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2345th Council meeting - ECOFIN - Brussels, 7 May 2001

European Council - PRES/01/172   07/05/2001

Other available languages: FR DE DA ES NL IT SV PT FI EL

C/01/172

8444/01 (Presse 172)

2345th Council meeting

- ECOFIN -

Brussels, 7 May 2001

President :

Mr Bosse RINGHOLM

Minister for Finance of the Kingdom of Sweden

CONTENTS

PARTICIPANTS 3

ITEM DEBATED

FOLLOW-UP OF THE STOCKHOLM EUROPEAN COUNCIL 5

BROAD ECONOMIC POLICY GUIDELINES (BEPG) 2001 6

ECONOMIC DIALOGUE BETWEEN EU AND RUSSIA 7

PRELIMINARY DRAFT EU BUDGET FOR 2002 8

PENSIONS 9

    - INSTITUTIONS FOR OCCUPATIONAL RETIREMENT PROVISION : DRAFT DIRECTIVE - COUNCIL CONCLUSIONS 9

    - TAXATION OF PENSIONS 10

FINANCIAL SERVICES POLICY GROUP (FSPG) REPORT ON E-COMMERCE AND FINANCIAL SERVICES - COUNCIL CONCLUSIONS 11

ITEMS DISCUSSED OVER LUNCH 13

MACROECONOMIC DIALOGUE AT MINISTERIAL LEVEL 13

ITEMS APPROVED WITHOUT DEBATE

ECOFIN

  • Securities listing I

EXTERNAL RELATIONS

  • Relations with the ACP States I

  • Relations with Liberia I

  • Relations with the Associated CCEE I

  • Antidumping - imports of urea ammonium nitrate solutions from Poland II

  • Antidumping - imports of urea from Russia II

  • Antisubsidy - imports of synthetic fibres of polyester from Australia, Indonesia and Taiwan II

EMPLOYMENT/ SOCIAL POLICY

  • Social Policy Agenda - Publication in the Official Journal III

APPOINTMENTS

  • Committee of the Regions IV

DECISION ADOPTED BY WRITTEN PROCEDURE

  • ADAPTATION OF THE FINANCIAL PERSPECTIVES TO IMPLEMENTATION LEVELS IV

_________________

For further information call 02 285 8414, 02 285 6423 or 02 285 7459

PARTICIPANTS

The Governments of the Member States and the European Commission were represented as follows:

Belgium :

Mr Didier REYNDERSMinister for Finance
Denmark :
Ms Marianne JELVEDMinister for Economic Affairs
Mr Michael DITHMERState Secretary for Economic Affairs
Germany :
Mr Hans EICHELFederal Minister for Finance
Mr Caio KOCH-WESERState Secretary, Federal Ministry of Finance
Greece :
Mr Yannos PAPANTONIOUMinister for the National Economy and Finance
Spain :
Mr Rodrigo de RATO y FIGAREDOSecond Deputy Prime Minister and Minister for Economic Affairs
France :
Mr Pierre VIMONTAmbassador, Permanent Representative
Ireland :
Mr Charlie McCREEVYMinister for Finance
Italy :
Mr Roberto NIGIDOAmbassador, Permanent Representative
Luxembourg :
Mr Jean-Claude JUNCKERPrime Minister, Minister for Finance
Mr Henri GRETHENMinister for Economic Affairs, Minister for Transport
Netherlands :
Mr Gerrit ZALMMinister for Finance
Austria :
Mr Alfred FINZState Secretary, Federal Ministry of Finance
Portugal :
Mr Joaquim PINA MOURAMinister for Finance
Mr Manuel BAGANHAState Secretary for the Treasury and Finance
Finland :
Mr Sauli NIINISTÖMinister for Finance
Mr Johnny ÅKERHOLMUnder-Secretary of State, Ministry for Finance
Sweden :
Mr Bosse RINGHOLMMinister for Finance
Mr Sven HEGELUNDState Secretary to the Minister for Finance
United-Kingdom :
Mr Gordon BROWNChancellor of the Exchequer
* * *
Commission :
Mr Frits BOLKESTEINMember
Ms Michaele SCHREYERMember
Mr Pedro SOLBES MIRAMember

* * *

Other participants :

Mr Christian NOYERVice-President of the European Central Bank
Mr Philippe MAYSTADTChairman of the European Investment Bank
Mr Mario DRAGHIChairman of the Economic and Financial Committee
Mr Jean-Philippe COTISVice-Chairman of the Economic Policy Committee

FOLLOW-UP OF THE STOCKHOLM EUROPEAN COUNCIL

The Council heard a report from the Chairman of the Economic Policy Committee, Mr Jean-Philippe COTIS, on the state of work - as well as the further work programme of his Committee -concerning the Ecofin remit of the Stockholm European Council as identified in the Key Issues Paper, namely the impact of ageing populations on public finances, how to increase labour supply and promote active ageing and on ways to stimulate research and development.

Under this heading, the Council also heard a report by the Presidency and the Commission on their continued contacts with the European Parliament concerning the implementation of the "Lamfalussy" Resolution on financial services. In this context, the Council made clear its support for an understanding at the earliest possible opportunity between the Parliament and the Commission on the outstanding issues related to the proposed new legislative mechanism, at the latest by the Göteborg European Council.

The Council took note of Commissioner Bolkestein's indication that his institution intends to adopt by the end of May two Decisions on the creation of the Committee structure proposed in the Lamfalussy report, namely the European Securities Committee and the European Securities Regulators Committee. It also intends to finalise work on two legislative proposals, one on market abuse and one on common prospectuses, for adoption under the new procedure.

BROAD ECONOMIC POLICY GUIDELINES (BEPG) 2001

The Council heard a presentation by Commissioner Solbes, on the Commission Recommendation for the BEPGs 2001 of the Member States and the Community. The Commission's Recommendation for the 2001 Broad Economic Policy Guidelines has been drafted against the background of the (Ecofin) Council Key Issues Paper of 12 March and the guidance received from the Stockholm European Council.

The new guidelines are based on the assessment of the economic situation and outlook as presented in the Commission's spring 2001 Economic Forecasts. While these take account of a slowdown in growth in 2001 relative to last year as a consequence of the deterioration in the external economic environment, growth is generally expected to remain relatively robust and close to the potential rate in 2001.

The guidelines present a policy strategy to address three main challenges, which are to:

- preserve the economic expansion in the short term;

- increase economic growth potential over the medium-term;

    - enhance the capacity to cope effectively with longer-term structural challenges, including ageing populations.

The Council held a general debate on the Commission Recommendations with the aim of providing political guidance for its detailed examination by the EFC and EPC. The two committees will report back to Ecofin in June, in order to enable the latter to approve the guidelines to be submitted to the Göteborg European Council for endorsement.

During the debate, Ministers generally welcomed the substance and format of the 2001 BEPGs. Certain Ministers commented on the possibility of reducing the number of policy objectives at European level. In this context, the issues of the share of public expenditure in GDP and the growth of public investment were also raised. Ministers also referred to the Stockholm European Council conclusions and underlined in particular the need to pursue vigorous structural reform, inter alia, in the labour, product and capital markets, and to give greater visibility to the goal of boosting sustainable development.

ECONOMIC DIALOGUE BETWEEN EU AND RUSSIA

The Council took note of information provided by the Presidency on the EU Troika visit to Russia on 10 May, composed of its President, Minister Ringholm, Belgian Finance Minister Reynders and Commissioner Solbes, for meetings, in particular, with the Russian Finance and Economic Ministers, the head of the Central Bank and the President of the Parliament.

The Economic Dialogue to be initiated on this occasion provides an opportunity to discuss common economic interests and the possibilities for economic cooperation. It will in particular allow the delegation to assess what progress Russia is making in the implementation of the economic and financial reform programme launched by Finance Minister Kudrin, the possible contribution of the EU to these efforts, in particular through the TACIS programme, and their effects on fostering a positive investment climate.

The visit will also provide an opportunity to discuss with Russia the use of specific EIB loans for projects in the area of the environment.

PRELIMINARY DRAFT EU BUDGET FOR 2002

The Council heard a presentation by Commissioner Schreyer of the main elements of the preliminary draft budget for 2002, which the Commission will formally adopt on 8 May 2001.

The draft for 2002 provides for an amount of €100.3 billion in commitment appropriations, representing an increase of 3,4%, and of €97.7 billion in payments, an increase of 4,8%. The EU budget represents an overall share of 1,07% of the EU GDP. The relatively higher increase of payments than that of commitments was anticipated in the medium-term financial perspective, adopted in Berlin in Spring 1998 and will allow, in particular, a reduction of the backlog of payments for Structural Funds. However, payments remain by €2.5 billion under the ceiling established in Berlin.

In the Commission draft the agricultural budget will grow by 5% (€2.2 billion), mainly as a result of the CAP reform decided in Berlin. Additional expenditure will cover extra costs deriving from the BSE and FMD crises. Given the budgetary uncertainties resulting from the BSE and FMD crises, the Commission will propose a reserve of €1 billion which will still leave a margin of €365 million under the Chapter 1 of the Financial Perspective. The Commission is already considering further proposals in order to reduce the risk of a breach of the agricultural ceiling.

With respect to Structural Funds, the framework of expenditure results from the substantive decisions. However, as during the first year of the application of the Regulation on Structural Funds a large part of the available credits could not be committed, a rebudgetisation has already been agreed by the Budgetary Authority, resulting in an increase of €870 million for 2002.

For internal and external policies and administrative expenditure, the preliminary draft budget foresees appropriate margins under the respective ceilings for these headings.

The Council held a brief exchange of views during which it recalled the need to respect the existing financial perspective.

As regards the budget of the Council, the President indicated that the preliminary draft budget will in particular address the need for implementation of the CFSP whilst fully respecting the principles of budgetary discipline.

PENSIONS

  • INSTITUTIONS FOR OCCUPATIONAL RETIREMENT PROVISION : DRAFT DIRECTIVE - COUNCIL CONCLUSIONS

The Council notes that the demographic challenge is one of the main economic and social issues to be addressed in the first decade of the 21st century. The ageing society calls for clear strategies for ensuring the adequacy of pension systems. These issues are being addressed at both a national level and the EU level. The Stockholm European Council set in train work on the portability of pensions. It also gave a new impetus to economic reform, building on the goals set by the Lisbon European Council. As part of this process, work is under way to put in place a framework for prudential regulation of the activities of institutions for occupational retirement provision (the IORP Directive).

The IORP Directive's main objective is to create a Community prudential legal framework for institutions for occupational retirement provision in a way that is coherent with existing single market legislation while fully respecting the great variety of systems among Member States, particularly as regards supervision, as well as the specific characteristics of IORPs. The framework must aim to ensure a high level of protection of the rights of present and future pensioners, increase the affordability of pension schemes and facilitate cross-border activity by institutions. Member States retain full and sole responsibility for the organisation and reform of their pension systems, which the proposed Directive does not seek to harmonise. In addition, the Directive must not restrict the right for the competent authority in the state of the pension rights holder to effectively apply the labour and social laws of that state.

The Council considers that the Directive should promote:

    a) the affordability of pension schemes and the provision of a high level of protection of the rights of present and future pensioners as well as the facilitation of cross-border activity by IORPs;

    b) the delivery of the European Council's economic reform goals;

    c) cross-border membership based on mutual recognition of national prudential systems complemented by regulatory and supervisory co-operation to ensure effective enforcement of relevant social and labour laws in the state of the pension rights holder.

The Council intends to make every effort to reach political agreement on the basis of the above principles, respecting the timetables of the Financial Services Action Plan and of the report of the Wise Men.

  • TAXATION OF PENSIONS

The Council heard a presentation from Commissioner Bolkestein of his institution's recent Communication on the elimination of tax obstacles to the cross-border provision of occupational pensions. The Commission considered that the following three issues deserved particular attention:

    - the diversity of Member States' rules for deductibility of contributions and taxation of benefits that may lead to double taxation;

    - the unduly restrictive or discriminatory tax rules for deductibility on contributions, because they are contrary to the Treaty freedom of movement of goods, persons, services and capital;

    - the inability of Member States to properly enforce their tax rules if they allow their residents to participate in foreign pension schemes.

The Council asked its competent bodies (the Permanent Representatives Committee and the Working Party on Tax Questions) to examine the Commission Communication in detail and to focus in particular on the proposal for an automatic exchange of information in the area of occupational pension schemes, that would allow Member States to verify compliance of their residents with their tax obligations.

FINANCIAL SERVICES POLICY GROUP (FSPG) REPORT ON E-COMMERCE AND FINANCIAL SERVICES - COUNCIL CONCLUSIONS

The Council

    - welcomes the report of the Financial Services Policy Group on E-Commerce and Financial Services, which contributes to but does not prejudge the outcome of the negotiations, pending in another Council formation, on the Commission's proposal on distance marketing of financial services;

    - considers that the report illustrates that there is a high degree of consensus regarding the objectives for an integrated European market in retail financial services;

    - endorses the strategic three pillar approach set out in order to meet these objectives recognising that consumer confidence in the information society, based on a clear and transparent legal framework, is a precondition for the positive development of electronic commerce;

    - confirms the programme of actions set out in the "Road Map" to a fully integrated European market in retail financial services;

    - agrees that a programme of further convergence in consumer and retail investor protection rules aiming at a higher level of harmonisation should be complemented by additional flanking measures to build consumer confidence;

    - welcomes the Commission's intention i.a. to propose Guidance to Member States on the application of Article 3(4)-(6) of the Electronic Commerce Directive in the area of retail financial services in order to promote understanding of the regulatory framework and to facilitate a surefooted implementation of the place of establishment approach, and commits Member States to working in close cooperation with the Commission in its compilation;

    - calls on all parties involved to work together rapidly in order to secure an integrated European retail market in financial services by 2005.

    Declaration by F, B, ES, GR and P accompanying the Council conclusions

The delegations of France, Belgium, Spain, Greece and Portugal stress that these conclusions do not prejudge the outcome of the negotiations, pending in another Council formation, on the Commission's Directive proposal on distance marketing of financial services.

In this context, they stress the crucial importance of the following elements:

    - The Union should engage into effective harmonisation at the highest level possible of the measures designed to protect the consumers in the field of marketing financial services, in order to ensure the confidence of the consumers in the rules of the integrated financial market, which is the pre-condition to its development; in the meantime, transitional periods should be considered;

    - The full applicability of the reflection period to the benefit of the consumers that are resident in those Member States where it exists;

    - A transparency requirement for consumers, on the applicable law to pre-contractual obligations, should be established.

ITEMS DISCUSSED OVER LUNCH

  • Eurogroup: the Council received the usual debriefing on the work of this body by its President, Minister Reynders of Belgium covering:

      - the usual tour d'horizon on the latest economic developments and outlook in the light, in particular, of the recent Spring meetings of the IMF and the G7 in Washington;

      - structural issues, in the aftermath of the Nice European Council, concerning labour supply and reform of tax and benefit systems specifically in the Euro area;

- the regular update on work concerning the changeover to the Euro.

  • EMU statistics: Ministers heard a report from the EFC on this item and considered in this context still-existing difficulties in certain Member States with regard to fulfilling their obligations in this area.

  • Ukraine: Ministers addressed the question of the EU's preferred creditor status in the Paris Lending Club with respect to restructuring arrangements concerning claims on this country and agreed on how to handle this question with partners in the Paris Club.

* * *

MACROECONOMIC DIALOGUE AT MINISTERIAL LEVEL

A fourth meeting of the macroeconomic dialogue of the Ecofin Troika with social partners at political level took place in the margins of the Council. Discussions covered the Commission's economic Spring forecast and its Recommendation concerning the BEPG, the slowdown of the world economy and its possible consequences on the European economy as well as wage developments.

ITEMS APPROVED WITHOUT DEBATE

ECOFIN

Securities listing

The Council adopted a Directive on the admission of securities to official stock exchange listing and on information to be published on those securities. This Directive consolidates the texts of Directives 79/279/EEC, 80/390/EEC, 82/121/EEC and 88/627/EEC.

EXTERNAL RELATIONS

Relations with the ACP States

The Council approved the EU position ahead of the 26th session of the ACP-EC Council of Ministers on 11 May 2001, in Brussels.

Relations with Liberia

The Council approved a Common Position concerning restrictive measures against Liberia.

The Common Position provides for an arms embargo, a prohibition on the provision of technical training or assistance related to arms, a prohibition on the importation of rough diamonds from Liberia and a visa ban.

Relations with the Associated CCEE

The Council adopted Decisions concerning the participation of Hungary and the Czech Republic in the Community programmes Socrates and Youth.

During 2000 the Association Councils with the various associated CCEE adopted decisions enabling those countries to participate in the second phase of the Socrates programme (and of the Leonardo da Vinci programme) and in the new Youth programme. In the case of Socrates and Youth, however, the decisions established the financial contribution of the countries in question for 2000 only, and provided that the contribution for the remaining years (2001-2006) would be detailed in subsequent decisions. That is the purpose of the present Decisions as far as Hungary and the Czech Republic are concerned. The Decisions will be formally approved by the respective Association Councils.

Antidumping - imports of urea ammonium nitrate solutions from Poland

The Council adopted a Regulation imposing definitive antidumping duties on imports of urea ammonium nitrate solutions originating in Poland.

The amount of the applicable duty per tonne of product shall be as shown below for the products manufactured by the following companies:

Country

CompanyAmount of duty (EUR per tonne)TARIC additional code
POLANDZaklady Azotowe Pulawy SA

Al. Tysiaclecia P.P. 13,

24-110 Pulawy

Poland

19

8 795
Other companies

22

8 900

Antidumping - imports of urea from Russia

The Council adopted a Regulation imposing a definitive antidumping duty on imports of urea originating in Russia.

The amount of the definitive antidumping duty shall be the difference between the minimum import price of €115 per tonne and the net, free-at-Community-frontier price, before duty, in all cases where the latter is less than the minimum import price.

Antisubsidy - imports of synthetic fibres of polyester from Australia, Indonesia and Taiwan

The Council adopted a Regulation amending Regulation (EC) no 978/2000 imposing a definitive countervailing duty on imports of synthetic fibres of polyester originating in Australia, Indonesia and Taiwan.

The duty rate applicable to the net, free-at-Community-frontier, before duty, for products produced by the companies indicated shall be as follows for products originating in:

(1) Australia

Company

Rate of duty

(%)

TARIC additional code
Leading Synthetics Pty Ltd, Melbourne, Victoria6,0A059
All other Australian companies6,0A999

(2) Indonesia

Company

Rate of duty (%)TARIC additional code
PT. Indorama Synthetics TbK Graha Irama, 17th floor Jl. H. R. Rasuna Said Blok X-1 Kav. 1-2 PO Box 3375 Jakarta 129500A051
PT. Panasia Indosyntec TbK Jl. Garuda 153/74 Bandung 401840A052
PT. Susilia Indah Synthetic Fiber Industries Jl. Kh. Zainul Arifin Kompleks Ketapang Indah Blok B 1 n. 23 Jakarta 111400A054
PT. GT Petrochem Industries TbK Exim Melati Building, 9th floor Jl. M. H. Thamrin Kav. 8-9 Jakarta 102300A053
PT. Teijin Indonesia Fiber Corporation TbK 5th floor Mid Plaza 1 Jl. Jend. Sudiman Kav. 10-11 Jakarta 102200A055
All other companies10A999.

EMPLOYMENT/ SOCIAL POLICY

Social Policy Agenda - Publication in the Official Journal

The Council decided to publish the "Social Policy Agenda" in the "C" series of the Official Journal of the European Communities and thus give all the requisite publicity to this text.

The Social Policy Agenda defines for the next five years specific priorities for action for all social policy areas around six strategic orientations, namely:

  • more and better jobs;

  • anticipating and capitalising on change in the working environment by creating a new balance between flexibility and security;

  • fighting poverty and all forms of exclusion and discrimination in order to promote social integration;

  • modernising social protection;

  • promoting gender equality;

  • strengthening the social policy aspects of enlargement and the European Union's external relations.

The Social Policy Agenda was adopted at the Employment and Social Policy Council of 27/28 November 2000 and was endorsed at the highest political level by the Heads of State and Government at the European Council in Nice in December 2000.

(For additional information see also Press release no 13862/00 Presse 454).

APPOINTMENTS

Committee of the Regions

The Council adopted decisions appointing

    - Mr Derek BODEN and Ms Ruth BAGNALL as members of the Committee of the Regions, in place of, respectively, Mr John BATTYE and Ms Jane HORE, for the remainder of their terms of office, which runs until 25 January 2002

    - Mr João Carlos CUNHA SILVA as an alternate member of the Committee of the Regions, in place of Mr José Agostinho GOMES PEREIRA DE GOUVEIA, for the remainder of his term of office, which runs until 25 January 2002.

DECISION ADOPTED BY WRITTEN PROCEDURE

ADAPTATION OF THE FINANCIAL PERSPECTIVES TO IMPLEMENTATION LEVELS

The Council reached agreement, by written procedure on 27 May 2001, on a joint Decision of the European Parliament and the Council on the adaptation of the Financial Perspectives to implementation levels.

In accordance with point 17 of the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure, for the adjustment exercise in 2001 and in the event of delays in the adoption of the programmes for structural operations, the two arms of the budgetary authority undertake to authorise, on a proposal from the Commission, the transfer to subsequent years, in excess of the corresponding expenditure ceilings, of the allocations not used during the financial year 2000.

________________________


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