Jack Wall
Question:146 Mr. Wall asked the Minister for Finance if he will make a statement on the outcome of the meeting of EU Finance Ministers on 18 February 2003. [5386/03]
Written Answers - ECOFIN Council.
The main developments at the ECOFIN Council of 18 February included a number of matters. Under the item, preparation of spring European Council of 21 March 2003, the Council examined: the Lisbon strategy and the broad economic policy guidelines, BEPGs; a comprehensive report on Eurozone statistics and indicators; and the Commission's communication on strengthening the co-ordination of budgetary policies.
With regard to broad economic policy guidelines, following a presentation by Commissioner Solbes, the Council held a first exchange of views on the Lisbon strategy based on the Commission's synthesis report. It also discussed the first elements for a key issues paper for the 2003 BEPGs on the basis of a draft text prepared by the Greek Presidency. Following the debate, the Council instructed its relevant preparatory bodies to further examine the areas that need to be tackled with a view to presenting a final draft of the Key Issues Paper at the next ECOFIN Council on 7 March 2003.
The Council also adopted conclusions on the Commission's implementation report on the 2002 BEPGs. According to the conclusions, reforms in the EU labour market have started to pay off as evidenced by the increase in the job content of growth. However, the European economies still have a long way to go to fulfil the objectives of the Lisbon strategy.
The implementation report notes that Ireland is among the middle group of member states in terms of follow-up on country-specific parts of the BEPGs. The report notes in respect of Ireland that:
Some progress was made in following up the finance recommendations. While the fiscal stance in 2002 is likely to have been expansionary rather than broadly neutral as recommended, some measures were taken to improve expenditure control and new ones were announced at the end of 2002.
With regard to Eurozone statistics and indicators, the Council and the Commission adopted a joint report on Eurozone statistics and indicators and decided to forward it to the spring European Council. The Council and the Commission invited the European Council to support the further development of European macro-economic statistics based on sound methodological principles.
With regard to strengthening the co-ordination of budgetary policies, in November 2002, the European Commission published new proposals for strengthening budgetary co-ordination, including proposals relating to the implementation of the Stability and Growth Pact. The issue remains the subject of further discussion. It is due to be finalised at the spring European Council in March.
With regard to the governing council of the ECB, the Council discussed the issue of the voting modalities of the governing council of the European Central Bank, ECB. The Council took note of the ECB's recommendation in the matter and called on the Permanent Representatives Committee to undertake an examination of it with a view to preparing the matter for final consideration by ECOFIN at its meeting of 7 March.
With regard to the Stability and Growth Pact, the Council examined the updated stability and convergence programmes for Belgium, Ireland, Spain, Denmark and the United Kingdom. In the opinion on Ireland, the Council welcomed the commitment of the Government to have the Stability and Growth Pact provide the framework for its budgetary policy. The opinion noted that under the programme for Ireland the deficit would stabilise at 1.2% of GDP in 2005 and that the targets imply an underlying deficit of around 0.5% of GDP in each year, reaching a level of close-to-balance or in surplus by the end of the period to 2005.
The opinion urged the Irish authorities to ensure that the budgetary stance is implemented as planned in the programme. It also welcomed the range of measures outlined in the programme to improve the management and control of public expenditure. According to the opinion, Ireland, with its low debt level and gradual build-up of assets in the national pensions reserve fund, seemed to be in a relatively strong position to cope with the budgetary impact of ageing populations. On inflation, the opinion urged that the projected downward path be attained in order to preserve competitiveness and price stability.
With regard to taxation, the Council decided to postpone the discussion on energy taxation until its next meeting on 7 March. The Council reached political agreement on the text of the new regulation on administrative co-operation in the field of value added tax and on the Directive amending Council Directive 77/799 concerning mutual assistance in the area of direct taxation, pending and subject to the opinion of the European Parliament. The Council instructed the Permanent Representatives Committee to finalise the legal texts of the draft regulation and the draft directive with a view to adopting them in due course.
With regard to the Financial Services Committee, the Council adopted a decision establishing the Financial Services Committee, FSC, to replace the Financial Services Policy Group. The FSC will advise the Council and the Commission on financial market issues. It will report to the Economic and Finance Committee in order to prepare advice to the Council.