Brussels, 31/05/2002 (Agence Europe) - The EU's Economy and Finance Ministers will meet in Luxembourg on Tuesday, chaired by Rodrigo Rato, notably to try to find a compromise enabling France to agree to the adoption, by the EcoFin Council, of the draft recommendation on the broad economic policy guidelines (Bepgs) for Member States for 2002, in anticipation of the European Summit of Seville (21 and 22 June). The French Government has asked the Spanish Presidency, which has refused, to withdraw this item from the agenda, as France would like to avoid the confirmation of the 2004 deadline for the return to a balance in national budgets. Furthermore, the Council could reach a political agreement on the "pension funds" directive.
Over lunch, ministers will broach three topics: the contribution the EcoFin Council could make to the Convention's debate on the future of Europe, in the light of a report by the Economic and Financial Committee; - the contribution of the EcoFin Council to the Johannesburg Summit on sustainable development; - the creation of a "facility" (initially) within the European Investment Bank (EIB) for development in Mediterranean countries. May we point out that the governors of the EIB will meet in the morning before the EcoFin Council. Two other meetings will he held on the fringe of this Council session: - a discussion meeting between the Council and Parliament to seek agreement on reshaping the financial regulation; - the troika will meet a parliamentary delegation to discuss the international financial system.
Here is a summary of the main items on the agenda:
Bepgs 2002: France said at a meeting of the Economic Policy Committee (EPC) that it did not want the date of 2004 for the balancing of public accounts to be confirmed (before the second round of legislative elections, on 16 June). That it why it refuses the Council adopting its recommendations on Tuesday on the Bepgs, even if only a qualified majority is required. To avoid confrontation, at the European Council of Seville that should adopt, through unanimity this time, conclusions on the subject, the Spanish Presidency hopes that the Council will find a solution having heard the stance of the new French Economy and Finance Minister, Francis Mer. Then, in case of a compromise, the draft recommendation on the Bepgs could be adopted by the Economy and Finance Ministers, at an extraordinary meeting that would be held just before the Seville Summit and after the results of the legislative elections in France. You may recall that French President Jacques Chirac had promised a cut in taxes during his electoral campaign, despite France's undertaking, reaffirmed last March at the European Summit of Barcelona, to achieve a balance in its budget in 2004 at the latest. Chirac has mentioned a possible postponement of the deadline to 2007.
Pension funds. On the basis of its "compromise version" of the proposal, that takes account of the opinions expressed both by Member states and the European Parliament, the Spanish Presidency hopes to reach a political agreement on the creation of a "single passport" for pension funds in Europe. This text harmonises prudential standards, liberalises the rules of management and investment and sets up co-operation between national supervisory bodies. The last questions in suspense relate to the affiliation of the self-employed (that the Presidency would like to include in the directive's field of application, but over which Italy and Luxembourg, notably have reservations), on the obligation of Member states to signal the depository bodies, on the faculty for host Member states to impose certain rules quantitatively limiting investments for cross-border operations (a point on which France and Italy especially insist), and on the interests that can be paid for cross-border operations. At the end of the meeting of the Permanent Representatives, this week, all Member states, except notably France, seemed to be able to accept the Presidency's compromise. Even if Paris does not waive its reservation, an agreement could be reached among fourteen
Fiscal package: The Council should adopt conclusions, in the hope of providing a renewed political impetus to negotiations with third countries over the tax on savings, aimed at having them adopt "equivalent" measures to those that apply in the EU. Discussions are still laborious with Switzerland, which refuses to begin negotiations as long as the Council has not adapted the mandates proposed by the Commission on other subjects (Schengen, Dublin Convention, etc.).
Prospectus. The Council will have a policy debate on the directive that sets out the information to supply by the issuer of stocks to allow for a financial assessment of hare when they are being floated on the stock market or are the subject of a call for bids. The Presidency intends centring the debate around two questions: 1) the distinction between professional and non-professional investors; 2) the choice of the regulatory authority to which companies must submit their documentation. By adopting the Huhne Report in March (see EUROPE of 16 March), the EP left it up to companies the choice of the State of registration, whereas the Commission pleads in favour of the State of residency of the company.
Tax on bio-fuels. The Council could come closer on a political agreement on the proposal aimed at harmonising excises on "green fuels", but several Member states make their agreement dependent on progress in the Energy Council on the action plan aimed at setting at 20% the share of substitution fuels in diesel and petrol by 2020 (see Europe of 8 November, 2001).
Tax on energy. The Council should adopt guidelines that will guide the debate on tax on energy, ongoing since 1997. They should also set out the brief of the high-level group on the subject, group the creation of which was decided at the last EcoFin Council (see EUROPE of 8 Ma, p.8). The aim is to reach an agreement by the end of the year, as requested at the Barcelona Summit.
VAT on the cross-border sale of leased vehicles. This item ill be broached at Austria's request.
Company governance. Jaap Winter, Chair of the high-level group on company law, will present an "interim" report on "company governance" requested by the informal Council of Oveido in April (see EUROPE of 15/16 April, p.12). After the Enron affair in the United States, the group was invited to consider the role of non-executive directors and company surveillance boards, the remuneration of the managers and the responsibility of the board in preparing financial information. This report has to be presented to the Summit of Seville.