I stick by my commitment to report periodically on developments in various European dossiers which I see as important for the citizens, or for the much-anticipated economic upturn.
Good news for the trans-European networks. In Strasbourg this week, the Presidency of the Council informed the Parliament of its intention to keep intact the proportion earmarked for the Community funding of priority transport infrastructure projects (in its compromise on the financial perspectives 2007-2013), i.e. the 20.3 billion EUR proposed by the Commission. On principle, Jean-Claude Juncker has kept quiet about the figures for the compromise he is planning, but it was doubtless with his blessing that minister delegate Nicolas Schmit was able to answer a question from the president of the parliamentary committee on transport,t Paolo Costa, by stating that “the Luxembourg Presidency is very keen to ensure that the aforementioned sum is not reduced”, adding that it should be enough for all the 30 priority projects decided upon by the Summit in 2004 to become reality. This is very important, because the chosen projects are strategic to the competitiveness of Europe, to forge physical links between Member States which are far apart by removing bottlenecks and to make the most of the identities of the peripheral countries, and without the financial support of Europe, they cannot be carried out within a reasonable period of time. The sum of money mentioned would bring Europe's contribution to 30% of the cost of these projects, and up to 50% for the cross-border sections. The Vice-President of the Commission, Jacques Barrot, confirmed that the plan for how exactly to allocate the funding is almost complete.
A few MEPs expressed their reservations about one or the other of the projects, but I got the impression that this time, this dossier, an essential element of the Lisbon Strategy, is really on its way. The only things that could stop it now are the derailing of the Constitution or a failure to agree on the new “financial perspectives”.
Subsidiarity in action. The second recent development is the draft compromise by the Presidency of the Council on reduced rates of VAT. A minor technical issue? Not at all, because the economic and social interests at stake are highly significant (for housing costs, employment in the field of services, etc), and various aspects also have a considerable political angle (the reduced rate for the restaurant trade had a part to play in the recent presidential campaign in France). The Presidency's brilliant idea was to consider that in various fields, the rate of VAT was a matter for subsidiarity and that as a result, the Member States should have a certain level of autonomy. The project states that “the measures proposed are local by nature and do not give rise to competition distortions in the internal market”, adding: “the harmonisation of indirect taxation is not an end in itself, it should be needed to ensure the establishment and functioning of the single market”. It all boils down to this question: if France practises a reduced rate of VAT for restaurants and similar establishments, will competition in the single market be distorted? Are people going to go to Paris for dinner rather than London or Berlin because the VAT is lower there? The word “subsidiarity” is not mentioned and the plan does not aim to get rid of the European nature of decisions on VAT, but to bring in a balanced plank of measures into the regulations (and there'll be something in it for each country…) targeting: 1) the option of allowing the Member States to apply the reduced rate to catering and other services (hairdressing, car valeting, small repair services) until 2015, 2) extending the reduced rate (which already exists for construction and refurbishing social housing) to the refurbishment of old private housing, home care, waste recycling and certain types of gas and electricity supply; 3) extending the special provisions currently in force for certain old Member States or for the new ones, up to the end of 2015.
The Commission would be called upon to keep a systematic eye on the impact of the reduced rates on the functioning of the internal market, reporting to the Council every five years.
It is worth highlighting that in the field of restaurants and catering, some of the Member States are already applying a reduced rate (Spain 7%, Italy 10%) under previous authorisations. The Commission calls for caution all the same: the approval of the Luxembourg project, which requires unanimity, is far from being in the bag. The plan is, in any case, important due to its economic scope and the implicit affirmation of the concept of subsidiarity when uniformity at European level is not economically necessary.
(F.R.)