU expenditure more efficiently so as to reduce the concentration of budget transactions at the end of the financial year. It invited the Commission to ensure more systematic development of evaluation of results achieved and of the costeffectiveness ratio of Community expenditure and Community measures pursuant to the Council's financial regulation. Finally, the Council underlined the need for effective financial control of all categories of expenditure, including external aid, in the light of the necessary decentralisation of the management of Community expenditure.
The Council took note of the Commission's anti-fraud work programme.
On combating counterfeiting of the euro: the Council welcomed measures being undertaken by the European Central Bank and member states to combat counterfeiting. The ECB and the Commission were invited to consider whether there was a need for any further action in this area.
On regulations on agents authorised by the Commission to carry out controls and inspections on the communities' own resources the Permanent Representatives Committee was mandated to reach agreement on one outstanding issue relating to this regulation.
Some member states raised specific points relating to the 1999 EU Budget. It was agreed that this matter is best considered at the Budget Council.
Ministers at the ECOFIN Council met with the EU social partners over lunch. The discussion was conducted in broad terms and consisted of an exchange of views on the economic and employment situation in the EU. On foot of the introduction of the euro, dialogue between the Council and the social partners will be intensified in view of the need to achieve a balanced macroeconomic policy mix covering monetary, fiscal and income policies.
The Council approved a number of principles to apply to the issue of collector coins in euro.
Ministers informally discussed the possibility of further assistance to Central American Countries hit by hurricane "Mitch". The Monetary Committee was asked to examine, in particular, the question of a common EU approach to debt relief for these countries.