Brussels, 19/09/2001 (Agence Europe) - European Ministers for the Economy and Finance will meet in Liege on Saturday for an informal Council under the presidency of Belgian Finance Minister Didier Reynders. In the morning and early-afternoon, ministers will continue discussions on the economic consequences of the attacks and return to the preparations for the introduction of the euro, 100 days from the changeover to the single currency. Globalisation and the budgetary consequences of enlargement will be on the menu for the ministers' lunch, followed, in the afternoon, by talks on tax issues. The greatly awaited debate on the "Tobin tax" will thus be held over lunch.
At 11.30 a.m., Didier Reynders will meet the General Secretary of the European Trade Union Confederation (ETUC), Emilio Gabaglio, following the "Euro-Demonstration" organised on Friday in the streets of Liege by ETUC to demand co-ordination of economic policies in view of growth and employment (see Europe of 8 September, p.16). He is also said to have proposed a meeting with the presidents of the association Attac, meeting for its summer university near Liege, but the latter is said not to have responded to the invitation. "We shall receive the association's conclusions Saturday, possibly by mail or otherwise (….) I always prefer to work by E-mail than via paving stones", the minister told the press ironically when presenting the meeting.
During the morning, the foreign ministers, together with the governors of central banks and the Commission, will take stock of the economic measures that could possibly be taken to face up to the consequences of the attacks on the United States, in the light of the conclusions of the Eurogroup (see following article) and of the European Council on Friday evening. The Council will then speak of the report being prepared on the changeover to single currency, to be presented to the Informal European Council in Gent (on 19 October). The Council is expected to define a strategy on the external use of single currency, before the G7 meeting, "with, as a backdrop, the position to be taken at the IMF and World Bank meeting", explained Mr Reynders.
During lunch, the ministers will reflect on "the message" to be given with regard globalisation from two angles, the volatility of capital and development aid, said Didier Reynders. "I know that, for many, the debate can be summarised by a yes or a no to the Tobin tax, but the aim is to know what works and what works well. The discussions on volatility and on development are not necessarily linked", said the minister, who prefers to place emphasis on the expected stability of the euro, the influence of the private sector on financial crises and "other solutions such as the tax instrument".
Still during the lunch, European Budgets Commissioner Michaele Schreyer will give an oral report on the budgetary impact of enlargement. EUROPE has reason to believe she will point out that the ceilings defined in the 2000-2006 financial perspectives will not be brought into question, in so far as the impact of enlargement to six new members in 2002 (as planned in 1999) should have the same effect as an enlargement to ten members in 2004 (as envisaged today). The financial perspectives, however, are to be updated before enlargement.
During the afternoon, the ministers will seek to clear the way before the next formal Ecofin Council, on 16 October, with regards four outstanding issues that Belgium has made its Presidency's priorities:
1. Savings tax (taxation package): The discussion focuses on who will form part of the team that will negotiate with third countries (Switzerland, the United States, etc) to reach an agreement on the taxation of savings. Most Member States accept that the European Commission should negotiate, in line with the Treaty, but the United Kingdom is arguing that the Presidency of the Council should lead the discussions;
2. Reduced VAT: The Belgian Presidency wants to make progress in considering the use of financial incentives to promote certain policies (sustainable development and mobility, for example), indicated Didier Reynders. He explained that it would not necessarily be essential to increase taxation to do this, the Ministers wanted to refocus the debate by stressing that economic agents can be influenced by the carrot rather than by the stick alone. The issue is likely to appear on the agenda next year too when the Commission presents its report on the application of the 6th Directive to the list of goods and services that benefit from reduced VAT levels, explained European Commission officials;
3. The energy tax: In the hope of advancing on dossiers such as energy tax and the liberalisation of the electricity sector, linked together by Spain in particular, the Presidency intends to make proposals on the structure of the energy tax, rates and liberalisation, indicated Mr Reynders. He added that they would see if they could reach agreement on an EU agreement or whether other solutions would have to be found.
Their objective was that a choice be made under the Belgian Presidency, he explained.
4. VAT on goods sold electronically: Mr Reynders said that they wanted to see whether an agreement might be possible in this area following the Council debate in June. The United Kingdom opposed the compromise position in June 2001 whereby third countries would need to meet the VAT formalities of a single Member State. The compromise also foresaw a system of sharing the VAT revenue thus raised.