Examination of witnesses (Questions 1-19)|
WEDNESDAY 2 MAY 2001
MP, MISS MELANIE
JOHNSON MP, MR
1. Welcome. It is always a pleasure to welcome
you to the Treasury Select Committee. I understand that it is
your birthday today, so it is an even greater pleasure. Many happy
(Dawn Primarolo) I could not think of
a better way to spend my birthdayit says here in my notes.
2. Is there anything either of you would like
to say to begin with?
(Dawn Primarolo) No, I do not think there is, Chairman,
except to introduce the people sitting at the table with myself
and the Economic Secretary. Peter Curwen, on my left, is Head
of the European and International Tax team. Next to the Economic
Secretary is Ivan Rogers, who is the Director of Europe, that
is Her Majesty's Treasury. At the far end is Richard Brown, Head
of Agriculture and Environmental Policy, Her Majesty's Treasury.
3. Thank you very much indeed.
(Dawn Primarolo) I do not know who these are behind
us but I thought they were your fan club.
4. Maybe they are yours.
(Dawn Primarolo) I do not have one.
5. This may even be my farewell question: I
would just like to ask you what difference has it made to Ecofin
having the Euroclub, or the Eurogroup as it is called, Euro-X
or Euro-12, whatever it is now called? I think it is called Eurogroup.
Has it made any impact?
(Dawn Primarolo) If I could say, Chairman, on the
question of tax and the discussions around the major tax agenda,
of course Ecofin has continued to be the forum, matters settled
6. So it has made no difference?
(Dawn Primarolo) There is no change in that respect.
I am not actually aware, unless the Economic Secretary wants to
add any points, of necessarily an impact but certainly not on
the tax side, no.
7. Economic Secretary?
(Miss Johnson) There have been suggestions that have
come out for a better informal organisation of the Eurogroup and
hence better visibility, including better communication between
the Eurogroup and the ECB and, indeed, the markets. We welcome
those developments and I think that those are positive as far
as we are concerned. As the Paymaster General has said, the fact
remains that Ecofin is the prime forum in all of this and has
a central role in economic policy co-ordination and that remains
as it has always remained.
8. The fact that the Chair of the Eurogroup
is somebody different from the Chair of Ecofin, has that made
(Miss Johnson) I think it provides another alternative
set of energies going into leadership in Europe and that is only
constructive given the developments that the Eurogroup have been
making along the lines that I have already mentioned. I think
greater visibility and better co-ordination are real positives.
9. When you arrive out there on the continent
of Europe for your meeting at Ecofin, the fact that Eurogroup
may have met in the morning does not make any difference?
(Miss Johnson) No. If you are, as you would be, at
the lunch there is much discussion of what has happened at Eurogroup
as part of the luncheon discussion as well. We are very much included
in that and, in my experience, it makes very little difference.
There certainly is not a feeling of being outside of things, if
that is what you are suggesting.
Chairman: I was possibly.
10. Can I just check that no British official
or Minister attends the Eurogroup meetings, is that correct?
(Miss Johnson) That is correct.
11. Do we receive the minutes of the Eurogroup
(Miss Johnson) No, we do not.
12. So we do not attend either in an official
capacity or a ministerial capacity and we do not receive the minutes.
Anything we find out about what goes on in those meetings comes
from informal briefings over lunch, is that correct?
(Miss Johnson) Yes, but those informal briefings are
fairly full and do include some discussion around anything that
is of interest to the whole group and, indeed, often there is
obviously an overlap between the subjects that are being discussed.
13. Let me just press you on that. Say, for
example, the members of the Eurogroup had read or seen in the
press that the British Minister going to Ecofin was going to take
a particular position and they decided that they did not support
that position and discussed it at that group, presumably they
would not give you formal notice of that at the lunch. That could
happen if we do not have membership of that committee and do not
see the minutes.
(Miss Johnson) All the decisions are actually taken
amongst the 15 and, as I said in my opening response to the Chairman's
question, obviously Ecofin remains the sole decision making body
on EU economic policy and that is as it has always been.
14. You do not think it possible for the Eurogroup
members to stitch Britain up then?
(Miss Johnson) We remain vigilant and we would resist
anything that we felt had that character to it. We are talking
about recent Ecofins, and indeed the Chairman started off by saying
"when you are over on the continent, as it were, actually
at a meeting how does it feel", and I can only tell you how
it feels from personal experience and it feels that we are still
very much taking a leading role, we are influencing things from
the centre, but Ecofin is still very much at the heart of decision
making, as is its proper constitutional place in the framework.
It does not feel as if there is any kind of problem of the kind
that you are trying to allude to.
15. Let us be very clear on this for the record.
There are some decisions taken by Ecofin which are not subject
to unanimity rules and the 12 members of the Eurogroup would have
the voting power amongst those 12 to vote out Britain's opposition
on an issue that did not require unanimity. That is correct, is
(Miss Johnson) The fact is that decisions are taken
in the forum of the 15 unless they are explicitly
16. That is not the question. I have asked you
to confirm the legal position.
(Miss Johnson) You are saying if it is something related
to majority voting then obviously a majority can carry the day.
That is a fact in any context.
17. Thank you for confirming that.
(Miss Johnson) That is just a matter of fact, that
is nothing to do with the Eurogroup.
18. I want to you to confirm that the 12 members
of the Eurogroup would actually form such a majority. Can you
confirm that for the record?
(Miss Johnson) I think you can see that 12 members
are actually a majority of the group.
Mr Davey: Thank you very much, that is
all I wanted to find out.
Sir Teddy Taylor
19. Chairman, while I am sure we will all have
been greatly heartened by the Minister's summary of the situation
of Britain being outside the Eurogroup and not suffering anything,
there is one particular issue on which I would greatly appreciate
her advice. That is on the apparent censure which was given by
Ecofin at the meeting of 12 February in which they said that the
Treasury's budget projections were "not in line" with
the Stability and Growth Pact. The figures show, I think, we are
the only country that is looking forward to a deficit, I think
it is one per cent, in the year 2003-04. While I appreciate, Chairman,
the Government may take the view that Ecofin are being a bit pessimistic
and perhaps even cautious, what I would genuinely like to know
is what is the status of it? The reason I am asking is that in
the actual summary of the decision taken in June 1997 it said
the British Government commit themselves to taking the corrective
budgetary action they deem necessary to meet the objectives of
their stability or convergence programmes. I am wondering what
is the status of this warning? They have said to us "you
are going to be spending too much", can we just ignore it
or is there some kind of standing and does Britain have any legal
obligations to change things?
(Miss Johnson) The Stability and Growth Pact actually
provides non-binding guidance on the orientation of Member States'
economic policies. All I can do is emphasise the fact that those