5696/01 (Presse 35)

 

PRESS RELEASE

Subject :

2329th Council meeting

- ECOFIN -

Brussels, 12 February 2001

 

 

President :

Mr Bosse RINGHOLM,

Minister for Finance of the Kingdom of Sweden

 

CONTENTS

PARTICIPANTS *

ITEM DEBATED

EXCISE DUTY ON MINERAL OILS *

PREPARATION OF THE STOCKHOLM EUROPEAN COUNCIL *

- Product and capital markets *

- Broad Economic Policy Guidelines *

EMU *

- Protection of the Euro against counterfeiting *

- Issues related to Euro coins - Council conclusions *

SUPPLEMENTARY AND AMENDING BUDGET 1/2001 CONCERNING BSE RELATED MEASURES *

E- COMMERCE - COMMISSION COMMUNICATION *

UCITS *

IMPLEMENTATION OF THE STABILITY AND GROWTH PACT *

- Danish updated Convergence Programme (2000-2005) *

- Ireland : 2000 update of the Stability Programme (2001-2003) *

- *

Ireland - Council Recommendations *

- *

Greece: 2000 Stability Programme (2000-2004) *

- France: 2000 update of the Stability programme (2002-2004) *

- Italy: updated Stability Programme (2000-2004) *

- Austria: Updated Stability programme (2000-2004) *

- United Kingdom: Updated Convergence Programme (2000-2005) *

LUNCH ITEMS *

ITEMS APPROVED WITHOUT DEBATE *

JUSTICE AND HOME AFFAIRS *

RELATIONS WITH THE ASSOCIATED CCEE *

EXTERNAL RELATIONS *

ANTI-DUMPING *

ANTISUBSIDY *

AGRICULTURE *

INTERNAL MARKET AND CONSUMER AFFAIRS *

EMPLOYMENT AND SOCIAL POLICY *

TRANPARENCY *

_________________

For further information call 02 285 64 23 - 02 285 84 15 - 02 285 63 19

PARTICIPANTS

The Governments of the Member States and the European Commission were represented as follows:

Belgium :

Mr Didier REYNDERS

Minister for Finance

Denmark :

Mr Poul Skytte CHRISTOFFERSEN

Ambassador, Permanent Representative

Germany :

Mr Caio KOCH-WESER

State Secretary, Federal Ministry of Finance

Greece :

Mr Yannos PAPANTONIOU

Minister for the National Economy and Finance

Spain :

Mr Rodrigo de RATO y FIGAREDO

Second Deputy Prime Minister and Minister for Economic Affairs

France :

Mr Laurent FABIUS

Minister for Economic Affairs, Finance and Industry

Ireland :

Mr Charlie McCREEVY

Minister for Finance

Italy :

Mr Vincenzo VISCO

Minister for the Treasury, the Budget and Economic Planning

Luxembourg :

Mr Jean-Claude JUNCKER

Prime Minister, Minister for Finance

Mr Henri GRETHEN

Minister for Economic Affairs, Minister for Transport

Netherlands :

Mr Gerrit ZALM

Minister for Finance

Austria :

Mr Karl-Heinz GRASSER

Federal Minister for Finance

Portugal :

Mr Joaquim PINA MOURA

Minister for Finance

Mr Manuel BAGNAHA

State Secretary for the Treasury and Finance

Finland :

Mr Sauli NIINISTÖ

Minister for Finance

Sweden :

Mr Bosse RINGHOLM

Minister for Finance

Mr Sven HEGELUND

State Secretary to the Minister for Finance

United Kingdom :

Mr Gordon BROWN

Chancellor of the Exchequer

* * *

Commission :

Mr Frits BOLKESTEIN

Member

Mr Pedro SOLBES MIRA

Member

Mrs Michaele SCHREYER

Member

* * *

Other participants :

Mr Philippe MAYSTADT

Chairman of the European Investment Bank

Mr Tommaso PADOA-SCHIOPPA

Member of the Executive Board of the European Central Bank

Mr Mario DRAGHI

Chairman of the Economic and Financial Committee

Mr Norman GLASS

Chairman of the Economic Policy Committee

EXCISE DUTY ON MINERAL OILS

The Council, over lunch, finalised its discussions and approved conclusions concerning the general decision on the prolongation of derogations on excise duties for mineral oils which paves the way for an early formal adoption of this decision as well as of a series of specific derogations in this area.

In substance, the Council agreed :

- on the text of the draft general Decision as set out in part A of the compromise paper presented by the French Presidency on 19 December 2000;

- that with regard to derogations for hauliers, there shall in 2002 be a relevant reduction of the amount of annual refund compared to the figures applied during the year 2001. It is to be understood that the "amount of annual refund" is the result of the two elements maximum volume quota (40.000 l per vehicle and year) and/or amount of refund per litre;

- that in respect to the normal operation of the internal market, the existence of sectorial derogations raises the issue of excise duty and equivalent measures. Progress has to be achieved in this field;

- that final adoption of the general Decision will take place together with the 5 specific Decisions authorising certain member states to apply differentiated rates for excise duties on mineral oils, once the parliamentary scrutiny reservations on the specific Decisions have been lifted.

The Council took note of the following statement of the Commission for the Council minutes:

"The Commission considers that tax breaks in favour of the road haulage sector and especially their prolongation, are not fully coherent with the objectives of the Community policies on environment, transport and energy. Therefore the Commission does not intend to propose further prolongations relating to the derogations in favour of road haulage after the year 2002."

 

 

PREPARATION OF THE STOCKHOLM EUROPEAN COUNCIL

- Product and capital markets

The Council heard a presentation by Commissioner BOLKESTEIN of its Institution's third report of December 2000 on the functioning of product and capital markets which responds to the request formulated by the Cardiff European Council of June 1998 in the context of structural reform. This paper will be taken into consideration for the preparation of a paper on the key issues of the BEPG for the March Stockholm European Council.

- Broad Economic Policy Guidelines

The Council had an orientation debate on the preparation of the Broad Economic Policy Guidelines on the basis of a note presented by the Presidency, contributions from the Internal Market and the Employment and Social Policy Councils and preparatory work done by the Economic and Financial Committee and the Economic Policy Committee.

During the debate, Ministers welcomed the Presidency's approach on the key issues paper which should be policy orientated, concise and well-focused to enable a constructive discussion on the BEPG by the European Council on both macroeconomic policies and economic reforms. Ministers expressed broad agreement on the suggestions made and on the selection of key issues to be focused upon in the next BEPG, including :

- the need to maintain macroeconomic stability, in particular to avoid procyclical budgetary policies, thereby allowing monetary conditions conducive to economic growth and continued employment creation. At the same time, the establishment of sound public finances are fundamental for dealing with the budgetary consequences of the longer-term challenge of ageing populations;

- the need to reform labour markets in order to reduce the rate of unemployment and increase labour supply;

- the need to continue to address the challenge of ageing populations and where necessary the reform of pension systems;

- the need to pursue the economic reforms in product markets in order to enhance the growth and employment potential in the EU, by promoting innovation and competitiveness while increasing the benefits to consumers;

- the need to create and integrated European financial market that will contribute importantly to stronger growth and higher employment by implementing of the various measures in the Financial Services Action Plan (FSAP) and the Risk Capital Action Plan (RCAP).

In the light of today's debate, a draft of the key issues paper will be prepared in close co-operation between the Presidency, the Commission, the Secretariats of the EFC and EPC, as well as of the Council Secretariat. This draft paper will be discussed by the EFC and, in relevant parts, by the EPC at their next sessions. The paper will subsequently be forwarded to the ECOFIN Council of 12 March for adoption.

EMU

- Protection of the Euro against counterfeiting

The Council reached political agreement on a regulation concerning the protection of the Euro against counterfeiting. The aim of the regulation is to ensure a high level of protection against counterfeiting and falsification. Its purpose is to strengthen the legal protection of Euro banknotes and coins in time for their introduction on the 1st January 2002. The regulation covers the processing of technical and statistical information relating to counterfeiting, the processing of operational and strategic data, and co-operation and mutual assistance.

Under the terms of the regulation, credit institutions, and any other institutions engaged in the sorting and distribution to the public of notes and coins as a professional activity, including establishments whose activity consists in exchanging notes and coins of different currencies, such as bureaux de change, shall be obliged to withdraw from circulation all Euro notes and coins received by them which they know or have sufficient reason to believe to be counterfeit. They shall immediately hand them over to the competent national authorities. Each Member State shall take the necessary measures to ensure that the establishments which fail to discharge their obligations shall be subject to effective, proportionate and deterrent sanctions.

The regulation also contains provisions dealing with:

· Gathering and access of technical and statistical data by the competent national authorities and the role of the ECB

· The obligation of the competent national authorities to transmit counterfeit notes and coins for identification to the National Analysis Centres (NAC) or National Coin Analysis Centres

(NCAC) of the Member States - to be established by the Member States - and to communicate their findings to the ECB

· Co-operation amongst the competent national authorities to protect the Euro against counterfeiting

· Centralisation of information at national level

· Definition of competent national authorities (the remaining open question on this issue was resolved by the adoption of a Council declaration which takes note of the existing situation in two Member States concerning the competence of police and judicial authorities)

· Relations with third countries and relevant international organisations

· Unauthorised notes

The regulation is based on article 123 (4) ECT for Eurogroup members. A parallel regulation based on article 308 ECT will ensure that the regulation applies equally to Member States outside EMU.

The European Central Bank delivered its opinion on 20 December 2000. The European Parliament has been consulted but has not yet delivered its opinion. The agreed texts, will be sent to the European Parliament so as to enable it to take them into account when drafting its opinion. The text will also be communicated to the ECB for information.

It is to be noted that the protection of the Euro against criminal activity in the context of the criminal justice systems of the Member States will be secured by a third pillar instrument currently being examined by Justice and Home Affairs working groups.

- Issues related to Euro coins - Council conclusions

Use of EURO coins and tokens for familiarising persons suffering from sensory or intellectual disabilities

1. For the broad acceptance of the Euro the population should be in a position to recognise the Euro banknotes and coins. Training of vulnerable groups of the population is of particular importance. Ongoing action is taking place in all Member States for that purpose.

2. The ECB, in collaboration with the Commission and the European representatives of vulnerable groups, is preparing dummy banknotes designed for training. The Commission, in collaboration with the Mint Directors and the European representatives of vulnerable groups, is preparing appropriate Euro tokens. Ministers welcome these initiatives.

3. Ministers consider that the vulnerable groups should also have the possibility to familiarise themselves with the real Euro coins on the available premises of the Mints, in the Euro coin Test Centres or in other secure locations to be organised by Member States in collaboration with the representatives of vulnerable groups at national level.

Adapting the conditions for loans of EURO coins and EURO tokens to relevant industries

4. Further to the Council conclusions of 14 December 2000 with respect to the adjustment of coin-operated machines, Ministers agreed on the adaptation of the conditions for loans of Euro coins and/or tokens to the coin-operated industry. According to that agreement, Member States may reduce, to specified levels, the financial guarantees applicable to such loans as from 1 April and 1 July 2001 respectively.

 

 

SUPPLEMENTARY AND AMENDING BUDGET 1/2001 CONCERNING BSE RELATED MEASURES

The Council confirming an agreement reached in COREPER by qualified majority established the Draft Supplementary and Amending Budget (DSAB) 1/2001 to finance a package of BSE related measures agreed by the Agriculture Council at its January meeting.

The DSAB makes a provision for additional expenditure of EURO 971 million -of which EURO 726 million will be funds drawn from the available margin under budgetary sub heading 1a. The EURO 726 million will be covered entirely by the surplus recovered from the previous year. The remaining EURO 245 million will come from adjustments in forecasts for agricultural expenditure resulting from an adapted Euro/Dollar exchange rate, in line with article 8 of the Council Regulation of 26 September 2000 on budgetary discipline.

Following the adoption of the DSAB, the Council, heard a presentation from Commissioner SCHREYER on possible future budgetary consequences of the BSE crisis and held a brief exchange of views on this subject. During the debate a number of ministers underlined that any new BSE related expenditure should not breach the upper limits available under sub heading 1a. Other delegations, voiced their concern to the way the surpluses from Structural Fund appropriations for the years 1999/2000 were used for the financing of the additional agriculture expenditure.

The President concluded the debate by stating that :

- with reference to the conclusions which were adopted by the European Council in Nice, the Council reminds that the financial perspective must be respected, event if additional measures would be needed in connection to BSE;

- the Council calls attention to the fact that the Commission, in accordance with the Council regulation on budgetary discipline, should present proposals for savings if forecasts show that the financial perspective is threatened without any delay and at the latest at the occasion when adopting the 2002 PDB.

 

 

E- COMMERCE - COMMISSION COMMUNICATION

The Council heard a presentation by Commissioner BOLKESTEIN of its Institution's communication on e-commerce and financial services, a key issue in the development of an integrated European Market in financial services which, as agreed by the Lisbon European Council, should be completed by 2005.

The e-commerce Directive is designed to ensure that on-line services can be freely provided throughout the Community. Its cornerstone is the "internal market clause" which will enable on-line providers to supply services throughout the Union based on the rules of the Member State where they are established. The Directive provides for a number of derogations from the internal market clause and creates a distinct regime in respect of electronic cross-border trade from that using other distance selling modes. In particular the Communication looks at the way the recently adopted e-commerce directive can interact with existing and future financial services legislation.

The Commission, in order to overcome the significant divergences in national rules, which fragment the financial services internal market proposes a new policy framework covering three policy areas :

- a programme of convergence covering contractual and non-contractual rules. To pave the way for a country approach to work in practice covering all financial services sectors and distance trading modes, further convergence is required in core marketing rules and at the service or sector specific level to provide high quality and comparable information to consumers. For contractual obligations, consideration will be given to how retail financial services can be freely offered throughout the Community in a framework of legal certainty;

- targeted steps to encourage consumer confidence in cross-border redress and internet payments. A Community-wide network of financial services complaints bodies will be established to provide effective and rapid out of court redress on a cross-border basis. Steps will be taken to improve security and provide consumers with legislative safety when making payments on-line within the Union;

- enhanced supervisory co-operation. Host state authorities are increasingly dependent on the authorities in the country where the provider is established. The Commission, together with Member States, will keep the arrangements for the monitoring of cross-border services under continuous review.

In a first exchange of views, Ministers had the opportunity to comment on the principles underlying the Commission communication and in particular the appropriateness of the "internal market clause" based on the principle of the country of origin.

 

 

UCITS

The Council briefly considered a Presidency compromise on the outstanding issues relating to the second UCITS Directive (amending Directive 85/611/EEC on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investments in transferable securities). The Council referred the draft Directive back to COREPER for further work with a view to reaching agreement before the 1st March 2001. Such an agreement would pave the way for the simultaneous adoption by that date of a Common Position on the two related UCITS directives currently before the Council, as agreed during the orientation debate of 17 July 2000.

The Directive under discussion today aims to boost levels of consumer protection and confidence in financial products by introducing regulations on management companies and a simplified prospectus. Its sister directive - the text of which was agreed by the Council on 17 October 2000- aims, in particular, to extend the list of assets in which an undertaking for collective investment may invest.

During their debate, Ministers addressed the remaining open questions, in particular capital adequacy requirements for UCITS management companies. In this respect, Ministers sought agreement on three specific issues namely, the level of initial capital requirements, whether ongoing capital should be required and at what level, and finally to what extent, if at all, the ongoing capital requirement could be covered by bank or insurance companies' guarantees.

 

 

 

IMPLEMENTATION OF THE STABILITY AND GROWTH PACT

The Council, continuing its cycle of annual review of Member States Stability or Convergence Programmes, examined the programmes of Denmark, Ireland, Greece, France, Italy, Austria and the United Kingdom, and adopted its opinions on these programmes as well as a Recommendation concerning Ireland and a Decision to publish this Recommendation.

The Council also agreed to make the opinions public.

The texts of the Council opinions and the Recommendation on Ireland are reproduced here-after :

- Danish updated Convergence Programme (2000-2005)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies( 1) , and in particular Article 9 (3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001 the Council examined Denmark’s updated Convergence Programme, which covers the period 2000-2005. The updated Convergence Programme foresees general government budgetary surpluses of between 2.6-2.9 % of GDP over the entire period and projects the gross consolidated debt to be reduced to 34 % of GDP in 2005. In 2000 the budget surplus turned out to be higher than earlier projected and amounted to 2.7 % of GDP, mainly due to stronger-than-expected growth.

The macroeconomic scenario assumed in the updated Programme projects real GDP growth, following an upward revision to 2.4 % in 2000, to slow down to around 1.7 % annually for 2001-2005. The Council notes that this growth scenario has been lowered from the previous update and that the Programme’s assumptions on productivity rises are moderate by international comparisons. Given the robust performance of the Danish economy in recent years, in particular the buoyant investment in equipment, and the structural reforms undertaken, a somewhat stronger growth and productivity performance could be expected. Moreover, such moderate productivity rises could imply a further loss in cost competitiveness for Danish companies if relative wage increases again turn too high.

The inflation rate started to rise in 1999 and has remained relatively high in 2000. The updated Programme expects inflation to gradually decline up to 2002 as externally induced price rises should taper off and wage growth should turn slightly more moderate in the light of a weaker domestic demand growth. While the Council considers that the inflationary outlook, as assumed in the updated Programme, seems plausible, the Council reiterates its recommendation to the Danish government to take further actions in case of significant upward deviations( 2), including budgetary ones, the more so as ERM2 membership clearly limits the monetary policy's room of manoeuvre in addressing inflationary pressures.

 

The Council notes with satisfaction that Denmark has continued to fulfil the convergence criterion on the long-term interest rate and that the exchange rate has remained stable vis-à-vis the Euro, also after the referendum on 28 September 2000.

Regarding government finances the Council welcomes that the Danish authorities maintain their ambition of large budgetary surpluses. As a result, Denmark continues to clearly fulfil the requirement of the Stability and Growth Pact of a budgetary position of "close to balance or in surplus" over the entire period covered by the Programme.

The budgetary consolidation strategy outlined in the previous update of the Programme is largely upheld, with a declining primary expenditure to GDP ratio and tax burden over the programme period. However, for the year 2001 the updated Programme projects a small increase in both the primary expenditure ratio and the tax burden. The Council would have preferred that the decline in both ratios was implemented without disruption.

The Council calls on all levels of general government to make efforts to limit the real increase in public consumption to the target of an annual 1 %. Furthermore, in 2001 local and regional governments are expected to raise taxes clearly above the agreements with the central government. As these agreements between the central and lower levels of government, aiming at restricting increases in public consumption and taxes, frequently have been exceeded in the past, the Council invites the Danish government, in line with the recommendations in the Broad Economic Policy Guidelines, to strengthen the institutional framework, to avoid further slippage in the future.

The Council welcomes the Danish authorities’ ambition to continue to substantially lower the ratio of gross debt to GDP with a view to preparing for the forthcoming financial burden of an ageing population. The focus on longer-term sustainability issues in the updated Programme is welcomed and the Council encourages the Danish government to continue its efforts in preparing to cater for the ageing population.

The Council invites the Danish authorities to maintain the prominent place of structural reforms on the policy agenda. In particular, efforts to raise labour supply could prove necessary. The Council therefore encourages the authorities to consider lowering taxes on labour income also beyond 2002, for which a tax reduction is already planned. However, given that the Danish economy currently seems to be operating at a level slightly above its potential, such a tax cut would need to be compensated by offsetting budgetary measures in order not to add to the risk of overheating.

 

- Ireland : 2000 update of the Stability Programme (2001-2003)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies( 3) , and in particular Article 5-(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001 the Council examined the 2000 update of Ireland's Stability Programme, which covers the period 2001-2003.

The Council notes that the Irish economy continues to grow rapidly in 2000, with real GDP growth of 10.7% expected in the 2000 update. Employment growth in 2000 is estimated at 4.5%, with the unemployment rate declining further to 4.1% on average. Inflationary pressures have intensified. Average HICP inflation rose to -5.3% in 2000. While this upsurge in price inflation is partly due to external and temporary factors, which are expected to gradually fall out of the consumer price index, domestically-generated inflation has increased too, house price inflation remains very high and wages are rising rapidly.

As a result of strong economic growth, the projections in the 1999 update of the Stability Programme for the improvement in the budgetary situation were exceeded by a large margin. The Council welcomes the fact that the general government balance for 2000 remains in substantial surplus, estimated to be around 4.7% of GDP, and that another sharp reduction in the general government debt ratio was achieved.

Projections for the period 2001 to 2003 show an average surplus ratio of 4.2%, with the debt ratio declining further to less than one quarter of GDP by 2003. The Council welcomes the fact that, as in the original programme and its 1999 update, Ireland fully and comfortably fulfils the Stability and Growth Pact obligations throughout the period covered. The projected general government surplus is clearly sufficient in each year to provide a safety margin against breaching the 3% of GDP reference value in the event of normal cyclical fluctuations.

The macroeconomic scenario underlying these projections assumes a gentle decline in real GDP growth and in inflation over the period. The positive output gap, after an estimated 4.5% of trend GDP in 2000, is expected to peak in 2001 at 5.4% and to gradually decline thereafter. In this context, the Council considers that the stimulatory nature of the budget for 2001 poses a considerable risk to the benign outlook in terms of growth and inflation portrayed in the 2000 update. The Council considers that this budget - the main measures of which are indirect and direct tax cuts and substantial increases in current and capital expenditure – is pro-cyclical. The Council finds that it will give a boost to demand of at least 0.5% of GDP and that its possible supply effects are likely to be small in the short term, thereby aggravating overheating and inflationary pressures and widening the positive output gap.

In particular, the strategy of inducing labour force increases through an alleviation of the direct tax burden, which was recommended in the 2000 BEPG with respect to the labour market,- may have become less effective than in the past because it took place in the context of an expansionary budgetary policy, and the tightness of the labour market could well hamper further attempts at encouraging wage moderation with direct tax cuts. Further, while indirect tax cuts have a once-and-for-all effect on the price level, they probably have no lasting effects on the rate of inflation but clearly further stimulate demand.

Given that the monetary policy is now set for the euro area as a whole and no longer available as an instrument at national level, other policies, including budgetary policies, must be used more actively. Against this background, the Council finds that the planned contribution of fiscal policy to the macroeconomic policy mix in Ireland is inappropriate. The Council recalls that it has repeatedly urged the Irish authorities, most recently in its 2000 broad guidelines of the economic policies, to ensure economic stability by means of fiscal policy. The Council regrets that this advice was not reflected in the budget for 2001, despite developments in the course of 2000 indicating an increasing extent of overheating. The Council considers that Irish fiscal policy in 2001 is not consistent with the broad guidelines of the economic policies as regards budgetary policy. The Council has therefore decided, together with this Opinion, to make a recommendation under Article 99(4) of the Treaty establishing the European Community with a view to ending this inconsistency.

The Council welcomes the fact that the 2000 update addresses the issue of structural reform. In particular, the Council notes with satisfaction the progress made in the area of long-term sustainability of the public finances with the creation of a National Pensions Reserve Fund, which at end-2000 already amounts to about 6.3% of GDP. The Council also welcomes continued efforts to enhance the quality of public finances through reform of the tax/benefit system and an increased focus on capital expenditure in response to Ireland’s infrastructural needs.

-

Ireland - Council Recommendations

with a view to ending the inconsistency with the broad guidelines of the economic policies in Ireland - Application of Article 99(4) of the Treaty establishing the European Community

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 99(4) thereof,

Having regard to the recommendation of the Commission,

Whereas on 19 June 2000, the Council recommended the Irish authorities, in its recommendation on the Broad Guidelines of the Economic Policies of the Member States and the Community, to be ready, already in 2000, to use budgetary policy to ensure economic stability given the extent of overheating in the economy and to gear the budget for 2001 to this objective;

Whereas on 6 December 2000, Ireland submitted the 2000 update of the Stability Programme, which contains objectives in the budgetary area for the period up to 2003 and which should be read in conjunction with the budget for 2001 released on the same day;

Whereas the Council, in its opinion of 12 February 2001 on the 2000 update of the Irish Stability Programme in accordance with Article 5(3) of Council Regulation (EC) No 1466/97( 4), considers that Irish budgetary plans for 2001 are not consistent with the broad guidelines of the economic policies as regards budgetary policy;

Whereas proper functioning of the co-ordination of economic policies in the euro area requires a timely use of instruments available under paragraph 4 of Article 99;

Whereas the European Council of Helsinki on 10 and 11 December 1999 emphasised that existing processes and arrangements for economic policy co-ordination by the Council should be effectively applied and that policy implementation should be closely monitored;

Whereas in recognition of the following:

The Irish economy has shown a bright performance and continued to grow very rapidly in 2000, with real GDP growth just over 10% expected for 2000. As a result, the budgetary projections in the 1999 update of the Stability Programme have been exceeded by a large margin. The debt ratio is projected to decline to 24% of GDP by 2003. With a positive output gap, inflationary pressures in Ireland intensified in the course of 2000. HICP inflation was 5.3% on average in 2000. While the rapid rise in the rate of inflation in the course of 2000 is partly due to external and temporary factors which are expected to gradually fall out of the consumer price index, there has also been an increased contribution from domestically-generated inflation, which remains a cause of concern.

On 6 December 2000, the Irish budget for 2001 was presented. The main measures are: a direct tax package (consisting of cuts in tax rates and increases in allowances) with a full-year cost of around 1.5% of GDP; indirect tax cuts with a full-year cost of 0.4% of GDP; an 18% increase in voted current spending over the projected 2000 out-turn (about 40% of which is for pay expenditure) and a 29% increase in voted capital expenditure. The 2000 update of Ireland's Stability Programme projects a reduction of the general government surplus in 2001 of 0.4% of GDP from 4.7% of GDP, implying a deterioration in the underlying budgetary position.

The budget for 2001 will give a further substantial boost to demand in Ireland and its possible supply effects are likely to be small in the short term. It will therefore aggravate overheating and inflationary pressures and widen the positive output gap, which, according to the 2000 update, will peak at 5.4% of trend GDP in 2001.

 

1. The strategy of inducing labour force increases through an alleviation of the direct tax burden, which was recommended in the 2000 BEPG with respect to labour market, may have become less effective than in the past because it took place in the context of an expansionary budgetary policy, and the tightness of the labour market could well hamper further attempts at encouraging wage moderation with direct tax cuts. Further, while indirect tax cuts have a once-and-for-all effect on the price level, they probably have no lasting effects on the rate of inflation but clearly further stimulate demand. Given the current stance of the single monetary policy set for the euro area, the planned contribution of fiscal policy to the macroeconomic policy mix is inappropriate.

2. The Irish budget for 2001 is expansionary and pro-cyclical and therefore inconsistent with the Council's 2000 broad guidelines of the economic policies, which state that the Irish authorities should "be ready, already in 2000, to use budgetary policy to ensure economic stability given the extent of overheating in the economy; gear the budget for 2001 to this objective". The Commission estimates that restrictive measures equivalent to at least 0.5% of GDP would offset the expansionary nature of the budgetary plans for 2001.

HEREBY RECOMMENDS:

1. To remove the inconsistency with the broad guidelines of the economic policies, engendered by the budget plans for 2001, the Irish government should take countervailing budgetary measures during the current fiscal year. Under the macroeconomic assumptions of the 2000 update in the Stability Programme, this should ensure that no reduction in the underlying budgetary surplus from 2000 takes place.

2. The Commission is invited to report during 2001 on economic and budgetary developments in Ireland. The Council will closely monitor these developments and in particular assess consistency with the broad guidelines of the economic policies.

3. This Recommendation is addressed to Ireland.

 

Done at Brussels, [12 February 2001].

For the Council,

The President

-

Greece: 2000 Stability Programme (2000-2004)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of

the surveillance of budgetary positions and the surveillance and co-ordination of economic

policies( 5), and in particular Article 5(2) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001, the Council examined the first Stability Programme of Greece which covers the period 2000-2004. The stability programme was submitted by the Greek government within six months from the Council decision( 6) of 19 June 2000 on the adoption by Greece of the single currency from 1 January 2001.

The stability programme is projecting robust real GDP growth rates, accelerating from 4.1% in 2000 to 5.5% in 2004, supported by high investment rates, strong exports and sustained private consumption. The Council considers the real GDP growth forecasts included in the stability programme as ambitious, at the upper range of possibilities. The programme presents also an alternative scenario projecting lower, though still robust, real GDP growth based in particular on a higher assumption for imported oil prices.

On the basis of the baseline macroeconomic scenario, the programme is projecting a general government surplus of 0.5% of GDP in 2001 which will rise to 2% of GDP in 2004. The programme is based on the fiscal consolidation strategy followed until now by the Greek convergence programmes, consisting in maintaining high primary surpluses supported, however, by a significant reduction in interest payments as percent of GDP, resulting from lower interest rates and a declining government debt ratio. The general government debt ratio is expected to decline by 20 percentage points of GDP, to 84.0% of GDP in 2004.

The Council considers that the projected budgetary position provide adequate safety margin against breaching the 3% of GDP deficit threshold in normal circumstances and is in conformity with the requirements of the Stability and Growth Pact. The Council commends the fiscal consolidation strategy of the programme, centered on high primary surpluses, which is essential in reducing rapidly the still very high government debt ratio and prepare for future challenges, notably the budgetary burden from ageing population. The Council considers, however, that such a strategy should be primarily based on an adequate control of primary expenditure increase through clear and binding norms with aim of reducing the current expenditure ratio.

The Council warns that under conditions of high GDP growth, according to the projections, combined with easing monetary conditions, renewed inflationary pressures may persist; the Council considers that risks of overheating of the economy need to be contained through determined support from domestic policies, mainly a tight fiscal stance, in particular through restraint on current expenditure, and by ensuring wage moderation.

The Council notes that the programme includes a number of market liberalisation measures, the setting-up of an appropriate regulatory framework and structural reforms in the labour, product and capital markets while a reform of the social security system is announced for 2001. The Council considers, however, that the ambitious growth and employment objectives of the stability programme, and future challenges, require a more determined attitude in the reform effort; the Council encourages the Greek government to accelerate the implementation of necessary reforms, in particular in the labour market and the social security system, in order to enhance the potential of the economy, strengthen its competitiveness and improve the conditions for sustainable growth and employment creation.

The Council considers that the stability programme is consistent with the Broad Economic Policy Guidelines. The Council invites the Greek authorities to pay particular attention to the need for reform of the pension system, and invites them to address the budgetary consequences of ageing in the next update of the stability programme.

- France: 2000 update of the Stability programme (2002-2004)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies( 7), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001, the Council examined the updated Stability Programme of France which covers the period 2001-2004.

Economic growth has been robust over the past two years, broadly in line with the projections of the 1999 updated stability programme. In 2000, the French economy registered a third consecutive year of strong GDP growth with relatively low inflation. The unemployment rate continued to decline and reached 9.2% in November, down from 10.9% one year earlier. Despite this sharp fall in unemployment, wage and price developments remained very moderate. Headline inflation increased from 0.5% in 1999 to 1.7% in 2000 mainly due to higher oil prices.

The Council notes that, building on a more favourable outcome than expected in 1999 and an expenditure growth slower than initially projected, the general government deficit for 2000, estimated at 1.4% of GDP, will be lower than initially expected; the government debt ratio in 2000, estimated at 58.4% of GDP, was also lower than targeted by one percentage point. The Broad Economic Policy Guidelines aim at using better than expected revenues to achieve faster reduction in the government deficit. Therefore, the Council finds that a better budgetary outcome could have been achieved in 2000, taking into account the favourable economic and public finances developments.

The budgetary projections of the updated programme are based, as in the past, on two macroeconomic scenarios, a cautious scenario, in which potential growth stays at its current level of 2.5% a year, while in the favourable scenario, potential output is estimated to gradually increase to 3% due to stronger investment and employment growth. From 2001, real GDP growth is projected to follow one of the two non-inflationary scenarios. The favourable one is presented as the economic policy target and the most likely projection. In both cases, inflation is projected to stay at a low level over the entire period.

The Council considers that the two macroeconomic scenarios of the programme provide a plausible range of values for GDP growth between 2002-2004 and that the macroeconomic performance of France in recent years indicates a probable rise in the capacity of the French economy to sustain higher non-inflationary growth than in the past, resulting from a rise in capital accumulation and a fall in structural unemployment; the Council considers, in view of the above, the macroeconomic projections of the favourable scenario as attainable.

The updated programme is projecting a general government surplus of 0.2% of GDP in 2004 under the favourable scenario and a deficit of 0.5% under the cautious one. The government debt ratio is expected to decrease from 58.4% in 2000 to 54.5% or 53% according to the alternative macroeconomic scenarios. These developments reflect mainly structural progress; however, the Council regrets that a deficit remains in 2004 under the cautious scenario. Even if the projected budgetary position provides an adequate safety margin against breaching the 3% of GDP deficit threshold in normal circumstances - in conformity with the requirements of the Stability and Growth Pact - the Council considers that the French government should seek a situation of budgetary balance in 2004 also under the cautious scenario and to advance the timing of budgetary surplus ahead of 2004 under the favourable one. This would be in line also with its recommendation on the 1999 updated stability programme.

 

The Council welcomes that an important tax reform is being implemented without compromising the global fiscal trend. This reform is in line with the recommendations of the Broad Economic Policy Guidelines concerning the measures aimed at improving the functioning of the labour market. The Council commends the budgetary strategy based on control of real expenditure growth; however the Council considers that a budgetary policy based on expenditure ceilings requires an

effective system to rein in spending as soon as any slippage is detected especially in the field of health care expenditure; consequently the Council invites the French government to introduce the appropriate mechanism enabling the respect of the expenditures norms. The Council notes that the increase in expenditure included in the Finance Law for 2001, 1.8% in real terms, accounts for a significant part of the norm for the cumulated increase for the period 2001 to 2003 fixed at 4% in real terms in the 1999 updated programme. Moreover the Council notes that the norm for the cumulated increase in expenditures has been revised upwards, real spending being allowed to increase by 4.5% in real terms from 2002 to 2004. In the view of the Council, a lower increase in expenditure would be desirable to allow a faster reduction in the government deficit.

The Council considers, further, that available budgetary margins should be used, as a matter of priority, in strengthening the budgetary position and preparing for future challenges, notably the budgetary burden from the ageing of population. In this respect, further progress with pension reform would be welcome.

 

- Italy: updated Stability Programme (2000-2004)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and co-ordination of economic policies ( 8), and in particular Article 5 (3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001 the Council examined Italy's updated stability programme, which covers the period 2000-2004. The Council welcomes the revision of the objectives for the general government budget balance in 2000 and beyond, as recommended in the Broad Economic Policy Guidelines. The Council notes favorably that the reduction of the debt ratio to below 100% of GDP in 2003 is confirmed in spite of the higher target in 2000 compared to the first update of the stability programme. However, considering the still high debt ratio and the future challenges to the long-term sustainability of public finances from an ageing population, the Council considers that Italy’s revised fiscal targets could have been more ambitious.

The Council notes Italy’s intention to continue the budgetary strategy outlined in the initial programme, which aims at keeping the primary surplus at a high level and reducing current expenditure as a percentage of GDP, in parallel with some easing of the tax burden. Higher than expected tax receipts are assumed to have provided backing for the tax and social security contribution cuts outlined in the programme. The primary surplus is expected to increase as a percentage of GDP, averaging 5.5% of GDP over the period. The underlying budgetary position over the programme period provides a safety margin against breaching the three percent of GDP deficit threshold in normal cyclical fluctuations, implying that Italy would continue to satisfy the requirements of the Stability and Growth Pact up to 2004.

The Council observes that there are risks that the budgetary framework outlined in the updated stability programme may not materialise as planned. The macroeconomic projections, which assume a significant acceleration in GDP growth from an annual rate of 1.4% in 1999 to over 3% in 2002-2004, may be optimistic also in the light of recent developments in the external environment; on the other hand, the assumptions on interest rates are rather conservative in light of recent developments in financial markets.

 

The available data do not allow at present a conclusive appraisal of the implementation of the budget in 2000. However if the general government deficit were higher than the new objective of 1.3% of GDP, Italy would not have fully complied with last year’s Council opinion and with the recommendations of the June 2000 BEPG. As for 2001 and beyond, there are concerns that the increase in planned revenues, which has provided backing for the tax and social security contribution cuts, may not turn out to be fully structural and that the expenditure-reducing measures introduced with the Financial Law for 2001 could not be fully effective.

In the light of the considerations made above, the Council urges Italy to firmly commit itself to respect the programme’s objectives. Primary surpluses should remain at the high levels projected in the programme. Any deviation from the planned deficit and primary surplus outcomes should be promptly addressed and corrective measures taken. This should be ensured through a tight control of current primary expenditure. The Council encourages Italy to accompany the reduction in the ratio of current primary expenditure to GDP with a more effective and more comprehensive rationalisation of public spending, aimed at improving the supply-side conditions of the economy.

Moreover, even though Italy fulfils the requirements of the Stability and Growth Pact, it should take every opportunity to improve future budgetary targets and speed up the consolidation process, in order to accelerate the reduction of the government debt ratio. The Council recommends that future decisions to reduce the tax and social security contributions burden should be matched by offsetting expenditure cuts.

In line with both its Opinion( 9) on the original stability programme and its Opinion on the first updated programme( 10), the Council notes that Italy has not taken further steps to address the medium-term structural challenges to public finances from pension and other age-related budgetary expenditures. The reassessment of the parameters of the pension system scheduled to take place later this year should not be postponed. The Council urges Italy to address this issue with determination. Although the Financial Law for 2001 includes a few isolated measures on pensions, the Council advocates a more comprehensive approach. The reassessment of the pension system should take place within the framework of a broader overhaul of the Italian welfare system.

 

- Austria: Updated Stability programme (2000-2004)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council regulation (EC) No. 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies( 11), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001 the Council examined the updated stability programme for Austria which covers the period 2000-2004.

The updated programme envisages a decline in the general government budget deficit from 1.4% of GDP in 2000 to a balanced position in 2002 and the following years. The government gross debt is expected to decrease from 61.1% of GDP to below the 60% reference value in 2002 and further to 55.3% in 2004. The Council notes with satisfaction that, in compliance with its recommendation on the previous update of the programme( 12), the current programme envisages a much faster reduction of the government deficit. Moreover, the Council acknowledges that the budgetary goals are to be achieved without resorting to the one-off measures included in the previous update.

 

The Council notes that, in spite of higher-than-projected growth, the estimated deficit for 2000 in the current update is not lower than projected in the previous programme once originally unbudgeted UMTS proceeds are excluded. The Council recommended in its opinion on the previous update and in the recommendations of the June 2000 BEPG that, in the event of higher growth, a better deficit outcome should be achieved. The available data do not allow at present a conclusive appraisal of the implementation of the budget in 2000. If, however, the outcome for the general government deficit were not lower than the objective of 1.7 % of GDP, Austria would not have fully complied with last year's Council opinion and the BEPG recommendations.

The deficit projections of the programme are based on a macro-economic scenario expecting output growth to decline from its cyclical peak of 3.5% in 2000 to 2.3 % in 2003 and resume to 2.5% in 2004, amounting to an annual average growth of 2.6% over the forecast period.

The Council considers that the expected growth is feasible in view of the presently good supply and demand conditions for the Austrian economy.

The underlying budgetary position implicit in the deficit goals is in line with the requirements of the Stability and Growth Pact from 2001 onwards, i.e. they provide Austrian government finances with a large-enough safety margin to withstand a normal cyclical downturn without breaching the 3 % of GDP reference value for the deficit. The Council notes with satisfaction that, in accordance with its recommendations, the Stability and Growth Pact is now respected earlier, which is appropriate in view of the currently favourable economic conditions.

However, the Council notes that in the initial years of the programme the deficit reduction relies heavily on revenue side measures. As a consequence, the already high tax burden in Austria rises further in 2001, thereby more than offsetting the effects of the income tax reform 2000. The Council, therefore, invites the Austrian government to consider measures which permit a significant decline in the tax burden, especially on labour, while preserving the budgetary adjustment path.

The Council considers that, to achieve a balanced budget by 2002, a strict budgetary implementation at all levels of government is crucial. This seems essential in view of uncertainties regarding the savings estimates of the public administration and pension reforms. At the level of the Bundesländer the expenditure cuts necessary to achieve the surpluses required by the national stability pact largely remain to be defined.

The Council acknowledges that, by 2003, more than half of the total envisaged consolidation originates from expenditure savings. This requires that achievements in budgetary consolidation are locked in and budgetary discipline is maintained in the years 2003 and beyond. Any additional spending or further revenue reductions, including those envisaged in the programme, should be made strictly contingent on compensatory expenditure cuts. In light of the medium- and longer-term challenges to public finances, not least due to population ageing, and the need to render government finances more conducive to investment and growth the Council considers that fiscal adjustment needs to be continued with determination.

The Council acknowledges ongoing structural reforms of the Austrian economy in line with the Broad Economic Policy Guidelines. The recent reform of early retirement is particularly welcome. However, the Council encourages the Austrian government to continue its reform efforts in order to better achieve and safeguard sustainable government finances in the medium and longer term, namely in the pension system and the health care sector. The Council invites the authorities to provide more information on this issue in the next update of the programme. The Council also encourages the Austrian government to continue determinedly with the reforms of product and capital markets, with a view to enhancing competition, fostering the provision of risk capital and improving entrepreneurial dynamism and corporate governance.

 

 

- United Kingdom: Updated Convergence Programme (2000-2005)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council regulation (EC) No. 1466/97 of 7 July 1997 on the strengthening of

the surveillance of budgetary positions and the surveillance and co-ordination of economic

policies( 13) , and in particular Article 9 (3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 12 February 2001 the Council examined the updated Convergence programme of the United Kingdom which covers the period 1999-00 to 2005-06. The programme envisages a government surplus of 1.1% of GDP in 2000-01, a smaller surplus in 2001-02, balance in 2002-03 and deficits around 1% of GDP in the three following years to 2005-06. The Council considers it appropriate that the programme stresses the securing of macro-economic stability supported by sound monetary and fiscal policies and continued structural reform.

The programme is built upon a macroeconomic framework showing a return of GDP growth from 3% in 2000 to close to trend – put at 2½% - thereafter, which the Council considers to be realistic if cautious. Moreover, the projections in the programme for the public finances are, for reasons of caution, based on a lower assumption for trend growth - namely 2¼%.

With respect to inflation and interest rates, the United Kingdom continues to fulfil the convergence criterion with some margin. The Council notes that the monetary framework of inflation targeting, with operational responsibility for interest rate changes given to the Bank of England, has been an important condition for securing low inflation expectations. The Council notes that under the current policy framework, the programme projects the UK inflation target to be achieved over the programme period.

The United Kingdom has fulfilled the convergence criterion on the long-term interest rate for some time. This helps confirm the credibility given to the UK’s stability oriented framework for macro-economic policy. It notes that while there are signs of reduced exchange rate volatility, it cannot be concluded that this policy framework has delivered a stable exchange rate. Therefore the Council recommends that the United Kingdom continue with the stability oriented policies with a view to securing exchange rate stability which, in turn, should help re-enforce a stable economic environment.

The general government finances are in 2000/01, 2001/02 and 2002/03 close to balance in underlying terms thus fulfilling the requirements of the Stability and Growth Pact. However, the Council notes that a persistent deficit of 1% of GDP emerges in the latter years of the plan; larger than the deficits of around ½% of GDP in the two final years of the previous update. This would not be in line with the prescription of "close to balance or surplus" contained in the Stability and Growth Pact. The Council acknowledges that this emerges in the projections as a result of the use of a very cautious trend growth assumption of 2.25 % per annum and as a consequence of increased government investment as a share of GDP within the expenditure totals. Should trend growth be higher, as expected, compliance with the BEPG will require more ambitious budgetary outcomes. While the specific recommendation to the UK in the BEPG advised the UK to pursue a policy of substantially raising the ratio of government fixed investment to GDP, it also recommended to do so within the context of firm control of government expenditure, thereby keeping the underlying position of government finances broadly unchanged. Therefore, the Council encourages the government to be alive to any deterioration in the public finances that would take them away from the terms of the Stability and Growth Pact and, if necessary, to take remedial action.

 

The Council notes that the government gross debt ratio in the United Kingdom remains below 60% of GDP and is expected to fall to 40% in 2000-01. The Council welcomes the envisaged further reduction of the gross debt ratio to 35% of GDP by 2004-05.

The Council welcomes the structural reforms included in the programme. It notes, with approval, that the progress on economic reforms should help to raise productivity levels to those of competitors and secure further improvements in the labour market.

The Council notes that the programme provides both long-term projections of public finances and a description of policies that could be addressed to minimize the impact of ageing, and welcomes the sustainable position which is projected.

 

LUNCH ITEMS

Over lunch the Presidency informed Ministers of the state of play regarding contacts with third countries in relation to negotiations concerning the taxation of savings.

The Eurogroup President, Belgian finance Minister REYNDERS, gave a debriefing on that morning's Eurogroup discussions which covered the following topics: strengthening economic policy co-ordination within the Eurogroup; involving fiscal co-ordination and structural policies; and the approach to follow in the Broad Economic Policy Guidelines with respect to the Euro area.

Eurogroup Ministers also held informal talks on the Irish Stability Programme.

Mr MAYSTADT, President of the EIB, gave a brief overview of the banks activities in the year 2000 : overall lending, activities in the accession countries and the "Innovation 2000 initiative" related to the Luxembourg Process.

 

ITEMS APPROVED WITHOUT DEBATE

JUSTICE AND HOME AFFAIRS

Incentives and exchanges for legal practitioners in the area of civil law (Grotius - civil)

The Council adopted a Council Regulation extending, to cover the year 2001, the programme -established by Joint Action 96/636/JHA - of incentives and exchanges for legal practitioners in the area of civil law (Grotius – civil), as regards judicial co-operation in civil matters.

The "Grotius – civil" programme seeks in particular to foster mutual knowledge of legal and judicial systems amongst legal practitioners and to facilitate judicial co-operation between Member States in the area of civil law.

Denmark, in accordance with its Protocole annexed to the Treaty, will not participate in the programme.

 

RELATIONS WITH THE ASSOCIATED CCEE

Rules of origin - Decisions concerning Estonia and Slovakia

The Council agreed that the EU-Estonia and the EU-Slovakia Association Councils respectively should adopt by the written procedure Decisions concerning rules of origin.

In the first half of 1997 a system introducing pan-European cumulation of rules of origin was adopted. The system was amended twice in 1998 and 1999 with a view to extending its scope and improving its operation in certain respects. The present Commission proposals are designed to make certain new technical amendments.

In October 2000 the Commission submitted a set of proposals to the Council for the amendment of the Protocols on the definition of the concept of "originating products" and methods of administrative co-operation with the associated countries of Central and Eastern Europe and the EFTA and EEA countries.

For the CCEE these adjustments will be implemented by means of Decisions of the various Association Councils.

 

Slovenia - participation in the Community programme "LIFE"

The Council adopted a Decision concerning the Community position within the Association Council on the participation of Slovenia in the Community Financial Instrument for the Environment (LIFE).

It is recalled that regulation (EC) No 1655/2000 of the European Parliament and of the Council of 17 July 2000 concerning the Financial Instrument for the Environment and in particular Article 6 thereof, provides that LIFE shall be open to the accession candidate Central and East European countries in accordance with the conditions referred to in the Association Agreements concluded with those countries and on the basis of provisions of the Decision of the Association Council competent for each country concerned.

EXTERNAL RELATIONS

Morocco - implementation of Article 73 of the Association Agreement

The Council adopted a Decision on a Community position to be adopted in the Association Council on the implementation of Article 73 of the Euro-Mediterranean Agreement establishing an Association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part.

Article 73 of the Association Agreement provides for the setting up of a working party responsible for the continuous and regular implementation of social co-operation, including regular dialogue in the social field. The dialogue covers all problems concerning migration and illegal immigration. Given the importance of migration issues and implementation of the asylum and migration Action Plan for Morocco, the High Level Working Group on Asylum and Migration called for a forum for the exchange of views on such issues to be set up rapidly and for the working party referred to in Article 73 to be used for that purpose.

 

ANTI-DUMPING

Imports of potassium permanganate originating in the People's Republic of China

The Council adopted a Regulation imposing a definitive anti-dumping duty on imports of potassium permanganate originating in the People's Republic of China.

The present regulation provides that the anti-dumping measures currently in force with regard to imports of potassium permanganate originating in China should be maintained.

Thus, a definitive anti-dumping duty is hereby imposed on imports of potassium permanganate, originating in the People's Republic of China.

The amount of the duty applicable to the net, free-at-Community-frontier price, before customs clearance, shall be 1,26 EUR/kg.

 

ANTISUBSIDY

Imports of stainless steel bars originating in India

The Council has adopted a Regulation amending Regulation (EC) No 2450/98 imposing a definitive countervailing duty on imports of stainless steel bars originating in India.

The effect of the present regulation is to amend Article 1(2) of Council Regulation (EC) No 2450/98 by adding the following to the list of companies subject to measures:

Manufacturer

Rate of duty (%)

Taric additional code

– Hindustan Stainless, Plot No.165, Road No 1, Kalomboli Warehousing Complex, Kalamboli, Taluka – Panvel, Dist – Raigad, India.

16,1

8407

AGRICULTURE

Directive on the organisation of inspections in the field of animal nutrition

The Council adopted its common position with a view to the adoption of a Directive amending Directive 95/53/EC fixing the principles governing the organisation of official inspections in the field of animal nutrition and Directives 70/524/EEC, 96/25/EC and 1999/29/EC on animal nutrition.

Following a serious dioxin contamination occurred recently in products to be used in animal nutrition, it was considered necessary to improve the management of risks which would preclude the level of protection of human or animal health of the environment provided for in the Community Regulation on animal nutrition. This directive introduces provisions requiring the Member States to have in place contingency operational plans to deal with emergencies in the animal nutrition sector.

A system has already been established to enable the Member States to be informed by operators, at all stages of the feed producing chain, of certain cases of non compliance with the rules on undesirable products and substances. In view of both the experience gained and the similar arrangements provided for in the Community rules on general product safety, this directive will improve and extend this system to render it applicable to all cases where an operator finds that a product for animal nutrition poses a serious risk to human or animal health or to the environment.

At present there is an obligation to inform the other Member States and the Commission when a consignment of feed materials or feedingstuffs which is not in compliance with the maximum levels for undesirable substances or products is likely to be sent to other Member States. This rapid information exchange system is incorporated into Directive 95/53/EC. It sets standard procedures for its operation, so that it can be applied in future in all cases where a product endangers human health, animal health or the environment and for the purpose of improving the inspection system as a whole.

Directive on scrapie

Following the agreement reached at its session of December 19 last, the Council adopted the Directive amending Directive 91/68/EEC as regards scrapie.

Directive 91/68/EEC lays down animal health conditions for scrapie, covering placing on the market of ovine and caprine animals. In the light of scientific opinions obtained on several aspects of transmissible spongiform encephalopathies (TESs) the new Directive reviews the rules of the Directive 91/68.

 

INTERNAL MARKET AND CONSUMER AFFAIRS

Directive on general product safety

Following the agreement reached at its session of 30 November last, the Council adopted its common position with a view to the adoption of the Directive on general product safety (for details see Press release of 30 November 2000 N°13663/00(Presse 446-G).

 

 

EMPLOYMENT AND SOCIAL POLICY

Social exclusion action programme

Following agreement reached at the meeting of the Employment and Social Policy Council on 27/28 November 2000, the Council formally adopted its common position on the proposed Decision establishing a Community action programme to encourage co-operation between Member States to combat social exclusion. The common position will now be forwarded to the European Parliament for a second reading in accordance with the co-Decision procedure.

The Community action programme is part of the European strategy for combating poverty and social exclusion, as conceived by the Lisbon European Council in March 2000. Community-wide objectives have been defined in October 2000. Member States will submit national action plans for the first time in June 2001.

The programme and the national action plans aim at a better understanding of social exclusion, the mainstreaming of action to fight exclusion in Member States' and Community policies and the development of priority actions. Further details can be found in the press release no 13862/00 Presse 454.

 

TRANPARENCY

Public access to Council documents

The Council approved the reply to the confirmatory application made by Mr Adam CRAIG, the Danish, Finnish and Swedish delegations voting against.

 

 

 

 

 

 

 

________________________

Footnotes:

( 1) OJ L209, 2.8.1997

( 2) Council opinion of 28 February 2000 on the updated convergence programme of Denmark for the period 1999 to 2005

( 3) OJ L209, 02.08.1997

( 4) OJ L209, 02.08.1997

( 5) OJ L 209, 2.8.1997.

( 6) OJ L 167, 7.7.2000.

( 7) OJ L 209, 2.8.1997.

( 8) OJ L209, 2.8.1997.

( 9) OJ C68, 11.3.1999.

( 10) OJ C98, 6.4.2000.

( 11) OJ L209/1, 2.8.1997.

( 12) OJ C162/1, 10.6.2000.

( 13) OJ L209, 2.8.1997