Vol. 539 No. 2
14 Dr. Upton asked the Minister for Finance the matters discussed and conclusions reached at the meeting of EU Finance Ministers in Luxembourg on 5 June 2001; the main features of the broad economic policy guidelines agreed at the meeting; and if he will make a statement on the matter. [19061/01]
The agenda for the meeting of economic and finance ministers, ECOFIN, which I attended on 5 June 2001 in Luxembourg, consisted of a number of issues. Under the heading of "Preparation for the Gothenburg European Council", three issues were discussed. These were the 2001 broad economic policy guidelines or BEPGs, sustainable development and taxation issues. In regard to the BEPGs, the Council agreed on the text to be sent to the Gothenburg European Council for political endorsement by the Heads of State and Government. The BEPGs would then be formally adopted by a special session of ECOFIN in Gothenburg.
The annual BEPGs are intended to define the main objectives and policy orientations for European economic policy in general and for individual member states over a 12 month period. The section of the 2001 guidelines which applies to all member states identifies three main challenges for the future: in the short-term to preserve the expansion in growth and jobs, in the medium term to improve the basis for future growth and employment and in the longer term to prepare for the impact of the ageing population
The section of the guidelines on Ireland notes that economic growth is slowing due to the slowdown in the US and the effects of foot and mouth disease, and that inflation is set to moderate. The guidelines recommend that budgetary policy be used to ease demand in the economy and public expenditure control be strengthened. They acknowledge our strong employment growth, that we are well exposed to international competition, and the ongoing structural change in our capital markets.
Ireland, like most other member states, had before Gothenburg sought a number of amendments to the draft guidelines, some of which have been reflected in the final text. We set out our position in a minute statement – which draws attention to the views we expressed at the time the recommendation to Ireland in respect of the 2000 BEPGs was being considered at the ECOFIN of 12 February 2001, and to the uncertainties which are inherent in macroeconomic forecasts on which the guidelines are necessarily based – which was included in the minutes of the ECOFIN meeting of 5 June.
Returning to the other items discussed at ECOFIN, the Council had an exchange of views on the Commission's communication on sustainable development. The Council also took note of a number of reports relating to the tax package, the taxation of savings and the code of conduct and approved conclusions with regard to the taxation of savings and the code of conduct, and with regard to the future work on all aspects of the tax package. Under the heading of indirect taxation, Ministers examined the issue of VAT on e-commerce and energy taxation. Council agreed that discussions on these issues would continue.
Ministers took note of the Commission's progress report on the implementation of the financial services action plan and welcomed the adoption of the key directives on the reorganisation and winding-up of credit institutions and insurance undertakings. Ministers also agreed in principle on macro-financial assistance to the Federal Republic of Yugoslavia, and agreed conclusions relating to the financial regulation applicable to the EU budget and to the fight against fraud. The lunch-time discussion included progress on the Lamfalussy report on the regulation of the European securities market, economic dialogue with Russia, and the usual Presidency debriefing on the Eurogroup meeting which was held the previous evening.
Will the Minister explain the standing of his minute statement on the meeting in Luxembourg? Is it not the case, notwithstanding the minutes, that the broad economic guidelines still require him, using fiscal policy, to bring budgetary strategy in Ireland into line with the 2000 BEPGs? Is it not the case that the Minister intends to do nothing in advance of the September review of the reprimand delivered at the start of this year?
I made clear in a number of cases the standing of the Article 99(4) recommendation. My main concern in dealing with the 2001 specific country guidelines relating to Ireland was to get out of the recommendation on last year's broad economic policy guidelines. We felt that was necessary. It is last year's business and related to last year's BEPGs. There was no need to repeat it. Therefore, the minute statement reflects that view and other matters to which I referred.
Yet it has been repeated.
It has been repeated and that is why I had the statement recorded in the minutes.
What is the standing of the minute statement?
The standing of the minute statement in any Council is that a particular country can express its reservations or record its understanding of events in the minutes. The broad economic policy guidelines are as they are. The treaty obligations are under the stability and growth pact, of which we are still the star pupil in the class.
Is it not the case that the Minister has already signalled to his colleagues that he does not intend to abide by the guidelines or the recommendation made in February this year? Therefore, we are inevitably in conflict with the broad economic policy guidelines which the Taoiseach and the Minister for Finance agreed to in Gothenburg only two weeks ago.
A part of that decision relating to the recommendation under Article 99(4) on 12 February was that the Commission would continue to monitor the Irish situation this year. It was understood that the Commission would be coming to assess that in April or May this year. It has decided not to come until September. We will see what happens then. I have made my position clear about the budget stance for this year.
Has the Minister any criticism of the policy guidelines or of how those guidelines are applied in any other member state?
In the run-up to the ECOFIN council on 12 February, when Ireland's position was against an Article 99(4) recommendation, I said that it was unfair and disproportionate that Ireland was to be singled out. I do not want to – nor have I – directly or indirectly singled out any other country which might more justifiably receive an Article 99(4) recommendation, or some other reprimand, in that they were not in line with the stability and growth pact. Commentators throughout Europe have referred to other instances where some reprimand could have been made to other countries—
Is the Minister referring to Italy?
I have not said that. Many com mentators have suggested that if the EU is to go down this road, they should not have started with Ireland.
