4.XI.2008
COUNCIL OFTHE EUROPEAN UNION / EN
C/08/311
15067/08 (Presse 311)
(OR. fr)
PRESS RELEASE
2901st Council meeting
Economic and Financial Affairs
Brussels, 4 November 2008
President Christine LAGARDE
Minister for Economic Affairs, Industry and
Employment of France
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4.XI.2008
Main results of the CouncilThe Council approved a loan of EUR 6,5billion to Hungary, in coordination with the financial assistance provided by the IMF and World Bank, to enable Hungary to deal with the country's current financial crisis.
The loan will enable Hungary to cope with the heavy pressures on its financial markets and support its balance of payments in the medium term.
The ministers also reached agreement in principle on increasing the ceiling for financial assistance available for EU aid to the balance of payments in the event of financial difficulty of a Member State.
The Council reached agreement in principle on measures to strengthen the fight against VAT fraud, by ensuring that information on transactions is collected and exchanged between MemberStates more quickly, to enable more rapid detection.
Broad consensus was achieved (pending the lifting of a reservation) on new general arrangements for excise duties, which will enable a computerised control system to be implemented in order to combat excise duty fraud more effectively.
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CONTENTS1
PARTICIPANTS 5
ITEMS DEBATED
INTERNATIONAL INITIATIVES IN RESPONSE TO THE FINANCIAL CRISIS 7
REDUCED V.A.T. RATES 8
FIGHT AGAINST V.A.T. FRAUD 10
GENERAL ARRANGEMENTS FOR EXCISE DUTIES 11
ANTI-FRAUD AGREEMENT WITH LIECHTENSTEIN 12
CLIMATE CHANGE – EMISSIONS TRADING SCHEME 13
LISBON STRATEGY FOR GROWTH AND JOBS 13
MEETINGS IN THE MARGINS OF THE COUNCIL 14
OTHER ITEMS APPROVED
ECONOMIC AND FINANCIAL AFFAIRS
Support for Hungary to deal with the financial crisis 15
EU statistics - Council conclusions 15
Community guarantee to the EIB for projects outside the Community * 15
JUSTICE AND HOME AFFAIRS
Common Consular Instructions 16
EXTERNAL RELATIONS
Relations with Morocco 16
DEVELOPMENT COOPERATION
European Development Fund - Contributions for 2008 16
Cotonou Agreement - Republic of Guinea 17
RESEARCH
EU/USA - Cooperation on nuclear safety issues 17
ENVIRONMENT
Substances that deplete the ozone layer 17
STATISTICS
External trade statistics 17
TRANSPORT
EU/China - Agreement on Maritime Transport - Enlargement 18
EGNOS and Galileo - Regulatory procedure with scrutiny 18
APPOINTMENTS
Committee of the Regions 18
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PARTICIPANTS
The governments of the Member States and the European Commission were represented as follows:
Belgium:
Mr Didier REYNDERS Deputy Prime Minister and Minister for Finance and Institutional Reforms
Bulgaria:
Mr Plamen Vassilev ORESHARSKI Minister for Finance
Czech Republic:
Mr Miroslav KALOUSEK Minister for Finance
Denmark:
Mr Lars Løkke RASMUSSEN Minister for Finance
Germany:
Mr Peer STEINBRÜCK Federal Minister for Finance
Estonia:
Mr Ivari PADAR Minister for Finance
Ireland:
Mr Brian LENIHAN Minister for Finance
Greece:
Mr Georgios ALOGOSKOUFIS Minister for Economic Affairs and Finance
Spain:
Mr Pedro SOLBES MIRA Second Deputy Prime Minister and Minister for Economic Affairs and Finance
France:
Ms Christine LAGARDE Minister for Economic Affairs, Industry and Employment
Italy:
Mr Giulio TREMONTI Minister for Economic Affairs and Finance
Cyprus:
Mr Charilaos STAVRAKIS Minister for Finance
Latvia:
Mr Normunds POPENS Permanent Representative
Lithuania:
Mr Rimantas ŠADŽIUS Minister for Finance
Luxembourg:
Mr Jean-Claude JUNCKER Prime Minister, Ministre d'Etat, Minister for Finance
Mr Jeannot KRECKÉ Minister for Economic Affairs and Foreign Trade, Minister for Sport
Hungary:
Mr János VERES Minister for Finance
Malta:
Mr Richard CACHIA CARUANA Permanent Representative
Netherlands:
Mr Wouter BOS Minister for Finance, Deputy Prime Minister
Austria:
Mr Wilhelm MOLTERER Vice Chancellor and Federal Minister for Finance
Poland:
Mr Jan VINCENT-ROSTOWSKI Minister for Finance
Portugal:
Mr Emanuel AUGUSTO SANTOS State Secretary for the Budget, attached to the Minister for Finance
Romania:
Mr Eugen TEODOROVICI State Secretary for the Treasury and External Public Finance
Slovenia:
Mr Andrej BAJUK Minister for Finance
Slovakia:
Mr Peter KAŽIMÍR State Secretary, Ministry of Finance
Finland:
Mr Jyrki KATAINEN Deputy Prime Minister and Minister for Finance
Sweden:
Mr Anders BORG Minister for Finance
United Kingdom:
M. Stephen TIMMS Financial Secretary to the Treasury
Commission:
Mr Joaquín ALMUNIA Member
Mr Charlie McCREEVY Member
Mr László KÓVACS Member
Other participants:
Mr Lucas D. PAPADEMOS Vice-President of the European Central Bank
Mr Philippe MAYSTADT President of the European Investment Bank
Mr Xavier MUSCA Chairman of the Economic and Financial Committee
Mr Christian KASTROP Chairman of the Economic Policy Committee
ITEMS DEBATED
INTERNATIONAL INITIATIVES IN RESPONSE TO THE FINANCIAL CRISIS
The Presidency briefed the Council on the international initiatives launched in response to the financial crisis, following the European Council meeting on 15 and 16October 2008.
An exchange of views took place in advance of the summit of the main countries and institutions concerned by the crisis, to be held in Washington on 15November to discuss reform of the international financial system.
The reform envisaged would ensure that the errors which led to the current crisis are not repeated, in particular through better regulation, more effective supervision of market operators and a strengthening of institutions such as the International Monetary Fund. The global economic situation and its impact on emerging economies and developing countries are also on the agenda.
The conclusions of the European Council on 15 and 16October state: "The European Union must work with its international partners on a genuine, all-encompassing reform of the international financial system based on the principles of transparency, sound banking, responsibility, integrity and world governance. The aim is to take early decisions on transparency, global standards of regulation, cross-border supervision and crisis management, to avoid conflicts of interest and to create an early warning system, so as to engender confidence among savers and investors in every country. The Union will quickly take appropriate initiatives in consultation with its main partners and the relevant international financial institutions. These initiatives will be carefully prepared within theEU."
The Council's discussion prepared the ground for an informal meeting of EU Heads of State and Government in Brussels on 7November, with a view to the summit on 15November. On that occasion, the Presidency will present a discussion paper, taking account of the comments made by delegations.
The Council also took note of a Commission action plan to support economic activity in the context of the downturn in Europe (14938/08). The discussions on this question will continue at the Council meeting on 2 December 2008.
REDUCED V.A.T. RATES
The Council examined a proposal for a Directive amending the rules on reduced rates of VAT (value added tax), pending an in-depth review of the rules.
It requested the Permanent Representatives Committee (Coreper) to continue to examine the outstanding issues, to enable the Council to take a decision by the end of the year.
The proposal is intended to allow Member States to apply reduced rates – indefinitely – to certain locallyprovided services, including catering services, for which there is no risk of unfair competition in the internal market.
The present VAT rules (Directive 2006/112/EC) require Member States to apply a normal rate of VAT to most goods and services (a normal minimum rate of 15 % is applicable until the endof2010). Member States may apply a reduced rate (minimum 5 %) to certain goods and services, and derogations are provided for in certain cases and/or for certain Member States.
These derogations include:
– provisional derogations for Member States which, before 1992 (when the general VAT rates system was introduced), applied rates lower than the present reduced rates;
– reduced rates applied on a temporary basis (until the end of 2010) to certain locallyprovided services;
– other derogations of a limited duration, provided for in the Acts of Accession of those Member States which acceded to the EU in 2004 (applicable until the end of 2010).
In 2006, the Commission was requested to commission an independent body to assess the likely impact – on job creation, economic growth and the proper functioning of the internal market – of reduced rates applied to locally-provided services[1].
On the basis of that study, the Commission considered that a new framework would be needed to rationalise and simplify the rules currently in force, while leaving a degree of latitude to the Member States in the use of reduced rates.
Last December, the Council agreed that in 2008 it would conduct a policy debate on the impact and usefulness of reduced rates. The Commission submitted an initial proposal in July 2008.
The proposal focuses on the provisions which expire at the end of 2010. It is intended, in particular, to:
– guarantee equality of treatment between Member States with regard to the options offered for applying reduced VAT rates;
– allow all Member States to apply reduced rates – indefinitely – to certain locallyprovided services, including catering services, for which there is no risk of unfair competition in the internal market;
– make technical improvements to the provisions in force and remove certain inconsistencies.
Following the discussions at an informal meeting of ministers in Nice in September and at the Council on 7 October, as well as within Coreper, the Presidency presented a draft compromise which serves as a basis for the technical discussions.
FIGHT AGAINST V.A.T. FRAUD
The Council reached agreement in principle on a general approach on proposals for a Directive and Regulation[2] to strengthen the fight against VAT (value added tax) fraud.
The Directive and Regulation will be adopted at a forthcoming Council meeting, once the European Parliament has delivered its opinion.
The proposals are intended to ensure that information on cross-border transactions is collected and exchanged between Member States more quickly, to enable more rapid detection of cases of fraud, and in particular of "VAT carousels".
The fight against VAT fraud represents a major challenge both for the EU and for national budgets. Every year, this type of fraud costs Member Statesbillions of euros. It most often takes the form of fraud circuits known as "VAT carousels", which target crossborder transactions .
In November2006, the Council agreed to establish a strategy to supplement at EU level the efforts being made nationally to combat fraud. In June2007, it requested the Commission to propose legislative measures to strengthen the VAT system and decided to give those measures a high priority.
The proposals, which constitute an initial response to that request, provide for a reduction in the statutory time limits imposed on operators for the declaration of transactions for VAT purposes, together with a reduction in the time limits for transmission of such information between MemberStates, while avoiding any increase in the administrative burden on undertakings, especially SMEs.
GENERAL ARRANGEMENTS FOR EXCISE DUTIES
The Council agreed on a general approach, pending the opinion of the European Parliament and the lifting of a parliamentary reservation by one delegation, on a draft Directive adapting the current excise duty arrangements[3] in the EU and permitting the introduction of a computerised excise duty monitoring system.
The computerised excise duty monitoring system will provide a simpler, paperless environment for business, and will facilitate more integrated and faster monitoring. The draft Directive is intended to simplify and modernise excise duty procedures, without compromising the quality of monitoring, and to adapt the provisions on the movement of products to the new system, which was provided for in a Decision adopted in 2003[4].
The 2003 Decision stipulates that Member States and the Commission must establish the computerised system in the first half of 2009; the Directive must therefore be adopted by the end of2008, to enable the computerised system to be applied from 1 April 2010.
ANTI-FRAUD AGREEMENT WITH LIECHTENSTEIN
The Commission informed the Council of the progress of negotiations with Liechtenstein on an agreement to combat fraud.
The draft agreement, negotiated by the Commission on the basis of a mandate drawn up by the Council in 2006, covers fraud relating to both indirect and direct taxation. It is important for the EU that the agreement should apply to direct taxation given the absence of a convention with Liechtenstein on the exchange of information on taxation of savings.
While remaining within the framework of the acquis communautaire, the EU would like to obtain genuine administrative assistance from Liechtenstein, including as regards funds.
The Council therefore invited the Commission to resume its negotiations with Liechtenstein in order to obtain improvements and additional guarantees to ensure real administrative assistance and access to information, in particular with regard to funds, and to report back at a forthcoming meeting.
CLIMATE CHANGE – EMISSIONS TRADING SCHEME
The Council took note of a statement by the Polish Minister concerning the trading scheme for CO2 emissions proposed for the period2012 to 2020, in particular his wish to prevent excessive volatility in the allowance prices provided under the new scheme.
While recognising that the Environment Council is responsible for this dossier, the Council asked the Economic and Financial Committee to examine the issue and report to the next meetings of the Economic and Financial Affairs Council and the Environment Council.
LISBON STRATEGY FOR GROWTH AND JOBS
The Council noted progress on the Lisbon Strategy for Growth and Jobs.
MEETINGS IN THE MARGINS OF THE COUNCIL
Meeting with the European Parliament
On 3 November the Presidency troika met representatives of the European Parliament's Committee on Economic and Monetary Affairs. The meeting focused on the financial crisis and the EU's economic and monetary union, ten years after its launch in 1998.
Macroeconomic dialogue with the social partners
On 3 November the Presidency troika held its twice-yearly macroeconomic dialogue with the social partners (representatives of European trade unions and business federations), in the presence of the Commission, the President of the Eurogroup and the President of the European Central Bank. The meeting focused on the economic situation and the most appropriate policies in response to it.
Eurogroup
Ministers of the euro area Member States attended a meeting of the Eurogroup on 3November.