Ceist:
32 Dr. Upton asked the Minister for Finance if he will report on the ECOFIN meeting held in Brussels on 7 December 1998; and if he will make a statement on the matter. [28035/98]
Written Answers - EU Meetings.
As no ECOFIN meeting took place on 7 December 1998, I assume that the Deputy is referring to the ECOFIN meeting which took place on 1 December 1998. The following issues were considered at that meeting.
The Council noted the first interim report of the group which was set up to implement the code of conduct on business taxation agreed by ECOFIN in December 1998. Council also noted a report by the Commission on the code of conduct and a communication from the Commission on the application of state aid rules to business tax measures.
It was agreed that a conclusion on a draft Directive on savings taxation should be aimed for by June 1999. The importance of equivalent measures being adopted with non-EU countries was recognised. It was agreed that a Troika approach made up of the past, present and following presidencies of the Council together with the Commission should conduct exploratory contacts with specific third countries to this end. It is anticipated that the Commission would present a report on the discussions with third countries at the ECOFIN Council meeting in March 1999.
ECOFIN took note of discussions to date on the question of energy taxation and that further work would continue during the German Presidency. Ireland and other member states stressed the need to take account of the impact on industrial competitiveness and on price trends in future discussions.
The Council agreed on a progress report to the Vienna European Council setting out developments in relation to the code of conduct, tax on savings, abolition of withholding taxes on interest and royalties between associated companies and energy tax. It also agreed that the Commission should do a further study on company taxation in the EU.
The Council agreed on a report to the Vienna European Council on the state of preparation of Stage 3 of EMU concerning, in particular, the external representation of the Community. In its work on this matter, the Council has benefited from substantial help from the Commission and the ESCB/ECB in their respective fields of competence.
The external representation in Stage 3 of EMU will imply changes in the current organisation of international fora. Therefore, third countries and institutions will need to be persuaded to accept the solutions proposed by the European Union. The Council considered that a pragmatic approach might be the most successful which could minimise the adaptation of current rules and practices provided, of course, that such an approach resulted in an outcome which recognised properly the role of the euro. In developing this pragmatic approach, the Council concentrated its work on three important areas: representation at the G7 Finance Ministers and governors group; representation at the International Monetary Fund; and composition of ECOFIN delegations for missions to third countries.
As far as G7 is concerned, non-European partners have already accepted that the President of the ECB attends meetings of the group for discussions which relate to EMU.
Regarding the representation of the Community at ministerial level on EMU issues, the Council agreed to suggest to the other G7 partners to have the President of ECOFIN, or if the President came from a non-euro area member state, the President of the euro 11 at the table. If the President came from a non G7 euro area state, he/she would attend in addition to the euro area members already present at G7 meetings.
In a transitional phase, one of the euro area Ministers who are involved in the G7 group on a permanent basis will, for the sake of greater continuity, provide support for the President of the ECOFIN-euro 11 on a rotating basis for a term of one year. The Council also agreed to suggest to the other G7 partners that a Commmission representative shall be a member of the Community delegation.
With regard to representation at the IMF, the Council considered that pragmatic solutions for presenting issues of particular relevance to EMU may have to be sought which do not require a change in the Articles of Agreement of the IMF. A first necessary step has already been taken; the IMF executive board agreed to grant the ECB an observer position on that board. Second, the views of the European Community-EMU would be presented at the IMF board by the relevant member of the Executive Director's office of the member state holding the euro 11 presidency, assisted by a representative from the Commission. As for missions to third countries, the composition of ECOFIN-euro 11 delegations may vary with the circumstances and the objectives, it being the responsibility of the President of the Council-euro 11 to make the necessary arrangements.
The Council agreed a report to be presented to the Vienna Council on economic policy co-ordination. The report identifies the reasons for economic policy co-ordination and the means by which this will be achieved.
The Council approved a report to the Vienna European Council on strengthening the international financial system drawn up further to the request of the Heads of State or Government meeting in Portschach in response to the recent financial crisis.
The report, prepared by the Monetary Committee, underlines the need for EU member states to show both leadership and willingness to push forward ideas for reform in order to deal with weaknesses in the mechanisms of the international financial system for crisis prevention and resolution as well as weaknesses in emerging market economies, as exposed by the recent financial turmoil.
The Council reached political agreement on the two decisions concerning respectively the composition and the statute of the Economic and Financial Committee which is to replace the Monetary Committee at the beginning of Stage 3 of EMU. The resolution on co-ordination of economic policies adopted by the 1997 Luxembourg European Council had established that the EFC should be composed of high-level officials from the national Finance Ministries, the national central banks, the Commission and from the ECB.
Under the first decision concerning the composition of the EFC, the member states, the Commission and the European Central Bank will each appoint two members and may also appoint two alternate members. These members will be selected from among experts possessing outstanding competence in the economic and financial field.
The second decision concerning the statute of the EFC stipulates in particular that the tasks to be carried out by the Committee are those described in paragraphs 2 and 4 of Article 109 (c) of the Treaty and, moreover, that the Committee be consulted in the procedure leading to decisions relating to the exchange-rate mechanism of the third stage of economic and monetary union (ERM 11); prepare the Council's reviews of the development of the exchange-rate of the euro, without prejudice to Article 151 of the Treaty; provide the framework within which the dialogue between the Council and the European Central Bank can be prepared and continued at the level of senior officials from ministries, national central banks, the Commission and the ECB.
This decision also establishes that the Committee will elect, by majority vote, its President from among its members who are senior officials in the national administrations, for a period of two years. This term is renewable.
The Council invited the Commission to put forward a recommendation for a Council Decision enabling the French Government to negotiate new monetary arrangements with the Monegasque authorities. These monetary arrangements relate to the rules governing the relations between credit institutions located in Monaco and the Bank of France.
On Agenda 2000 Council discussed a number of detailed options and possible solutions to some key questions which were raised at the informal ECOFIN meeting in Vienna. It was generally acknowledged that the new financial framework should be based on two fundamental principles: the need to ensure strict budgetary discipline at EU level and the need to ensure that there are sufficient resources at the disposal of the Union to ensure the orderly development of its policies and to cope effectively with the process of enlargement.
Council examined the future volume of expenditure. Following this examination discussions focused on the concept of real stabilisation of expenditure and how it relates to the drawing up of the new financial perspective. The interdependence between successful policy reform and the principle of strict budgetary discipline and their mutual compatibility is acknowledged by most member states.
Regarding the Community's own resources system, a preliminary examination has taken place on the issues and options mentioned in the Commission's report on the operation of the own resources system. The report is considered by many member states to provide a good basis for guiding future discussions.
The Council reached political agreement on a common position concerning a proposal for a regulation amending Regulation (EC) No. 2236/95 laying down general rules for the granting of Community financial aid in the field of transEuropean networks. The Council will adopt formally the common position at a forthcoming session before the end of 1998.
The proposal for this regulation was tabled by the Commission on 11 May 1998 in the framework of the Agenda 2000 exercise. The European Parliament has given its opinion on 19 November in the framework of the cooperation procedure.
The Council examined and welcomed the Stability Programme of the Netherlands 1999-2002. The Council opinion on the programme was adopted. The Council noted that the programme was based on significant progress towards fiscal consolidation and aims to reduce further the general government deficit and debt. The objective of limiting growth in Government expenditure was welcomed. In addition, the Council welcomed the continued emphasis on economic reform.
The Council also examined the Convergence Programme of Denmark 1998-2005. The Council opinion on the programme was adopted. The focus in the programme on budgetary consolidation underpinned by continued economic reform was welcomed. The Council noted that the programme was consistent with the broad economic guidelines. In addition, it was noted that the programme is already consistent with the requirements of the Stability and Growth Pact.
On employment, the Council approved the draft 1998 joint employment report on the draft employment guidelines for 1999, and subsequently on the same day held a joint meeting with the Labour and Social Affairs Council on the same subject. This cleared the way for the employment initiatives in the guidelines to be brought forward and adopted at the Vienna European Council.
On Facilitating the Reconstruction efforts in Central America, the Council and Ministers meeting in the Council agreed a statement covering humanitarian aid, bilateral and multilateral debt and reconstruction efforts.
The Council discussed the issue of duty free and tax free shopping for EU travellers after 1999. While a number of member states were in favour of retention of this facility, others did not agree to an extension and the presidency concluded that there was no unanimity. This was also the subject of a later discussion at the European Council in Vienna.
As part of its ECOFIN conclusions, the Council issued a detailed timetable for the adoption of the conversion rates on 31 December 1998 as follows. One, at the end of the regular central bank concertation procedure — 11.30 CET — the Commission will calculate the final official ECU exchange rates for the participating currencies in line with the established procedure. The Commission will propose these rates for adoption by the Council as the irrevocable conversion rates for the euro at 12.30 — CET — in a televised
Council session. At the same time the Commission will make these rates public via internet and financial information providers. Two, the Council will adopt the regulation and inform the public of its adoption at around 13.30 — CET. In addition, the Commission will make the adoption public by the same means as when it publishes the proposed rates. Three, the regulation will be published in the Official Journal of the European Communities and the regulation will be applicable as from 1 January 1999, 0.00 a.m. local time.