2537th Council meeting - Economic and Financial Affairs - Brussels, 4 November 2003
European Council - PRES/03/306 04/11/2003
Brussels, 4 November 2003
13689/03 (Presse 306)
2537th Council meeting - Economic and Financial Affairs - Brussels, 4 November 2003
THE EXCESSIVE DEFICIT PROCEDURE FOR FRANCE 6
IMPACT OF AGEING ON PUBLIC FINANCES EPC REPORT 6
HARMONISATION OF TRANSPARENCY REQUIREMENTS 7
STRUCTURAL INDICATORS Council conclusions 7
ROLE OF CUSTOMS IN CONTROLLING EXTERNAL BORDERS Council Conclusions 8
ANY OTHER BUSINESS 9
in the margins of the council: 10
Ministerial Dialogue with acceding and candidate countries on 2003 Pre-accession Economic Programmes (PEPs) 10
ITEMS APPROVED WITHOUT DEBATE
The Governments of the Member States and the European Commission were represented as follows:
The Governments of the Acceding Countries were represented as follows:
In the Ministerial Dialogue on the 2003 Pre-accession Economic Programmes, the Governments of the Candidate Countries were represented as follows:
THE EXCESSIVE DEFICIT PROCEDURE FOR FRANCE
The Council decided to postpone the discussion on the Commission Recommendation for a Council Decision based on Article 104(8) to its meeting on 25 November 2003.
It should be noted that the excessive deficit procedure is governed by Article 104 of the Treaty and by Council Regulation (EC) N°1467/97 of 7 July 1997 on the speeding up and clarifying the implementation of the excessive deficit procedure, which is part of the Stability and Growth Pact. It is completed by the political commitments enshrined in the Resolution of the Amsterdam European Council on the Stability and Growth Pact of 17 June 1997.
Based on the evidence that the Government deficit in France amounted to 3.1 per cent of GDP in 2002, the Commission initiated the Excessive Deficit Procedure for France on 2 April 2003, with the adoption of the report provided for in Article 104(3) of the Treaty. This report concluded that the excess of the French deficit in 2002 over the 3% of GDP Treaty reference value was not temporary and did not result from an unusual event outside the control of the French authorities, nor was it the result of a severe economic downturn within the meaning of the Treaty. The Commission, taking into account the opinion of the EFC, adopted on 7 May 2003 an Opinion stating that an excessive deficit existed in France. The Council decided accordingly, in conformity with Article 104(6), on 3 June 2003. At the same time, the Council adopted a recommendation under Article 104(7) of the Treaty with a view to bringing the situation of excessive deficit to an end. In this recommendation, the Council recommended France to put an end to the excessive deficit situation by 2004 at the latest. The Council established the deadline of 3 October 2003 for the French Government to take appropriate measures to this end. The Council also recommended France to achieve a significantly larger improvement in the cyclically-adjusted deficit in 2003 than that planned at that time, and to limit the increase in the general Government gross debt to the GDP ratio in 2003. These recommendations were confirmed in the Broad Economic Policy Guidelines for 2003 adopted by the Council on 26 June 2003.
On 8 October 2003, the Commission recommended that the Council adopt a decision under Article 104(8) that France has not fulfilled the recommendations addressed to it under Article 104(7) within the period laid down in that Recommendation.
IMPACT OF AGEING ON PUBLIC FINANCES EPC REPORT
The Council endorsed the Economic Policy Committee (EPC) report on the impact of ageing populations on public finances (doc. 14085/03) and confirmed the mandate to the EPC to produce new common budgetary projections by mid-2005 on the basis of the approach outlined in the EPC report.
The Council also invited the EPC to produce a study on economic incentives affecting retirement, in the light of the Lisbon strategy target to raise the employment rates of older workers, whilst making appropriate use of the results of the OECD and of relevant EU Committees.
This study should be presented to the Council by the end of 2004.
The report endorsed today by the Council shows that large demographic changes with significant budgetary effects will take place in coming decades even if there is some uncertainty as to the precise scale of their impact. Overall, the projections of the EPC show that on the basis of current policies, public spending on age-related public expenditures (notably pensions, health care and long-term care) could increase by between 3 and 7 percentage points of GDP by 2050, with the effects taking hold as of 2010.
The EPC report highlights the need for a three-pronged strategy to meet the economic and budgetary consequences of ageing populations, consisting of: faster pace of debt reduction (especially in high debt countries); measures to raise employment rates, especially for older workers and women; and reform of pensions and health care systems.
It should be noted that the ECOFIN Council of May 2003 mandated the EPC to prepare a progress report by November 2003 providing an overview of analyses carried out at EU level to date on the impact of ageing populations on public finances, and examining the merits and limitations of the approach used to assess the sustainability of public finances on the basis of the 2002 stability and convergence programmes.
HARMONISATION OF TRANSPARENCY REQUIREMENTS
The Council, on the basis of a progress report prepared by the Presidency, had a policy debate on the proposal for a Directive on the harmonisation of the requirements with regard to information about issuers whose securities are admitted to trading on a regulated market (doc. 8062/03). The debate focused on the obligation for listed companies to present quarterly financial information.
The proposal, which is part of the Financial Services Action Plan and the Lisbon agenda, complements the International Accounting Standards (IAS) Regulation and the prospectus and market abuse Directives all three recently adopted as well as the Directive on financial instruments markets. The purpose of the proposal is to harmonise across Member States regular reporting requirements and requirements concerning the notification of major holdings.
Due to the rapid development in recent years of financial markets and the emergence of new financial instruments, the new Directive will replace and significantly revise the existing provisions of Directive 2001/34/EC on the admission of securities to official stock exchange listing and on information to be published on those securities. With a view to similar future developments, the proposal is drafted in a manner enabling implementing measures to be adopted by the Commission in relation to several provisions of the Directive.
STRUCTURAL INDICATORS Council conclusions
Referring to the Commission's proposal for the list of structural indicators for the spring report 2004, the Council adopted the following conclusions:
The ECOFIN Council considers that the Commission's shortlist of headline indicators needs to be improved to contain indicators measuring economic reform. The EPC should continue its work with a view to achieving this.
ROLE OF CUSTOMS IN CONTROLLING EXTERNAL BORDERS Council Conclusions
The Council adopted Conclusions on the role of customs in the integrated management of external borders, as follows:
“THE COUNCIL OF THE EUROPEAN UNION,
- the strategic goal set by the Lisbon European Council on 23 and 24 March 2000 for the Union "to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion";
2. WELCOMES the Commission Communication on the role of customs in the integrated management of external borders which complements the earlier communication of May 2002 on the control of persons at external borders;
3. RECOGNISES the central role of customs and the importance of customs cooperation in the control of all kinds of goods crossing EU borders;
4. STRESSES the need to fully integrate safety and security aspects in the daily work of customs and RECOGNISES that this represents a new challenge which requires important adaptations to both the organisational and the legislative framework governing the tasks of customs. Meeting this challenge represents, at the same time, a valuable contribution to the worldwide efforts to secure the supply chain;
5. EMPHASISES the importance, with regard to the management of the external borders and considering the forthcoming enlargement of the European Union, of ensuring optimal, facilitated conditions for a rapid flow of international trade without prejudice to the need for society and the economy to be effectively protected against unfair or illegal operations. Such a balance can only be achieved through well-organised control mechanisms that are based on the concepts of risk analysis and risk selection, on security criteria, and on simplification of customs procedures;
6. RECALLS that the strategic goal set by the Lisbon European Council can only be achieved through a well-functioning internal market. An enhanced legal framework and effective external border controls of movements of goods are therefore essential to protect Community interests and to counter the risk of distortion of competition, in particular resulting from the introduction of harmful or counterfeit goods or other practices incompatible with international trade rules;
7. RECOGNISES the importance of measures to combat fraud against the financial interests of the European Union and the Member States in the context of achieving the objective of ensuring equal conditions of competition in the internal market;
8. EXPRESSES its support for
ANY OTHER BUSINESS
At the request of the Belgian delegation, the Council discussed the possibility of having common model agreements concerning the taxation of savings with associated and dependent territories.
in the margins of the council:
In the margins of the Council, the Economic and Finance Ministers of the EU and the acceding and candidate countries met for their fifth economic policy dialogue meeting.
They examined the 2003 Pre-accession Economic Programmes (PEPs), and approved the following Joint Conclusions:
“Joint conclusions of the Ministerial dialogue between the Economic and Finance Ministers of the EU and the acceding and candidate countries on 4 November 2003
On 4 November 2003, the Economic and Finance Ministers of the EU and of the acceding and candidate countries, along with representatives of the Commission and the ECB, met for their fifth economic policy dialogue.
For the ten acceding countries
Ministers endorsed the Joint Opinions on the 2003 Pre-accession Economic Programmes of the ten acceding countries. On the whole, the programmes describe an ambitious but credible medium-term macro-economic and fiscal framework conducive to strong and sustainable economic growth.
Although the growth of GDP in 2002 in most acceding countries was higher than in the EU, continued sustainable high growth performance will remain necessary for the process of further catching up in income levels. In this respect, Ministers emphasised the continued importance of sound and credible public finances, also to further enhance their long-term sustainability of public finances in the light of the ageing populations and further structural reforms in the acceding countries. This would allow a strengthening of the foundation for macro-economic stability and strong and sustainable growth, in the context of the Lisbon strategy. Ministers also welcomed the progress that most acceding countries have continued to make in the area of disinflation, thus entrenching macro-economic stability and providing an environment for sustained economic growth. To anchor inflation expectations inflation should be kept at low levels. In particular, some acceding countries are still facing the challenges stemming from the ongoing processes of price deregulation and increases in regulated prices. Ministers noted that in some acceding countries current account deficits remain high and might pose a challenge for the medium term. In several countries the relatively high unemployment rate indicate a need for urgent further structural adjustment.
Ministers took note of the plans stated by the authorities of acceding countries in their Pre-accession Economic Programmes regarding the future monetary integration process and pointed out that such plans would be assessed on a case-by-case basis and in accordance with the Treaty provisions and the approach agreed in Athens in April 2003.
Ministers also underlined that acceding countries have now entered a decisive phase of their final preparations regarding the transposition and implementation of the acquis. In accordance with the conclusions of the European Council in Copenhagen and in Thessaloniki, they repeated the great importance attached to the monitoring process and to respect for the commitments made by acceding countries, including the deadlines fixed in the negotiations. They underlined their hope that the Commission's Comprehensive Monitoring Reports will serve as a catalyst for incoming countries to solve all outstanding issues regarding the proper implementation of EU legislation by the date of accession, in particular in the economic and financial field, and that no safeguard clauses will prove necessary.
In particular, Ministers noted the importance of complying with the acquis in the area of capital movements. In a number of acceding countries some residual restrictions on cross-border operations still remain to be lifted in the period before 1 May 2004. Compliance with the acquis concerns not only the abolition of exchange controls per se, but also of restrictions on the underlying operations. Any remaining restrictions must be covered by the exceptions provided for by the Treaty or be justified by overriding requirements of the general interest.
Ministers reiterated their commitment to include Collective Action Clauses in all their international sovereign bond issues and stated that they would expect new Member States to follow up on this commitment.
Ministers noted that further progress has been made regarding the implementation of the Action Plan on Economic, Monetary and Financial Statistics for the acceding countries, which helped to identify six priority areas where countries have to concentrate their efforts in the run-up to accession. However, several countries should urgently complete their efforts if the agreed goals are to be met by 1 May 2004. Substantial efforts are required in the areas of government debt and deficit (all countries should improve compliance with ESA 95 accounting rules), annual national accounts (notably by Poland, Cyprus and Malta), the Harmonised Index of Consumer Prices (notably by Slovakia), balance of payments and international investment position (notably by Hungary, Cyprus, Estonia, Poland, Slovenia and Malta), and external trade statistics (notably by Cyprus). It is also very important that all acceding countries devote sufficient resources to the compilation of all other statistics needed for the Convergence Reports. The acceding countries are invited to urgently step up their efforts in these respects, and the EFC is invited to continue to monitor closely progress made.
For the three candidate countries
Ministers welcomed the 2003 Pre-accession Economic Programmes of the three candidate countries. The programmes describe a medium-term macro-economic and fiscal framework with strong economic growth.
Ministers endorsed the following conclusions as regards the assessment of these programmes:
Ministers invited the Economic Policy Committee to look into the structural policies in Bulgaria, Romania and Turkey and to present a report on this in due course in 2004, also with a view to discussing that report at next year's Joint Ministerial Meeting.”
ITEMS APPROVED WITHOUT DEBATE
Labour force sample survey Public deliberation
The Council adopted a Regulation amending Council Regulation (EC) No 577/98 on the organisation of a labour force sample survey in the Community to adapt the list of survey characteristics (doc. PE-CONS 3672/03).
Financial Regulation for executive agencies
The Council adopted an opinion on the draft Commission Regulation concerning a standard financial regulation for the executive agencies pursuant to Council Regulation (EC) No 58/2003 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes (doc. 12784/03).
Accession conference with Bulgaria EU common positions
The Council, with a view to the next Accession Conference with Bulgaria at ministerial level, adopted EU common positions on environment and cooperation in the fields of justice and home affairs.
Detergents * - Public deliberation
On the basis of the political agreement reached on 19 May 2003, the Council adopted its common position on the draft Regulation on detergents (doc.10595/03 + doc. 13271/03 ADD 1). The Portuguese delegation voted against.
This Regulation aims at ensuring the free movement of detergents in the Internal Market while providing a high level of protection for human health and for the environment. In particular it modernises the existing detergent directives by including provisions on the biodegradability of surfactants.
The proposed new biodegradability tests ensure a higher level of environmental protection and are applicable to all types of surfactants in detergents. Furthermore, it makes binding the requirements for the products covered by this Regulation specified in Commission Recommendation 89/542 on labelling of detergents and cleaning products and on specific information to consumers on the presence of fragrance substances in detergents.
Pedestrian protection Public deliberation
The Council adopted, pursuant to Article 251(2) of the Treaty, a Directive on the protection of pedestrians and other vulnerable road users which aims at reducing deaths and injuries of pedestrians involved in collisions with cars and light vehicles (doc. PE-CONS 3660/03).
Traditional herbal medicinal products * Public deliberation
The Council adopted its common position on a proposal for a Directive amending the Community Code on medicinal products for human use as regards traditional herbal products (doc.12754/03 + doc. 13601/03 ADD 1).
This draft Directive aims at facilitating the registration of certain traditional herbal medicinal products and further enhancing harmonisation by promoting mutual recognition among Member States of granted registrations of these products.
The Council adopted by qualified majority, with Ireland and Spain voting against and Belgium abstaining, a Regulation on the management of the fishing effort relating to certain Community fishing areas and resources and modifying Regulation (EEC) No 2847/93 ("Western Waters") (doc. 13682/03 ADD 1 + doc. 13679/03).
The purpose of the Regulation is to introduce a revised effort limitation scheme in Western Waters following the reform of the Common Fisheries Policy (CFP) and the full integration of Spain and Portugal into the CFP.
A political agreement had been found at the last Council (Agriculture and Fisheries) on 11 October 2003, after arduous negotiations. The Commission submitted this proposal to the Council on 17 December 2002.
The Council adopted the Decision concerning the participation of the EC in the negotiations on the modifications and adaptations of the Montreal Protocol with regard to substances which deplete the ozone layer.
Public access to documents
The Council adopted the reply to the confirmatory application made by Mr Ilias KONTEAS (3/03), the Swedish delegation voting against (doc. 13138/03).
Committee of the Regions
The Council adopted a Decision appointing:
Economic and Social Committee
The Council adopted a Decision appointing:
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