Brussels, 01/06/2001 (Agence Europe) - The Ecofin Council to be held this coming Tuesday in Luxembourg, under the chairmanship of Bosse Ringholm, is mainly devoted to the preparation of the European Council of Gothenburg on 15 and 16 June and to several reports on tax issues. The ministers will seek a consensus on the draft report at the European Council on the Broad Economic Policy Guidelines (BEPG) 2001, prepared by the Economic and Finance Committee (EFC) and the Economic Policy Committee (EPC) on the basis of the European Commission's recommendation dated 17 May. The debate will not be an easy one, in so far as the budgetary situation of Ireland remains worrying and because of the electoral context of the United Kingdom, which has had the Commission's finger pointed at it. Tension also appeared in the gas and electricity sectors, at the level of taxation (Spain) as well as liberalisation (France). The spokesman for the Swedish Presidency seriously doubted on Friday that "the Member States would be able to agree unanimously". The BEPG must be adopted by consensus at the European Council of Gothenburg and by qualified majority at the Ecofin Council, which will meet in conjunction with the meeting of heads of state and governments. Furthermore, over lunch, the finance ministers will discuss the state of progress in contacts with the United States on savings tax, considered "worrying" by several delegations. Furthermore, they will be briefed by Commissioner Frits Bolkestein on the discussions in progress between the European Parliament and the Commission on the comitology clause in the Lamfalussy report (see p.13). Commissioner Pedro Solbes, responsible for economic and monetary affairs, will present a report on the economic dialogue with Russia which was held on 10 and 11 May in Moscow. The ministers of the countries not belonging to the euro zone will be kept informed on the Eurogroup's deliberations.
We give below an overview of how the Ecofin Council unfolded:
- Preparation of the European Council of Gothenburg:
1) Adoption of the draft report on the Broad Economic Policy Guidelines (BEPG) 2001.
2) Debate on the European Union's strategy for sustainable development, based on a report by the Swedish Presidency, centred on integration of sustainable development in the Lisbon strategy.
3) Tax package: The Council must examine certain aspects of taxation, in preparation for a summary report on savings tax, mainly from the angle of the discussions under way with certain third countries (Monaco, Switzerland, Liechtenstein, Andorra, San Marino, United States), and on developments in work by the Code of Conduct group. The Swedish Presidency and the Commission consider it necessary to set in place a timetable for negotiation as of the July Ecofin, and that the Member States should come to an agreement on a text mandating the Commission for negotiating. A diplomat close to Council circles considered the progress made in this field "disappointing", and felt that "the whole burden will weigh on the Belgian Presidency". The adoption of the savings tax directive is subject to the success of negotiations with third countries on measures equivalent to information exchange, a mechanism that Switzerland does not accept. The Council must examine the creation of a high level group for coordinating work on the tax package.
- Indirect taxation:
1) Discussion on progress achieved concerning VAT on electronic commerce, given the U-turn by the United Kingdom, which has joined the American position in favour of a tax moratorium on e-commerce transactions. All the other delegations are opposed.
2) Report on energy taxation: Discussions on the structure of the tax are progressing, while only a few Member States agree to speak of the rate of taxation.
Action plan on financial services. Report by Commissioner Frits Bolkestein.
Financial assistance to the Federal Republic of Yugoslavia. The Commission proposes aid of EUR 300 million. Unlike Italy, the UK and Germany hope the amount will be lower than this.
Financial regulation applicable to EU budget: The Council should take stock of the Commission proposal on the financial regulation based on Article 279 of the Treaty.
Protection of financial interests and fight against fraud. The Commissioner responsible for the Budget Michaele Schreyer will presents the annual report from the Commission and the action plan 2001-2003.