HC Deb 26 February 1998 vol 307 c353W
Ms Lawrence

To ask the Chancellor of the Exchequer if he will make a statement on the Council Meeting of the Economic and Finance Ministers of the European Union held on 16 February. [30543]

Mr. Gordon Brown

I chaired the Economic and Finance Council—ECOFIN—of the European Union in Brussels on 16 February. The Economic Secretary represented the UK.

The Council held an orientation debate on economic policy issues to give guidance on the issues it wishes to see addressed in this year's Broad Economic Guidelines, on which the Commission will present a recommendation later in the year. There was general agreement on the need for further fiscal consolidation and for further structural reform in labour, product and service, and capital markets.

The extraordinary European Council on employment of 20 and 21 November in Luxembourg concluded that, in order to make the taxation system more employment-friendly, Member States will examine, without obligation, the advisability of reducing the rate of VAT on labour-intensive services not exposed to cross-border competition.

The Council considered the Commission's Communication following up this mandate, and agreed to put the issue to a technical group.

I took this opportunity to explain briefly to colleagues my intention to attend the EMI Council on 3 March, and to remind Ministers of the importance of ensuring compatibility of national legislation with the Treaty requirements for EMU. I also notified colleagues of my intention to organise a meeting with the Social Partners on the wider implications of the single currency around the 19 May ECOFIN.

It was agreed that the Commission should examine the possibility of arrangements enabling the European Investment Bank to lend to Bosnia and to report back to the Council.

ECOFIN Ministers also met Michel Camdessus, Managing Director of the International Monetary Fund, over lunch, and had a useful discussion of the world economic outlook with special reference to the financial situation in Asia and the response of the international community.