- ECOFIN /02 (Presse 117) 2424th Council meeting. Brussels, 7 May President :

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1 8294/02 (Presse 117) 2424th Council meeting - ECOFIN - Brussels, 7 May 2002 President : Mr Rodrigo RATO Y FIGAREDO Second Deputy Prime Minister and Minister for Economic Affairs of the Kingdom of Spain Internet: press.office@consilium.eu.int 8294/02 (Presse 117) 1

2 CONTTS 1 PARTICIPANTS...4 ITEMS DEBATED BROAD ECONOMIC POLICY GUIDELINES...5 DIRECTIVES AND REPORTS IN THE FINANCIAL SERVICES AREA...6 MARKET ABUSE...6 FINANCIAL CONGLOMERATES...6 TAXATION OF ERGY...7 TAXATION OF SAVINGS - Negotiations with third countries and discussions with dependent or associated territories...8 PRELIMINARY DRAFT COMMUNITY BUDGET FOR RECASTING OF THE FINANCIAL REGULATION...9 FINANCIAL STABILITY, SUPERVISION AND INTEGRATION...10 EU-LATIN AMERICA SUMMIT - ECOFIN contribution...11 OTHER BUSINESS...11 Monterrey Conference...11 ITEMS APPROVED WITHOUT DEBATE... I ECOFIN Quarterly non-financial accounts for general government *...I OLAF Second activity report of OLAF ( ) and Second activity report of the Supervisory Committee (July 2000-September 2001) - Council conclusions...i TAXATION Luxembourg - excise duty to low-sulphur diesel...iii VAT applicable to radio and television broadcasting services and certain electronically supplied services and additional measures regarding electronic commerce *...III For further information call 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. 8294/02 (Presse 117) 2

3 ATOMIC QUESTIONS Radioactive materials in the recycling of metallic materials *...III Hochtemperatur-Kernkraftwerk GmbH...IV RELATIONS WITH CEEC Revised country reports on Slovenia, Cyprus and Slovakia...IV Poland - Protocol on fishery products...iv TRADE ISSUES Anti-dumping - coumarin from China...IV VIRONMT Integrated Coastal Zone Management...V YOUTH White Paper on Youth policy...v CULTURE European Capital of Culture V EMPLOYMT Support measures in the field of employment *...V TELECOMMUNICATIONS Postal services *...VI APPOINTMT Committee of the Regions...VI 8294/02 (Presse 117) 3

4 PARTICIPANTS The Governments of the Member States and the European Commission were represented as follows: 7.V.2002 Belgium: Mr Didier REYNDERS Denmark: Mr Thor PEDERS Germany: Mr Hans EICHEL Mr Caio KOCH-WESER Greece: Mr Nikos CHRISTODOULAKIS Spain: Mr Rodrigo DE RATO Y FIGAREDO France: Mr Jean-Pierre JOUYET Ireland: Mr Charlie McCREEVY Italy: Mr Giulio TREMONTI Luxembourg: Mr Henri GRETH Netherlands: Mr K. van DIJKHUIZ Austria: Mr Alfred FINZ Portugal: Ms Manuela FERREIRA LEITE Finland: Mr Sauli NIINISTÖ Sweden: Mr Bosse RINGHOLM United Kingdom: Mr Gordon BROWN Minister for Finance Minister for Finance Federal Minister for Finance State Secretary, Federal Ministry of Finance Minister for the National Economy and Finance Second Deputy Prime Minister and Minister for Economic Affairs Director of the Treasury Minister for Finance Minister for the Economy and Finance Minister for Economic Affairs General Treasurer, Ministry of Finance State Secretary, Federal Ministry of Finance Ministra de Estado, Minister for Finance Minister for Finance Minister for Finance Chancellor of the Exchequer * * * Commission: Mr Frits BOLKESTEIN Mr Pedro SOLBES MIRA Ms Michaele SCHREYER Member Member Member * * * Other participants: Mr Philippe MAYSTADT Mr Johnny ÅKERHOLM Mr Jean-Philippe COTIS President of the European Investment Bank Chairman of the Economic and Financial Committee Chairman of the Economic Policy Committee 8294/02 (Presse 117) 4

5 BROAD ECONOMIC POLICY GUIDELINES Following a presentation by Commissioner Solbes, the Council held an exchange of views on the Commission Recommendation on the Broad Economic Policy Guidelines for The Council in particular focussed on general policy recommendations and priority areas to be examined by the Economic and Financial Committee (EFC) and the Economic Policy Committee (EPC) in their further work on the guidelines. The Council broadly supported the emphasis placed by the Commission on the four key challenges for the next year: Safeguarding and further strengthening the macroeconomic framework; Promoting more and better jobs, raising labour force participation and addressing persistent unemployment; Strengthening conditions for high productivity growth; Promoting sustainable development in the interest of current and future generations. The ECOFIN Council on 4 June will adopt the report on the draft BEPGs which will be submitted to the Seville European Council. 8294/02 (Presse 117) 5

6 DIRECTIVES AND REPORTS IN THE FINANCIAL SERVICES AREA MARKET ABUSE The Council confirmed political agreement on a draft Directive on Market abuse with a view to reaching a common position at the earliest opportunity (doc. 8154/1/02 REV1). This draft Directive is set to replace the 1989 Directive on insider dealing and widens its scope to cover market manipulation. It contains inter alia specific provisions guaranteeing the rights of journalists when they are acting in their professional capacity. It is recalled that the future Directive should be geared in particular to the fight against the financing of terrorism. FINANCIAL CONGLOMERATES The Council reached political agreement on a Presidency compromise text on a draft Directive on financial conglomerates with a view to formally adopting a common position in the near future. The rapid adoption of this Directive is one of the priorities set out in the Barcelona Council conclusions. The aim of this Directive is to ensure the stability of European financial markets, to establish common standards for the supervision of financial conglomerates and to introduce level playing fields and legal certainty between financial institutions. The Directive introduces specific prudential legislation for financial conglomerates. Furthermore, it takes the first steps to align the directives for homogeneous financial groups and for financial conglomerates (i.e. eliminating some of the major inconsistencies) in order to ensure a minimum equivalency in the treatment of these groups. 8294/02 (Presse 117) 6

7 TAXATION OF ERGY The Council held a detailed exchange of views on draft guidelines for the taxation of energy drawn up by the Presidency which are designed to give political impetus to work on a proposed Directive on the taxation of energy, following up on the request to the Council by the Barcelona European Council to reach "in parallel with the agreement on the opening of the energy markets, an agreement on the adoption of the energy tax directive by December 2002, bearing in mind the needs of professionals in the road-haulage industry". The draft guidelines deal in particular with: - the scope of compulsory exemption; - differentiation between business and non-business use; - tax reductions for particular areas of production; - application of differential tax rates by Member States; - minimum levels of taxation of energy products subject to harmonised excise duties; - minimum levels of taxation of energy products not yet subject to harmonised excise duties. The Council broadly welcomed the Presidency's approach and objectives and asked the Permanent Representatives Committee to mandate a High Level Group to further prepare the work of the Council with a view to reaching consensus on the guidelines at the ECOFIN Council meeting on 4 June. 8294/02 (Presse 117) 7

8 TAXATION OF SAVINGS - Negotiations with third countries and discussions with dependent or associated territories The Council heard a comprehensive report on the current state of play of negotiations on the taxation of savings income between the Commission and third countries as well as on the discussions between the Member States concerned and their dependent or associated territories. Commissioner Bolkestein reported that while talks with most third countries have started, negotiations have not yet formally begun with Switzerland. Switzerland is linking the tax issue to the opening of talks with the EU on a number of unrelated subjects, such as participation in the Schengen/Dublin acquis, liberalisation of trade in services and participation in audiovisual programmes, on which negotiating mandates should be agreed shortly by the Council. As regards dependant and associated territories, the United Kingdom informed the Council of the measures it had taken to secure agreement on the exchange of information. For its part, the Netherlands reported on the successful outcome of its discussions with the Dutch Antilles and Aruba. It is recalled that the Feira European Council of June 2000, confirmed by ECOFIN in November 2000, made the adoption of the directive on the taxation of savings conditional on measures of equivalent effect being agreed by several countries outside the European Union to prevent capital flight towards tax havens where savings taxation is less strict. According to the timetable for the tax package agreed by ECOFIN in July 2001, agreement should be reached by June of this year with several so-called "key countries", including Switzerland, the United States of America and Liechtenstein, while the UK and the Netherlands will have to agree arrangements with their associated or dependent territories, such as the Channel Islands, UK Caribbean territories and the Netherlands Antilles. 8294/02 (Presse 117) 8

9 PRELIMINARY DRAFT COMMUNITY BUDGET FOR 2003 The Council heard a presentation by Commissioner Schreyer on the preliminary draft budget (PDB) for 2003 as adopted by her institution on 30 April 2002 and had an exchange of views on the budgetary priorities for The Council instructed the Permanent Representatives Committee to examine the PDB in order to allow the July Budget Council to decide on the draft Budget for 2003, including in the light of the conclusions on the budget priorities for 2003 adopted by the Council at its meeting of 5 March RECASTING OF THE FINANCIAL REGULATION The Council examined the single remaining open issue on the proposal for the recasting of the financial regulation. It invited the Permanent Representatives Committee and the relevant Council preparatory bodies to continue their work with a view to reaching a common orientation at the 4 June Council. 8294/02 (Presse 117) 9

10 FINANCIAL STABILITY, SUPERVISION AND INTEGRATION The Council adopted the following mandate for the EFC for future work on financial stability, supervision and integration: "At the informal Ecofin meeting in Oviedo on 13 April 2002, it was agreed that work must continue to ensure that the EU has appropriate structures in place for financial regulation and supervision in a rapidly-changing financial environment. Therefore, the Ecofin Council invites the Economic and Financial Committee (EFC) to assess and report on possible arrangements which must be consistent with the following principles: consistency with the allocation of powers and responsibilities set out in the Treaty; appropriate accountability to EU institutions, in particular political accountability to the Ecofin Council; subsidiarity, since supervisory tasks are best performed as close as possible to supervised entities and since financial crises may have implications for public finances; neutrality with respect to the models adopted at the national level for the allocation of regulatory, supervisory and financial stability functions; clarity of objectives and responsibilities for each participating group within the overall framework, respecting statutory protection of information; and appropriate representation at the EU-level of the competent national authorities involved. In particular, appropriate arrangements should be considered for design and implementation of new legislation, supervisory information exchange, supervisory best practice and convergence, policy advice to Ecofin and the Commission, and assessment of threats to financial stability including consideration of related cross-country and cross-sectoral structural issues, with specific mechanisms to guarantee accountability. The EFC should present a preliminary report assessing possible options by July 2002, and a final report by the end of September The Council invites the Commission, having involved relevant supervisory authorities and Ministries of Finance and taking account of the views of the industry and consumers, to bring forward as soon as possible its report on the appropriate arrangements that are needed to facilitate the consistent implementation and enforcement of regulation including supervisory practices, in line with the recommendations of the EFC report on financial integration, to allow its use by the EFC as a basis for meeting its own mandate." 8294/02 (Presse 117) 10

11 EU-LATIN AMERICA SUMMIT - ECOFIN contribution The Council adopted the ECOFIN contribution to the EU-Latin America Summit to be held in Madrid on 18 May 2002, which assesses a number of key challenges facing Latin America, in particular macroeconomic stability, budgetary positions and frameworks, reform of the financial system and poverty and inequality. OTHER BUSINESS Monterrey Conference At the request of the Swedish delegation, the Council considered the follow-up to the Monterrey Conference. 8294/02 (Presse 117) 11

12 ITEMS APPROVED WITHOUT DEBATE 7.V.2002 The documents whose references are given are available on the Council's Internet site Acts adopted with statements for the Council minutes which may be released to the public are indicated by an asterisk; these statements may be obtained by following the procedure indicated on the Internet site or from the Press Office. ECOFIN Quarterly non-financial accounts for general government * The Council adopted a Regulation on quarterly non-financial accounts for general government (doc. 3620/ /02 ADD1). The purpose of this Regulation is to define the content of quarterly non-financial accounts for general government, to lay down the list of the ESA 95 categories to be transmitted by Member States from 30 June 2002 and to specify the main characteristics of these categories. Under the Regulation, Member States shall transmit to Eurostat quarterly data for the categories or groups of categories included in the list provided in the Annex attached to the Regulation, with the exception of those categories for which data must be transmitted on a more regular basis pursuant to Regulation (EC) N 264/2000. OLAF Second activity report of OLAF ( ) and Second activity report of the Supervisory Committee (July 2000-September 2001) - Council conclusions "1. The second activity report of the European Anti-Fraud Office (OLAF) (1 June May 2001) deals, among other things, with: operational activities involving internal administrative investigations in the institutions, bodies, offices and agencies of the Community and external administrative investigations; the operation of OLAF; the evolution of the instruments in support of operational activity. 2. The second report of the OLAF Supervisory Committee, covering the period July 2000 to September 2001, gives an analysis and a constructive and critical assessment of the efficiency of OLAF's administrative structures and operational activities. The Council: 3. Welcomes with interest these two reports, while stressing the importance it continues to attach to OLAF's activities concerning the protection of the Community's financial interests and the fight against fraud. 8294/02 (Presse 117) I

13 4. Notes with interest that, after a long period of reorganisation, it now appears that OLAF is in a position to carry out its mission under satisfactory and stable conditions. 5. Supports the objectives, methods and working principles set out in the introduction to the OLAF activity report. The Council also notes that measures have been taken to ensure OLAF's independence and the transparency of its operation and also to make the management and follow-up of its investigations more efficient. These measures include: the introduction of the OLAF Manual of methods and procedures; the introduction of the Case Management System; the creation of a third Directorate "Intelligence, Operational Strategy and Information Technology"; the recruitment of legal and judicial experts who take part in or are associated with the investigation, coordination and assistance procedures; the creation of a unit responsible for the follow-up of investigations from the financial point of view, including recovery. 6. Notes that efforts have been made in the activities involving internal investigations concerning the institutions, bodies, offices and agencies of the Community. These efforts should be intensified, without prejudice to external investigations. The Council notes, however, the existence of certain problems raised by the Supervisory Committee regarding the extent of OLAF control in the conduct of internal investigations. 7. Agrees with the Supervisory Committee that consideration should be given to the advisability of and the detailed arrangements for cooperation between OLAF and Eurojust, in view of the fact that OLAF's operational activities are of an administrative nature. 8. Reaffirms the importance of the role and work of the Member States in the protection of the Community's financial interests and the fight against fraud. In this context the Council encourages OLAF to continue its efforts to improve administrative cooperation with the authorities of the Member States. 9. Reaffirms the need to continue and to increase the assistance given to the associated accession candidate countries to enable them to adapt their national structures in order to meet the objectives laid down in Article 280 of the EC Treaty. 10. Reiterates the importance of the content of the progress report provided for in Article 15 of Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999, which it will study closely. 11. Calls on the bodies concerned to implement more systematically the provisions of Article 7 of Regulation (EC) No 1073/1999 as regards the duty to inform OLAF. 12. Calls on the Supervisory Committee to continue its task with the aim of reinforcing OLAF's independence in the performance of its investigative function and contributing to the Office's smooth running and therefore calls on the Commission to continue its efforts to ensure efficient and independent execution of that task. The Council reiterates the need to strike a balance between OLAF's operational independence and its role in preparing legislative initiatives so as to achieve positive synergy. 8294/02 (Presse 117) II

14 13. Calls on OLAF to actively pursue its operational activities and to establish performance priorities, objectives and criteria and, on that basis, to submit to the Supervisory Committee an annual activity programme with a view to ensuring greater a priori consistency in its interventions. This programme should also make it possible to monitor and assess the results obtained. Particular attention should also be paid to developing preventive measures." (doc. 6753/02) TAXATION Luxembourg - excise duty to low-sulphur diesel The Council adopted a Decision authorising Luxembourg to apply a differentiated rate of excise duty to low sulphur diesel in accordance with Article 8(4) of Directive 92/81/EEC (doc. 8120/02) from 1 June 2002 to 31 December The differentiation in excise duty may not exceed 15 EUR per litres of fuel. VAT applicable to radio and television broadcasting services and certain electronically supplied services and additional measures regarding electronic commerce * The Council adopted a Directive amending and amending temporarily Directive 77/388/EEC as regards the value added tax arrangements applicable to radio and television broadcasting services and certain electronically supplied services; a Regulation amending temporarily Regulation (EEC) N 218/92 on administrative cooperation in the field of indirect taxation (VAT) as regards additional measures regarding electronic commerce. (doc. 6373/ / /02 ADD1) ATOMIC QUESTIONS Radioactive materials in the recycling of metallic materials * The Council adopted a resolution on the establishment of national systems of surveillance and control of the presence of radioactive materials in the recycling of metallic materials in the Member States (doc. 8004/ /02). This resolution will be published in the Official Journal of the European Communities. 8294/02 (Presse 117) III

15 Hochtemperatur-Kernkraftwerk GmbH The Council adopted a decision extending the joint-undertaking status of Hochtemperatur- Kernkraftwerk GmbH (HKG) (doc. 6814/02), which was first granted in 1974 for an initial period of 25 years, for a further 11 years taking effect from 1 January The Council also adopted a decision extending the advantages conferred on the Joint Undertaking Hochtemperatur-Kernkraftwerk GmbH (HKG) (doc. 7318/02). RELATIONS WITH CEEC Revised country reports on Slovenia, Cyprus and Slovakia The Council took note of revised country reports on Slovenia, Cyprus and Slovakia in the field of Justice and Home Affairs. They constitute updated versions of a first series of country reports concerning all candidate countries. It is recalled that in the Joint Action of 29 June 1998 the Council established a mechanism for collective evaluation of the enactment, application and effective implementation by the applicant countries of the acquis of the European Union in the field of Justice and Home Affairs. Article 4, paragraph 1, of the Joint Action calls for the drawing up of evaluation reports on the progress and results of their alignment to the acquis. These reports should be used notably in the framework of the enlargement process. Poland - Protocol on fishery products The Council confirmed its Decision of 17 December 2001 on the conclusion of an additional Protocol to the Europe Agreement with Poland concerning trade arrangements for fish and fishery products (doc. 8156/02), the text having been amended to include a new article 5. This article clarifies the situation regarding the arrangements applicable to Community exports of stuffed pasta (COR1 to doc /01). It is recalled that on 17 December 2001 the Council adopted Decisions relating to the conclusion of additional Protocols to the Europe Agreements with seven countries in Central and Eastern Europe (Slovakia, Hungary, Poland, Slovenia, Estonia, Lithuania and Latvia). TRADE ISSUES Anti-dumping - coumarin from China The Council adopted a Regulation imposing a definitive anti-dumping duty on imports of coumarin originating in the People's Republic of China (doc. 7823/02). The rate of the duty is set at EUR per tonne. 8294/02 (Presse 117) IV

16 VIRONMT Integrated Coastal Zone Management The Council agreed to the amendments adopted by the European Parliament in second reading with a view to adoption of the recommendation concerning the implementation of integrated coastal zone management in Europe (doc. 7877/02). The recommendation is aimed at encouraging the rational and sustainable development of coastal zones from an environmental, social and economic point of view, by promoting a concerted and integrated approach to the management of coastal zones. YOUTH White Paper on Youth policy The Council adopted conclusions on the follow-up of the Commission White Paper entitled "A New Impetus for European Youth", as agreed at its session on 14 th February (see press release, doc. 6111/02). CULTURE European Capital of Culture 2005 The Council adopted a decision designating the city of Cork in Ireland as the Cultural Capital of Europe for the year 2005 (doc. 7560/02). The decision was taken on the basis of a recommendation from the Commission, and in the light of the opinion of the European Parliament and the report of a selection panel formed by the Commission. EMPLOYMT Support measures in the field of employment * The Council adopted the decision on Community incentive measures in the field of employment (doc. 3609/ /02 ADD1), as agreed in conciliation with the European Parliament on 3 April. The measures are aimed at encouraging co-operation between the Member States and supporting their action in the field of employment, in particular as concerns efforts to secure full employment in accordance with the decisions taken at the Lisbon European Council in March A total of 55 million euros is foreseen for implementing Community measures for the period. 8294/02 (Presse 117) V

17 TELECOMMUNICATIONS Postal services * The Council adopted the directive modifying Directive 97/67/CE on the opening to competition of postal services (doc. 3621/ /02 ADD1), approving the amendments adopted by the European Parliament in second reading. The Netherlands delegation voted against. The directive seeks to liberalise a further slice of the postal market (20% according to certain estimates) by 1 January 2006, whilst maintaining existing safeguards on universal service provision. Possible further measures may be adopted on the basis of a proposal to be submitted by the Commission by 31 December APPOINTMT Committee of the Regions The Council adopted a Decision appointing Ms María Dolores ALARCÓN MARTÍNEZ as an alternate member of the Committee of the Regions in place of Mr Bustillo NAVIA-OSORIO for the remainder of his term of office, which runs until 25 January 2006 (doc. 8246/02). 8294/02 (Presse 117) VI