Brussels, 13/10/2000 (Agence Europe) - The Ecofin Council session, that will be chaired on Tuesday 24 October by French Finance Minister Laurent Fabius, will allow stock to be taken of negotiations. The famous "tax package" returns to the ministers' table for the first time since the European Summit of Feira, in June. The Heads of State and Government had given them the mandate to reach an agreement on the "essential content" of the savings directive before the end of the year 2000. Major technical work has already been achieved. "We do not expect real negotiations at this stage, but an inventory", said the French Presidency, as the whole of the dossier must be examined in depth during the Ecofin Council on 27 November.
The Fifteen will also take stock of work on the directive on electronic commerce taxation and on certain economic issues. The only concrete move forward expected on Tuesday, in legislative terms, could be a political agreement on a directive concerning undertakings for collective investment in transferable securities (UCITS). The Ecofin session will continue with a joint Council for Justice and Home Affairs Ministers of the Fifteen, devoted to the fight against financial crime (see the following article).
- Tax package. The Presidency will present a progress report on the three dossiers making up this tax package, namely the directive on the taxation of savings interest of non-residents, the code of conduct on company taxation and the directive on the taxation of interests and fees collected between partner companies.
- On savings: seven days of meetings in five weeks have allowed experts to make progress on the definition of "interests", "paying agent", "effective beneficiary", on the arrangements for implementation of the withholding tax and the exchange of information. Withholding has not, however, yet been tackled, and will be reserved until the last round of negotiations. "On each point, majority views are expressed but this is not sufficient for an agreement, which requires unanimity", said the Presidency. Complementary technical work will be necessary, before essential political arbitration on matters such as the non-levy of withholding on interests earned by non-residents, the sharing of receipts from withholding, etc.
- On the code of conduct on corporate taxation, "much progress had been made last year with the establishment of the list of 66 preferential tax regimes, in principle unlawful. The discussion on the dismantling of such measures has not made much head way since then, as some delegations (Ed.: mainly Belgium) link this with the results of work on the savings directive", explained the Presidency.
- On the directive on interests and levies, some questions are still to be resolved such as the transition relays requested by Greece, Spain and Portugal. However the "text is more or less settled and there should not be any difficulty for an agreement on 27 November", said the Presidency.
- VAT on electronic commerce. The Presidency will take stock of progress in the work on the directive aimed at establishing the principle of taxation in the place of consumption. "There is consensus on the fact that current competition distortions must be eliminated (to the detriment of European companies compared to their foreign competitors) but disagreement over the VAT payment modalities, as it is provided that the foreign companies should register in a single Member State where they would pay VAT", explained the Presidency. This provision poses problems for member States which apply high rates of VAT.
- Determination of VAT liability. Ministers should confirm without debate their agreement on a directive that is part of the Commission's strategy for modernising the current VAT regime.
- UCITS. A political agreement is not to be ruled out on one of the two draft directives on the table that aim to extend the range of assests that can be the subject of investment on the part of UCITS.
As far as economic issues are concerned, the ministers will review the following dossiers:
- Employment package. President Glass will present to the Council the report that the Economic Policy Committee devoted to the different elements of the "employment package 2000", namely: - the draft joint report (Council-Commission) employment 2000; - the guidelines for Member State employment policy; - the draft recommendation concerning the implementation of employment policy of the same Member States. Mr Glass should stress that the "package" was better prepared than last year (the Commission has put the final touches to its recommendations) and that it represents a good basis for the elaboration of the joint report to be addressed to the European Council of Nice, a report that will in turn contribute to the
- preparation of that commissioned by the Heads of State and Government for their special session in Stockholm next spring. The EPC will probably also draw the Council's attention to certain specific issues such as the presence in the proposed guidelines of new quantitative objectives and their possible budgetary implications. The ministers should set out guidelines for continued preparation (by the EPC and the Employment Committee) of the joint Council-Commission report. It is not to be ruled out that some of them will raise questions regarding the foundation of the French Presidency's decision not to foresee a joint Ecofin-Employment and Social Affairs session for the adoption of this report.
- Reform of the systems of contributions and payments in order to promote employment. The Lisbon Summit has fixed ambitious objectives concerning the rise in employment rates in the EU (from 61% at the present time to 70% in 2010). In the light of a Commission communication and an oral report from Mr Glass on work devoted to this question by the EPC (mainly, the stimulation of unqualified workers so that they may integrate into the employment market), the Presidency will call on ministers to set out, on the basis of a series of specific issues (relating, among other things, to "unemployment traps") guidelines for the continuation of the work of the EPC.
- Environment and growth. In this case also, the Council should give guidelines for the continuation of preparation, by the EPC, of the report that the Ecofin Council will have to forward to the European Council of Nice concerning the integration of the environment and of sustainable development in economic policies. EUROPE recalls that Nice will only be a stage, the final report on the matter requested by the Helsinki Summit in December 1999 being intended for the European Council of Gothenburg in June 2001. In his oral report, Mr Glass will above all draw the ministers' attention to the fact that, among the many instruments to be placed at the service of the environmental policies, "market" tools such as taxes or negotiable licenses deserved to be analysed more closely in order to determine their potential advantages or disadvantages.
- Preparation of G20. The president of the Economic and Financial Committee will briefly take stock of the state of preparation of the ministerial meeting to be held on 24/25 October in Montreal.
Eurogroup: Meeting late Monday afternoon - Examination of situation in four Member States
The finance ministers of the euro zone countries will meet on Monday late afternoon. They will carry out their traditional overview of the general economic and monetary situation. Regarding multilateral surveillance, they could also focus on the situation prevailing on the budgetary and structural plan in four Member States, namely Germany, France, Ireland and Italy (foreseen during a previous session, this exercise had to be postponed because of the discussions devoted to further action after the oil crisis, a point which, except counter order, should not be tackled this time).
