Brussels, 09/03/2001 (Agence Europe) - The Economic and Finance Council on Monday, chaired by Bosse Ringholm, will be mainly dedicated to the preparation of the Stockholm European Council. The debate will be concentrated on the report by the Lamfalussy group on the regulation of financial markets, object of tensions as to the balance of power between the institutions: this point, raised at the meeting of the COREPER this Friday, could give raise to a meeting of the Ecofin Council on the sidelines of the Summit. During the lunch, the Ministers will raise the negotiations with third countries on savings taxation and the question of a possible loan by the European Investment Bank to Russia. For the first time the Council will adopt its conclusions on the budgetary priorities for 2002 and give a discharge to the Commission on the implementation of the 1999 budget (see below).
Preparation of Stockholm Summit. The Ministers must adopt a report and a draft resolution on the final report of the Lamfalussy group (see EUROPE of 16 February, p.7). The report notes that the present regulation system for the EU is rigid and badly suited to the modern financial markets, and proposes to accelerate the decision-making mechanisms to establish an integrated financial market by 2005. To achieve this, it chose to path of a "comitology" by suggesting that the Commission adopt measures after a consultation process with the two committee, under the watchful eye of the Parliament. The essence of the provision, the European Committee for transferable securities (CEVM), which adopts, according to the rules of majority in the Council, opinions sent to the Commission. It is at this level that is found the dual problem: 1) the Commission is displeased that a aerosol clause gained by Germany, behind which are aligned most of the other delegation, and which states that financial markets are a sensitive sector in which the Commission, cannot decide against the opinion of the CEVM; 2) the European Parliament's Economic and Monetary Committee, unsatisfied with the role given to the EP, adopted a resolution calling for a call back right that would allow the MEPs to return to the Commission the measures taken exceeding its powers (see EUROPE of 9 March, p.15). Neither the Commission nor the Council are prepared to recognised the Parliament's right to call back, but the Commission would accept a solution that it close to it. According to a Commission civil servant, the Parliament is all the more displeased that the Council gives itself this right to call back thanks to the aerosol clause. The debate is of special importance to the extent that it has become apparent to several actors involved in this process, that such a move could lead to a fundamental reorganisation of the decision-making process in other areas. The COREPER agreed, on Friday, over a text that confirms the application of the "comitology" and refers in a general manner to the preservation of the balance between the institutions. The Ministers will then discuss a joint report by the Council and Commission on the contribution of State finances towards employment (including through tax systems more favourable towards employment, and special attention for the ageing of the population). The Council will listen to the President of the Economic Policy Committee (EPC) presenting the 2001 report on structural reforms - a overview of the progress achieved by the Member States in structural reforms for the product, labour and capital markets. Then, they will hear Philippe Maystadt, President of the EIB, present a report on the implementation of the "Innovation 2000 initiative" (i2i), one year after its launch.. The EIB notes that i2i gives impetus to the emergence of the knowledge society, but feels that efforts must be made in terms of employment, research and development. The Council will also examine the list of structural indicators, shortened on its request. Finally it will continue the preparation of the document on the Broad Economic Policy Guidelines 2001, which must be passed on to the Stockholm European Council, and will get to know the
Commission report on the application of the BEPG 2000 (see EUROPE of 8 March, p.9). On Wednesday morning, President Prodi will present the summary report by the Commission in view of the Stockholm Summit.
Financial aspects of Galileo. The Netherlands will request from the Commission a review of the possibilities to finance Galileo, following the lack of interest shown by the private sector for this project. The Commission wants to place this point on the agenda of the Stockholm European Council.
Application of the Stability and Growth Pact. The Council will examine the updated programmes of several Member States - Belgium, Spain, Luxembourg and Portugal.
Budgetary issues. The Council should in particular:
1) Recommend that the European Parliament give a discharge to the Commission for the implementation of the 1999 budget.
2) Adopt, for the first time, conclusions on the budgetary guidelines for 2002 presented by the Commission on 21 February (see EUROPE of 22 February, p.6). The debate should focus on the priorities for 2002 and the improvement of budgetary procedure. Thus, in the context of the financial consequences of the BSE crisis, the Council could recall that, in accordance with the conclusions of the Nice Summit, the financial perspective and the regulation on budgetary discipline must be respected, even if the new measures should be finalised to tackle the consequences of this epizootic (which implies that the Commission will be invited to make proposals to reduce spending in other sectors of CAP). The Member States should once more underline the need to rapidly carry out restructuring of the financial regulation.