§ Mr. Norman Lamont
The ECOFIN Council met in Brussels on 28 January. The inter-governmental conference on economic and monetary union met later the same day. I represented the United Kingdom at both meetings.
The meeting began with a discussion of the economic situation in member states as part of the multilateral surveillance under stage 1 of economic and monetary union. It was generally agreed that strict monetary policy was essential, and that structural improvements were needed, particularly in the employment market and that saving and investment needed to be increased and budget deficits reduced.
The presidency introduced its work programme on VAT and excise questions which was endorsed by the Council. I also made a statement emphasising the importance of the recent report on export refunds by the European Court of Auditors, which highlighted the need for improvements in the management of this significant area of the Community budget, in part to reduce the risk of fraud. It was agreed that progress in meeting the court's recommendations should be carefully monitored.
On the basis of a report that the Commission had received pledges of $500 million from non EC members of the G24 and others for a loan to Czechoslovakia, the Council agreed that the Community would contribute a further $500 million and that the necessary legal texts should be adopted as soon as possible. The Council also agreed that the Community would pledge a 50 per cent. contribution, up to $250 million, to a loan by the G24 to Hungary.
Over lunch, I also raised the question of burden-sharing by other countries for the costs of the war in the Gulf, and emphasised the substantial contribution being made to the allied operations by the United Kingdom.677W
A balance of payments loan to Greece of the order of 2.2 billion ecu (about £1½ billion) was agreed in principle. The first tranche will consist of the order of 1 billion ecu, but the release of further tranches will be decided by the Commission in consultation with the Council in the light of the Greek Government's performance in implementing its programme of economic reform. The formal decision will set out the precise conditions for the granting of this loan and will be taken at the next meeting of the Council on 25 February.
The meeting of the intergovernmental conference focused on procedure, endorsing a proposal by the Presidency that the IGC should concentrate on drafting treaty texts and agreeing, in broad terms the work programme of the next meetings of the IGC. France and Spain introduced proposals on economic and monetary union. The next meeting of the IGC at ministerial level will be on 25 February.