Letter from the Private Secretary to the
Chancellor of the Exchequer to the Clerk of the Committee
ECOFIN: 5 JUNE 2001
I am writing to keep you informed of the outcome
of the Economic and Finance Council of Ministers meeting in Luxembourg
on 5 June which the Chancellor of the Exchequer attended.
The Broad Economic Policy Guidelines (BEPGs) for
2001 were agreed and will now be submitted to the Gothenburg European
Council on 15-16 June for discussion by Heads of State and Government
following which they will be adopted by ECOFIN. The Commission
has taken on board UK comments and the UK specific guideline that
the expected ratio of UK public sector current expenditure to
GDP should not exceed 37.3 per cent has been removed.
The Presidency and Commission reported their discussions
with third countries on taxation of savings. The Council agreed
that at its meeting in October, it should agree on a mandate for
negotiations with third countries. The Chancellor reported on
discussions with UK dependent territories.
The Council agreed that a High Level Working Party
of representatives of Member States, nominated by Finance Ministers,
will be established in order to assure the co-ordination of work
and to achieve parallel progress on the tax package. A
report on the tax package will be presented to the Gothenburg
European Council. ECOFIN noted a report on the work of the Code
of Conduct group during the Swedish Presidency, and agreed that
its work should continue.
The Presidency introduced its report on progress
on the proposal for a Directive on the taxation of energy products.
The Chancellor made clear that progress on this dossier would
depend on full liberalisation of Europe's energy market.
Ministers noted the Presidency's report on VAT and
E-commerce and remitted the issue to a later meeting.
The Council noted the Commission's fourth six-monthly
progress report on the Financial Services Action Plan.
ECOFIN discussed the strategy for sustainable development,
which will be adopted at the Gothenburg European Council. The
strategy consists of three pillars: economic, environmental and
Macro financial assistance of 300 million euros to
the Former Republic of Yugoslavia was agreed in principle.
The Council gave a broad welcome to the Commission's
proposals for the recasting of the Financial Regulation and an
indication of areas where further work was required. It urged
the Commission to bring forward a revised proposal as a matter
of priority so that detailed consideration by the Council could
The Commission presented its Annual Report on the
Community's fight against fraud and the accompanying Action Plan
for 2001-2003. There was broad political consensus on the Conclusions
which would now be adopted at the Gothenburg ECOFIN on 15 June.
Two Directives updating the EC's legal framework
for collective investment vehicles such as unit trusts were adopted
15 June 2001