European Community (Hansard, 16 April 1991)

§ Mr. Norman Lamont

The ECOFIN Council met in Brussels on 8 April. The intergovernmental conference on economic and monetary union met that morning when there was also an interinstitutional meeting of Ministers with the European Parliament. The Minister for Corporate Affairs and I represented the United Kingdom at ECOFIN and I attended the IGC and the meeting with the European Parliament.

A Commission initiative concerning the debt owed to the Community by the African, Caribbean and Pacific countries linked by the Lomé convention was discussed, but it was agreed that the proposal was inconsistent with the international debt strategy. A modified proposal may be discussed by a future Council.

The Council reached agreement in principle to provide guaranteed loans to Romania equal to the amount offered by the non-EC members of the G24 up to a maximum of 375 million ecu.

Ministers also discussed agricultural price fixing. I made clear the Government's determination not to increase the agricultural guideline calculated in accordance with the 1988 budget discipline decision; and emphasised the importance which the Government attach to respect for budgetary discipline.

The future taxation of road transport was also discussed, but without agreement. The Commission made 141W a brief presentation of two company tax measures which are currently before the Council and which concern the taxation of cross-border interest payment and royalties and the treatment of tax relief for losses within groups of companies. There was no discussion of these measures.

There was a brief discussion of the proposed takeovers directive but no significant progress towards an agreement. Several member states, including the United Kingdom, expressed major reservations about the Commission's proposals.

On the investment services directive, the Council discussed a compromise text from the Presidency on the issue of regulated markets. The Commission proposed a further compromise for discussion at a future Council.

The ministerial meeting of the intergovernmental conference on EMU focused on the transition from stage 1 to stage 2 of EMU. Differing views emerged on the degree of economic convergence necessary before a move to stage 2. I argued that it was necessary to determine the content of stage 2 before taking any decision on when it should start; and that economic convergence was a key element in making further progress towards economic and monetary integration. The United Kingdom proposals would establish, in stage 2, a mechanism to encourage convergence on the best inflation performance.

I also attended the inter-institutional meeting held with the European Parliament to allow Members of the European Parliament to put their views on the EMU IGC to Finance Ministers. Members of the European Parliament expressed a range of views. The meeting was purely consultative in nature.