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2513rd Council meeting - Economic and Financial Affairs - Luxembourg, 3 June 2003

European Council - PRES/03/149   03/06/2003

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

C/03/149

Luxembourg, 3 June 2003

9844/03 (Presse 149)

2513rd Council meeting - Economic and Financial Affairs - Luxembourg, 3 June 2003

President :

Mr Nikos CHRISTODOULAKIS

Minister for Economic Affairs and Finance of the Hellenic Republic

CONTENTS (1)

PARTICIPANTS 3

ITEMS DEBATED

Stability and Growth Pact : IMPLEMENTATION OF THE EXCESSIVE DEFICIT PROCEDURE FOR FRANCE 5

Preparation of the THESSALONIKI European Council (20-21 june 2003) COUNCIL REPORT ON BROAD ECONOMIC POLICY GUIDELINES 8

FOLLOWUP OF THE MONTERREY CONFERENCE 10

FINANCIAL SERVICES ACTION PLAN 10

     Halfyearly Commission report on the Financial Services Action Plan 10

     Investment Services Directive 11

     Tracking financial integration 11

     Mandatory registration of EU auditors with the US PCAOB 12

ITALIAN REQUEST CONCERNING A DECISION UNDER ARTICLE 88(2) 12

Tax issues 13

ANY OTHER BUSINESS 16

     Negotiations with Switzerland on fraud 16

     Environmental liability 16

ITEMS APPROVED WITHOUT DEBATE

ECOFIN

  • Computerising the movement and surveillance of excisable products * I

EUROPEAN AGENCIES *

PARTICIPANTS

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

Belgium:

Mr Jan DE BOCKAmbassador, Permanent Representative
Denmark:
Mr Thor PEDERSENMinister for Finance
Germany:
Mr Wilhelm SCHÖNFELDERAmbassador, Permanent Representative
Greece:
Mr Nikos CHRISTODOULAKISMinister for the National Economy and Finance
Spain:
Mr Rodrigo DE RATO Y FIGAREDOSecond Deputy Prime Minister and Minister for Economic Affairs
France:
Mr Francis MERMinister for Economic Affairs, Finance and Industry
Ireland:
Mr Charlie McCREEVYMinister for Finance
Italy:
Mr Giulio TREMONTIMinister for the Economy and Finance
Luxembourg:
Mr Jean-Claude JUNCKERPrime Minister, Minister for Finance
Mr Henri GRETHENMinister for Economic Affairs
Netherlands:
Mr Gerrit ZALMMinister for Finance
Austria:
Mr Karl-Heinz GRASSERFederal Minister for Finance
Portugal:
Ms Manuela FERREIRA LEITEMinistra de Estado, Minister for Finance
Finland:
Mr Antti KALLIOMÄKIDeputy Prime Minister, Minister for Finance
Sweden:
Mr Bosse RINGHOLMMinister for Finance
United Kingdom:
Mr Nigel SHEINWALDAmbassador, Permanent Representative

* * *

Commission:

Mr Frits BOLKESTEINMember
Mr Pedro SOLBESMember
Ms Michaele SCHREYERMember

* * *

Other participants:

Mr Philippe MAYSTADTPresident of the European Investment Bank
Mr Caio KOCHWESERChairman of the Economic and Financial Committee
Mr Jan Willem OOSTERWIJKChairman of the Economic Policy Committee
Mr Tomasso PADOA-SCHIOPPAMember of the Executive Board of the European Central Bank

The Governments of the Acceding States were represented as follows:

Czech Republic :

Mr Zdeneek HRUBYDeputy Minister for Finance
Estonia :
Mr Tõnis PALTSMinister for Finance
Cyprus :
Mr Marcos KYPRIANOUMinister for Finance
Latvia :
Mr Valdis DOMBROVSKISMinister for Finance
Lithuania :
Ms Dalia GRYBAUSKAITEMinister for Finance
Hungary :
Mr Csaba LÁSZLÓMinister for Finance
Malta:
Mr John DALLIMinister for Finance and Economic Affairs
Poland :
Mr Ryszard MICHALSKIUnder-Secretary of State, Ministry of Finance
Slovakia :
Mr Ivan MIKLOŠDeputy Prime Minister and Minister for Finance
Slovenia :
Mr Dušan MRAMORMinister for Finance

ITEMS DEBATED

Stability and Growth Pact : IMPLEMENTATION OF THE EXCESSIVE DEFICIT PROCEDURE FOR FRANCE

The Council adopted a Decision on the existence of an excessive deficit in France and, with Denmark and the Netherlands voting against, a Recommendation to France with a view to bringing the situation of its excessive deficit to an end. France decided to make its Recommendation public.

"COUNCIL RECOMMENDATION TO FRANCE with a view to bringing an end to the situation of an excessive government deficit - Application of Article 104(7) of the Treaty

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 104(7) thereof,

Having regard to the recommendation from the Commission under Article 104(7) and Article 104(13),

Whereas:

    In stage three of Economic and Monetary Union (EMU), Member States according to Article 104 of the Treaty shall avoid excessive government deficits.

    (2) The Stability and Growth Pact is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation.

    (3) The Amsterdam Resolution of the European Council on the Stability and Growth Pact of 17 June 1997 solemnly invites all parties, namely the Member States, the Council and the Commission to implement the Treaty and the Stability and Growth pact in a strict and timely manner.

    (4) The Council has decided, in accordance with Article 104 (6), that an excessive deficit exists in France.

    (5) Having decided on the existence of an excessive deficit in France, the Council, in accordance with Article 104(7) of the Treaty and Article 3(4) of Regulation (EC) 1467/97, shall adopt a Recommendation establishing a deadline of four months at the most for effective action to be taken by France to correct the excessive deficit position; whereas the Council shall establish a deadline of 3 October 2003 at the latest for the French government to take measures to bring the existence of an excessive deficit to an end within the deadline established by this Council Recommendation.

    (6) Article 3(4) of Regulation (EC) 1467/97 requires that the Recommendation adopted by the Council in accordance with Article 104(7) also establishes a deadline for the correction of the excessive deficit, which should be completed in the year following its identification.

    (7) In accordance with Article 104(12) of the Treaty, a Council decision under Article 104(6) on the existence of an excessive deficit will only be abrogated if the excessive deficit, in the view of the Council, has been corrected; whereas the Council will take into account compliance with the recommendation made under Article 104(7) when taking decisions in accordance with Article 104(12).

    (8) In January 2003, the Council adopted a recommendation sending an early warning to France in order to avoid the occurrence of an excessive deficit in 2003(2), in accordance with Article 99(4) of the Treaty and Article 6(2) of the Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies. In this recommendation, the Council stated that "the French government should take all the appropriate measures in order to ensure that the general government deficit does not breach the 3% of GDP threshold in 2003", and that "adopting measures apt to improve the cyclically-adjusted budgetary position by at least 0,5 percentage point of GDP would not only reduce the risk for the general government deficit to breach the 3% of GDP threshold in 2003, but also contribute to resuming a budgetary consolidation path towards a close to balance position as from 2003".

    (9) In February 2003, the French authorities decided, in order to control State expenditure in 2003, to put in reserve €4 billion (0.25% of GDP) on the State budget, of which €1,44 billion (0.1% of GDP) were cancelled in March; besides, the French authorities decided, in order to control health expenditure, several measures, such as a reduction in the reimbursement rate of some drugs of limited medical utility. When presenting their new official forecast in March 2003, the French authorities projected real GDP growth in 2003 at 1.3% and an improvement in the cyclically-adjusted general government balance by 0.1 percentage point of GDP in 2003; whereas, in the same forecast, the general government deficit in France for 2003 was projected to reach 3.4 per cent of GDP.

    (10) In the view of the Council, budgetary consolidation measures should secure a lasting improvement in the general government balance, while being geared towards enhancing the quality of the public finances and reinforcing the growth potential of the economy,

HEREBY RECOMMENDS:

    the French authorities to put an end to the present excessive deficit situation as rapidly as possible and by 2004 at the latest, in accordance with Article 3(4) of Council Regulation (EC) No 1467/97. The Council establishes the deadline of 3 October 2003 for the French government to take appropriate measures to this end;

      2. the French authorities to achieve a significantly larger improvement in the cyclically-adjusted deficit in 2003 than that currently planned;

      3. the French authorities to implement measures ensuring that the cyclically-adjusted deficit is reduced in 2004 by 0.5% of GDP, or by a larger amount, so as to ensure that the cumulative improvement in 2003-2004 is enough to bring the nominal deficit below 3% in 2004 at the latest;

      4. that France limits the increase in the general government gross debt to GDP ratio in 2003.

In addition, the Council:

  • notes the commitment of the French authorities to ensure that the budgetary consolidation continues in the years after 2004 as reflected by the December 2002 update of the Stability Programme, namely through a reduction in the cyclically-adjusted budgetary deficit by at least 0.5 percentage point of GDP per year, in order to move decisively towards the medium term position of government finances close to balance or in surplus and bring back the debt ratio to a declining path;

  • notes the commitment of the French authorities to ensure a tighter control of expenditures in 2003;

  • and welcomes the commitment of the French government to achieve the pension reform already in process to secure the long-term sustainability of public finances.

This recommendation is addressed to the French Republic.

Done at Luxembourg,

    For the Council

           The President"

"Declaration by the Netherlands:

  • In October 2002, the Eurogroup agreed that all countries which are not close to balance or in surplus, should bring down their cyclicallyadjusted deficit by at least 0.5% on an annual basis starting in 2003. Furthermore, the Eurogroup agreed that countries facing an excessive deficit should do more than this 0.5%. This agreement was confirmed by the European Council of March 2003.

  • Last January, the ECOFIN Council, acting on the basis of a Commission proposal, issued an early warning to France. In order to prevent a breaching of the 3% threshold for the deficit in 2003, the Council urged France to bring down its cyclicallyadjusted deficit by at least 0.5% in 2003.

  • Since then, both the structural and the actual deficit regarding 2002 have further deteriorated by 1/2 to 3/4% of GDP and the deficit has breached the 3% threshold. With a view to these developments, the Netherlands is of the opinion that France should bring down its structural deficit by at least 0.5% of GDP this year. Bearing in mind the efforts made by Portugal (1.5% of GDP of corrective measures in one year) and Germany (1% of GDP of measures in 2003), the Netherlands cannot support a different treatment in the case of France and therefore did not vote in favour of the recommendation as proposed by the Commission."

Preparation of the THESSALONIKI European Council (20-21 june 2003) COUNCIL REPORT ON BROAD ECONOMIC POLICY GUIDELINES

The Council adopted its report on the Broad Economic Policy Guidelines (BEPGs) (for the 2003-2005 period) and decided to forward it to the Thessaloniki European Council (20 June 2003).

The BEPGs have been drafted on the basis of a Commission Recommendation prepared in the context of guidance received from the Ecofin Council through its Key Issues Paper and from the Brussels European Council.

The BEPGs are accompanied by a cover note which highlights the political priorities underlining this year's BEPGs and will serve to focus the attention of both the European Council and the general public on the key issues.

In this cover note, the Council draws specific attention to three main priorities for policy action, namely:

  • Giving priority to growth in Europe,

  • Reforms for more and better jobs, and

  • Reforming pensions and health care systems.

Cover note : Strengthening the EU's Economy :

"In presenting these BEPGs to the Heads of State and Government, we, the Ministers of Economy and Finance, wish to draw specific attention to three main priorities for policy action in the coming year, namely 1) promoting growth, 2) increasing the flexibility of our labour markets, and 3) ensuring the sustainability of our public finances. This will also help to better communicate to the citizens of Europe the urgent need to modernise our economies.

It is essential to achieve higher and sustainable growth in our economies through appropriate macro-economic policies and structural reforms. We have made progress with the Lisbon economic reform agenda, but much remains to be done. We must step up the pace of reform and achieve more flexible economies that show a stronger resilience in the face of uncertainty and shocks.

Timely and effective implementation of the BEPGs is of crucial importance for confidence and growth. The ECOFIN Council and the Eurogroup have a vital role to play in enabling EU Member States and the Commission to jointly monitor and encourage implementation by all policy actors.

1) Giving priority to growth in Europe

Looking at the prospects for economic activity this year, we see the most promising approach to increase growth performance and its potential in mutually reinforcing growth- and stability-oriented macroeconomic policies and structural reforms. Price stability, including labour cost developments that are in line with productivity developments, and sound public finances are pre-conditions for the restoration of confidence. Therefore, we need to achieve an appropriate balance of monetary and fiscal policies to provide a platform for the strengthening of domestic demand, job creation and growth. We are committed to the implementation of the policy framework endorsed by the Spring European Council.

In addition to sound macroeconomic policies, making Europe the most competitive and dynamic knowledge-based economy in the world requires a stepping up in investment in human and physical capital. In this context, the EU and Member States should create framework conditions that facilitate investment in Research and Development as well as in infrastructure. Member States should lift barriers to the economy-wide application of technology and should also foster public-private links to exploit research findings. Furthermore, Member States need to prioritise the involvement of SMEs in R&D through their participation in integrated projects. The completion of the internal market is also key to increase the competitiveness of industry, thereby fostering productivity and business dynamism. In particular, a fully integrated financial market will help to channel savings efficiently into productive investment.

2) Reforms for more and better jobs

Increasing employment in Europe will require far-reaching structural reforms. Our labour markets must become more efficient, inclusive and adaptable, with more and better employment opportunities for all. Action is urgently needed to make work pay so that people seeking work are not discouraged by the prospect of losing benefits and paying higher taxes. For most Member States, this implies undertaking tax-benefit reforms to reduce non-wage labour costs, and to increase incentives to take up employment. In establishing security and minimum standards for workers, we must strike a balance favourable to employment creation allowing flexibility for firms to respond to changing economic conditions. A key objective is to increase labour market participation, particularly amongst women, the over-50s, the low-skilled and the long-term unemployed. Life-long learning and constant upgrading of skills are key for higher productivity and better jobs. We also need to encourage closer co-operation in skills standards across Europe, so that qualifications and experiences are widely recognised and mobility is facilitated.

3) Reforming pensions and health care systems

Europe will face major demographic changes in the years to come, which will put increasing pressure on public finances. To avoid leaving an unsustainable burden for future generations, most Member States need, on top of further consolidating their public finances and raising employment rates, to engage in far-reaching pension and health care reforms now. The demographic window of opportunity for the phasing-in of effective reform is closing rapidly. Reform action is of utmost importance. These reforms can be achieved more easily and successfully if implemented in a comprehensive and coordinated way."

It is recalled that, this year, for the first time, the guidelines have been prepared as a part of a coordinated 'Guidelines Package' alongside the Employment Guidelines. Where appropriate, the BEPGs refer to the Employment Guidelines for more details. In the context of streamlining, the BEPGs are shorter and more concise. They focus on key economic policy issues and priorities for a threeyear period. The number of general guidelines has been drastically reduced and the country-specific guidelines are organised around key economic policy challenges. A specific section on the 'euro area' is included for the first time.

FOLLOWUP OF THE MONTERREY CONFERENCE

The Council took note of developments concerning the commitments made at Monterrey in March 2002 (UN conference on the financing of development) in particular the percentage of gross national income dedicated to overseas development aid in view of the long term objective of 0.7%.

It is recalled that the General Affairs/ External Relations Council, at its session of 19-20 May 2003:

  • welcomed the positive trend perceptible in actions and decisions of the Member States towards meeting the commitments taken in Barcelona, and invited Member States to continue their efforts in that direction;

    • invited the Commission to continue to monitor, on a regular basis, the follow-up of the Monterrey commitments by elaborating, in consultation with Member States, an improved methodology in order to reach the most accurate knowledge on progress achieved by the EU.

FINANCIAL SERVICES ACTION PLAN

  • Halfyearly Commission report on the Financial Services Action Plan

The Council took note of the eighth biannual Commission progress report on the Financial Services Action Plan (FSAP).

The report makes a generally positive assessment of the state of play of implementation of the FSAP, while at the same time highlighting a number of areas where more rapid progress will be needed in the near future in order to meet the deadlines of the action plan.

The emphasis is placed on the fact that there are nine months left to complete the remaining legislative proposals so that the FSAP can be effectively implemented by 2005. April 2004 is the final date for adoption of all measures, to allow 18 months for transposition. Progress since the least report in December has been impressive: up to now 34 of the 42 original measures have been finalised. However a final sustained effort is required to conclude a number of key issues and to close outstanding discussions.

It is recalled that, twice a year, normally in June and December, the Commission presents a progress report on the implementation of the FSAP.

  • Investment Services Directive

The Council took note of a Presidency report on the progress made on the Investment Services Directive (ISD) and agreed that work should continue with a view to reaching an agreement during the Italian Presidency.

It is recalled that in November 2002 the Commission presented its proposal for a Directive of the European Parliament and the Council on investment services and regulated markets. The proposal aims at establishing a harmonised set of high-level principles for the authorisation, regulation and supervision of investment firms and regulated markets, so that:

    the protection of investors and market integrity are enhanced, and

    the promotion of fair, transparent, efficient and integrated financial markets is strengthened.

These goals are proposed to be implemented by the development of ground-rules governing the negotiation and execution of investor's orders in financial instruments on organised trading systems and other venues, including investment firms.

  • Tracking financial integration

The Council took note of an interim report on possible indicators of progress in realising economic benefits and invited the Financial Services Committee to examine it further.

It is recalled that the ECOFIN Council in July 2000 requested the Commission to propose possible indicators of progress in realising economic benefits of an integrated financial services sector. Following this, the Commission has drawn up a report with a preliminary list of indicators.

The objective of the indicators is to provide a regular policy guidance tool for understanding deficiencies in the financial integration process and prioritising areas for remedial action.

The recommended indicators can be divided into three groups:

  • Financial integration indicators on the convergence of interest rates and the extent of cross-border activity;

  • Efficiency indicators on cost-efficiency, profitability and market power and

  • Financial stability indicators on consolidation and cross-sector linkages.

  • Mandatory registration of EU auditors with the US PCAOB

    The Council, as regards the so-called Sarbanes-Oxley Act, according to which all European audit firms must register with the United States Public Company Accounting Oversight Board (US PCAOB), adopted the following declaration:

      "The ministers of Finance of the European Union firmly oppose the obligatory registration of European Union audit firms with the United States Public Company Accounting Oversight Board (PCAOB).

      The PCAOB's registration process is burdensome, costly and unnecessary given that, within the EU, all Member States already have in place, or are putting in place, arrangements for auditor regulation and enhanced corporate governance which offer an equivalent level of protection for investors to that provided for under the Sarbanes-Oxley Act.

      The European Union therefore requests a full exemption for its audit firms from the PCAOB registration process as permitted under section 106(c) of the Sarbanes-Oxley Act.

      Ministers note that the PCAOB's revised registration system for public accounting firms reflects some of the concerns raised by the EU, and elsewhere around the world, during consultation. We welcome those elements. However, the potential implications of the PCAOB's audit registration procedure (e.g. PCAOB oversight of EU audit firms, PCAOB inspection, PCAOB sanctions and PCAOB access to confidential EU audit working papers) are unacceptable given the major conflicts of law that may ensue. Ministers urge the SEC and PCAOB to reconsider, urgently, this draft policy in its entirety and accept a moratorium to negotiate with the European Union, a mutual recognition agreement based on home country control which is the only way to achieve an effective system of public oversight to protect investors. To this end, the ECOFIN Council requests the European Commission on behalf of the European Union to continue discussions with the SEC and the PCAOB."

    The Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Slovenia associated themselves with the Council declaration.

    ITALIAN REQUEST CONCERNING A DECISION UNDER ARTICLE 88(2)

    The Council, with Denmark and Ireland abstaining, reached political agreement on a draft Council Decision on the compatibility with the common market of an aid that the Italian Republic intends to grant to its milk producers.

    This Decision will allow Italy to substitute itself for the payment of the milk levy by producers for past overproduction and to recuperate the advanced money from the producers. The Italian producers will have to repay their debt by way of deferred payment over 14 years without interest. Repayment shall be in full by yearly instalments of equal size.

    The Council instructed the Permanent Representatives Committee to finalise the text of the Decision with a view to adopting it before the end of June.

    Tax issues

    The Council adopted the "Tax Package": In doing so, the Council:

    • adopted the Council Directive on taxation of savings income in the form of interest payments and the Council Directive on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States as respectively set out in 7242/03 FISC 37 + COR 1 (it) + COR 2 (da) and 5926/3/03 FISC 13 + REV 3 COR 1 (it) + REV 4 (da) + REV 4 COR 1 (da) + REV 5 (sv),

    • agreed to the Resolution of the Council and of the representatives of the governments of the Member States, meeting within the Council on taxation of savings income in the form of interest payments, as set out in 7248/03 FISC 38 + COR 1 (it), and

    • took note of the following statements for the Council minutes.

    Statements for entry in the minutes of the Council:

    "With regard to the Directive on taxation of savings:

      The Council reaffirms that the exchange of information, on as wide a basis as possible, is to be the ultimate objective of the European Union in line with international developments.

      The Council assesses that sufficient reassurances have been obtained with regard to the application of the same measures applying the same procedures as the 12 Member States or as Austria, Belgium and Luxembourg, in all relevant dependent or associated territories (the Channel Islands, Isle of Man, and the dependent or associated territories in the Caribbean) and asks the Member States concerned to ensure that all relevant dependent or associated territories will apply those measures from the date of implementation of the Directive, it being understood that, if and when Austria, Belgium and Luxembourg will implement automatic exchange of information, any territory applying the withholding tax will also implement automatic exchange of information from the same date as those Member States.

      The Council states that chapter III with the exception of Articles 14 and 15 of the Directive shall not be granted to the new Member States.

      The Council calls on the Commission to continue negotiations, in close conjunction with the Presidency of the Council, with the Swiss Confederation, the Principality of Liechtenstein, the Republic of San Marino, the Principality of Monaco, the Principality of Andorra and the United States of America, in order to press for the exchange of information as the ultimate objective of the European Community, and to report back to the Council by 31 December 2006 on the progress of those negotiations.

      The Council also calls on the Commission, during the transitional period referred to in Article 10 of the Directive, to enter into discussions with other important financial centres with a view to providing the adoption by those jurisdictions of measures equivalent to those to be applied within the Community.

      Austria states that the implementation of an automatic exchange of information requires, and the implementation of a withholding tax of 35% might require, the modification of the Austrian Constitution. Therefore the agreement of Austria to the relevant provisions, is subject to an approval by the Austrian Parliament.

    WITH REGARD TO THE DRAFT AGREEMENT WITH SWITZERLAND ON SAVINGS TAXATION:

      The Council states the draft agreement with Switzerland, as submitted by the Commission on 28 May 2003, including a provision concerning the competent authority in Gibraltar, constitutes the final offer for an agreement between the EU and this country.

        The four elements of this agreement relating to the Savings Taxation constitute also the basis for agreements between the European Union and Liechtenstein, Andorra, Monaco and San Marino.

      The Council notes that the Community does not have exclusive competence to conclude an agreement with Switzerland on the tax treatment of dividends and of interest and royalty payments as mentioned in article 15 of the draft agreement. Delegations agree nevertheless, by way of exception and without creating a precedent, that Member States will not exercise their competence in this particular case.

    The Council and the Commission declare that the exercise of competence by the Community in respect of article 15 of the agreement with Switzerland does not affect existing bilateral agreements with other third countries and Member States maintain their competence to conclude bilateral agreements with other third countries on the tax treatment of dividends and of interest and royalty payments between companies.

      The Netherlands delegation states that, in its view, it is understood that the Member States maintain their competence to conclude more favourable bilateral agreements with Switzerland in the future on the tax treatment of dividends and of interest and royalty payments.

        The Council encourages the Commission to finalise, in close conjunction with the Presidency of the Council, the draft agreements with the aforementioned European third countries as soon as possible.

    WITH REGARD TO THE DIRECTIVE ON INTEREST/ROYALTIES:

      The Council and the Commission agree that the benefits of the Interest and Royalty Directive should not accrue to companies that are exempt from tax on income covered by that Directive.

      The Council invites the Commission to propose any necessary amendments to this Directive in due time.

    WITH REGARD TO THE CODE OF CONDUCT :

    The Council

      Welcomes the progress achieved by the Code of Conduct Group (Business Taxation) as set out in its report (7018/1/03 FISC 31 REV 1 (en)).

      Notes that the descriptions in Annex 1 of 14812/02 FISC 299, as updated by the descriptions in Annex A of 7018/1/03 FISC 31 REV 1 (en), form an agreed basis for the evaluation of rollback.

      Notes that the Code Group has considered the proposed revised or replacement measures of Member States and of dependent or associated territories for those listed in Annex C of SN 4901/99 against the established criteria of the Code of Conduct and, as set out in Annex B of 7018/1/03 FISC 31 REV 1 (en), has found that none of these are harmful within the meaning of the Code.

      Agrees that the proposed revised or replacement measures are adequate to achieve rollback of all the harmful features of the 66 measures listed in Annex C of SN 4901/99.

      Agrees to an extension of benefits beyond the end of 2005 as set out in paragraphs 15 and 17 of the Code of Conduct Group's report (7018/1/03 FISC 31 REV 1 (en)) and in paragraph 10 of the Annex to 5566/03 FISC 8.

      Approves the proposals for exchange of publicly available information arising from the Group's work on transparency and exchange of information, as set out in paragraphs 21 and 22 of 8848/02 FISC 129.

      Approves the proposals for the exchange of information in individual cases arising from the Group's work on transparency and exchange of information in the area of transfer pricing, as set out in 11077/02 FISC 208.

      Reaffirms its request to the Group to monitor standstill and the implementation of rollback and report to the Council by the end of the year."

    The Swedish delegation declares that the rollback proposals concerning the tax measures that are referred to in the reservations from the Swedish delegation to the Code of Conduct Group's report (7018/03 FISC 31) are insufficient. Nevertheless, considering the importance of the fact that the tax package can be adopted, Sweden can accept the agreement as a whole.

    The Council agrees, due to exceptional circumstances, to take a favourable Decision under Article 88 (2) third sub-paragraph of the Treaty in response to the Belgian request regarding the Belgian Coordination centres regime, which was submitted to the Council on 26 May 2003. The Council invites COREPER to take all necessary steps with a view to allowing the Council to adopt the envisaged Decision as soon as possible, and in any event before the end of June 2003.

    The Austrian delegation recalls the necessity for a rapid adoption of the forthcoming Commission proposal with regard to cross-border leasing."

    ANY OTHER BUSINESS

    • Negotiations with Switzerland on fraud

    The Council, following an oral presentation by Commissioner SCHREYER, took note of the state of play concerning the ongoing negotiations with Switzerland on fraud.

    It is recalled that the EU and Switzerland are currently holding negotiations on a large number of fields, including taxation of savings, the participation of Switzerland in the Schengen Dublin acquis and the fight against fraud and other illegal activities affecting the Communities' and Switzerland's financial interests.

    The main objective of the EU in the negotiation on fraud is to provide for the fullest possible cooperation between the EU and its Member States, on the one hand, and Switzerland, on the other hand, in the fight against fraud and any other illegal activities affecting the financial interests of the contracting parties.

    • Environmental liability

    At the request of the French delegation, the Council held an exchange of views on the draft Directive on environmental liability.

    It is recalled that after two years, the negotiations concerning this Directive are entering a decisive phase on the eve of the forthcoming Environment Council meeting on 13 June 2003.

    ITEMS APPROVED WITHOUT DEBATE

    ECOFIN

    Computerising the movement and surveillance of excisable products *

    (Public deliberation)

    The Council approved the amendments proposed at second reading by the European Parliament on a Proposal for a Decision on computerising the movement and surveillance of excisable products, with the Irish and United Kingdom delegations voting against and the Luxembourg delegation abstaining. (doc. 9147/03 ADD 1)

    Consequent upon the Council's approval of all of the European Parliament's amendments (3), the Decision is deemed to have been adopted in the form of the amended common position (4) in accordance with Article 251(3) of the EC Treaty.

    Once the legislative act has been signed by the President of the European Parliament, the President of the Council and the SecretariesGeneral of the two institutions, the legislative act will be published in the Official Journal of the European Communities.

    EUROPEAN AGENCIES *

    (Public deliberation)

    The Council adopted four common positions relating to the following European bodies:

       European Environment Agency and the European Environment Information and Observation Network

      (doc. 8239/03 + ADD 1 + ADD 2)

       European Food Safety Authority

    (doc. 8240/03 + ADD 1 + ADD 2)

     European Aviation Safety Agency

    (doc. 8241/03 + ADD 1 + ADD 2)

     European Maritime Safety Agency

    (doc. 8242/03 + ADD 1 + ADD 2)

    _______________________

    (1) ?Where declarations, conclusions or resolutions have been formally adopted by the Council, this is indicated in the heading for the item concerned and the text is placed between quotation marks.?The documents whose references are given in the text are available on the Council's Internet site HYPERLINK "http://register.consilium.europa.eu/scripts/utfregisterDir/WebDriver.exe?MIval=advanced&MIlang=EN&fc=REGAISEN&srm=5&ssf=&mt=128&md=100"http://consilium.europa.eu.?Acts adopted with statements for the Council minutes which may be released to the public are indicated by an asterisk; these statements are available on the above mentioned Council Internet site or may be obtained from the Press Office.

    (2) OJ L 34, 11.2.2003.

    (3) Doc. 8292/03 CODEC 439 FISC 63.

    (4) OJ C 64 E, 18.3.2003, p. 1.


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