Brussels, 22 December 2004
The European Commission has decided to pursue a total of fourteen infringement cases involving eight Member States in order to ensure that they live up to the commitments they have made to implement single market laws, agreed by the European Parliament and the Council, on financial services, accounting and the recognition of professional qualifications. The Commission is to refer Greece, France and Luxembourg to the European Court of Justice because they have not notified the Commission of national measures implementing the 2002 Collateral Directive or the 2001 “fair value” Directive on accounting rules. The Commission will also send “reasoned opinions” formally requesting the Netherlands to implement the Collateral Directive and asking Germany and the UK (for Gibraltar) to write into national law the Fair Value Directive. Reasoned opinions are the second stage of formal infringement proceedings under Article 226 of the EC Treaty. If those three Member States do not give a satisfactory response within two months, the Commission may refer them, too, to the Court. The Commission will refer Belgium, Germany, Greece, France and Austria to the Court over the incomplete implementation at national level of the 2001 Directive on the mutual recognition of professional qualifications
Single market Commissioner Charlie McCreevy said: “These Directives have been agreed by the Member States in the Council in order to help allow the single market to realise its enormous potential to create further wealth. When Member States do not fulfil their commitment to implement single market laws on time, citizens and businesses across Europe are denied opportunities. The new Commission will continue to do all it can to help Member States to get implementing laws on to national statute books by the deadlines that they themselves have set. We will not shrink from taking action if they do not, including by further referrals to the Court.”
In July 2004, the average implementation deficit (the percentage of Directives that have not been implemented in national law in due time) for the EU as a whole was 2.2% (see IP/04/890). The target set by Heads of Government at successive European Councils is 1.5 %. The next set of figures will be published in early 2005.
Directive on Financial Collateral arrangements: Greece, France, Luxembourg and the Netherlands
The Commission has decided to refer Greece, France and Luxembourg to the European Court of Justice for non-transposition into national law of Directive 2002/47, after sending them reasoned opinions in July 2004 (see IP/04/891). It has also decided to issue a reasoned opinion against the Netherlands.
All Member States should have implemented and applied the Directive by 27 December 2003. The fact that not all have done so distorts and disturbs the harmonised system of simplified financial collateral arrangements that the Directive is intended to put in place and to guarantee.
The Directive creates a clear and uniform EU legal framework to limit credit risk in financial transactions through the provision of financial instruments and cash as collateral and is a priority measure under the Financial Services Action Plan, which in turn is a key element in the Lisbon strategy to make Europe's economy more competitive. Collateral is a huge market in the EU, with the total value of outstanding contracts on the market for repurchase agreements ('repos') alone estimated to be worth around 2 trillion euros.
Collateral is the assets (such as securities) provided by a borrower to a lender to minimise the risk of financial loss to the lender in the event of the borrower failing to meet in full their financial obligations to the lender. It is also used to protect the exposure of both parties in repurchase and derivatives transactions, among others. Before the Directive, market operators in the European Union faced widely divergent national legal regimes for the provision of collateral, leading to uncertainty over the effectiveness of collateral in cross-border transactions.
Sweden and Belgium have also not yet implemented the Directive, but have provided a detailed timetable for when the relevant national laws will enter into force. The Commission is not therefore at present referring them to the Court, but will closely monitor implementation to ensure that they meet their commitments. Italy, which also received a reasoned opinion in July 2004, has now notified the Commission that it has transposed the Directive into national law.
Accounting rules: Greece, France, Luxembourg, Germany and the UK
The Commission has decided to refer Greece, France and Luxembourg to the European Court of Justice for failure to implement the 2001 “fair value” Directive (2001/65/EC) on accounting rules. These Member States failed to give a satisfactory reply to the reasoned opinions sent in July 2004 (see IP/04/984). In addition, the European Commission has sent reasoned opinions asking Germany to write this Directive into national law and the United Kingdom to implement it in Gibraltar.
The Directive amends three existing Accounting Directives, on annual accounts (78/660/EEC), consolidated accounts (83/349/EEC) and annual and consolidated accounts of banks and other financial institutions (86/635/EEC). These Directives define which types of companies have to produce accounts, establish which format should be used for the profit and loss account and the balance sheet and lay down which valuation principles should be applied. The Directives also impose requirements to disclose the accounts.
Directive 2001/65/EC requires Member States to permit or require in respect of all companies or any classes of companies the application of “fair values” for certain financial instruments, including derivatives. It aligns the provisions of the Accounting Directives with existing international standards on the valuation of financial instruments. If it is not applied on time across the EU, this could distort the level playing field for businesses in terms of financial reporting requirements and options and make it more difficult for investors to compare company results.
Belgium, Ireland, the Netherlands and Finland – the other Member States who received reasoned opinions in July 2004 - have now implemented the Directive in national law or will do so in the near future.
System of recognition of professional qualifications: Belgium, Germany, Greece, France and Austria
The Commission has decided to refer Belgium, Germany, Greece, France and Austria to the Court as each of these Member States has informed the Commission of the adoption of only part of the set of national measures necessary to implement Directive 2001/19/EC on the mutual recognition of professional qualifications.
The deadline agreed by Member States themselves for writing this Directive into national law was 1 January 2003. The Directive is part of the “SLIM” initiative to simplify single market legislation. It makes it considerably easier to keep up to date the lists of national qualifications which can be recognised automatically in other Member States and overhauls the workings of the overall system for the recognition of professional qualifications.
As long as it is not implemented fully by all Member States, some professionals will not be able to take advantage as easily or as quickly as they should of their right to work in other EU Member States based on their original qualification from their home country. Users of the services of such professionals will not have as wide a choice of providers as they should.
For the latest information on proceedings concerning all Member States, consult the following site: