HC Deb 25 February 2002 vol 380 c1036W
Mrs. Lawrence

To ask the Chancellor of the Exchequer what the outcome was of the ECOFIN Council held in Brussels on 12 February. [36862]

Mr. Gordon Brown

I attended ECOFIN on 12 February.

The European Commission presented reports on the functioning of EU product and capital markets and set out its priorities for the 2002 Broad Economic Policy Guidelines.

The Council examined and after debate agreed opinions on the updated stability and convergence programmes for Germany, Greece, Spain, France, Ireland, Italy, Portugal and the United Kingdom, produced in line with the Stability and Growth Pact. The Council also agreed additional statements on Germany and Portugal, in which both countries set out the disciplines they should follow in future years.

The Commission and the ECB summarised latest developments on the transition to the euro.

The presidency noted that all member states had now ratified the Council decision of September 2000 on own resources. This will now take effect from March 2002, with any differences resulting from the late entry into force being corrected with retrospective effect from 1 January.

The Commission presented its proposals for a budgetary framework for enlargement, for use in the accession negotiations. Following a brief discussion, the presidency concluded that the Commission should now draw up draft common positions for the financial aspects of enlargement that were in conformity with the Berlin European Council budgetary settlement. These should not be linked with parallel discussions later in the year on reform of the common agricultural policy. Equally, it was important that enlargement should not impede reform.

ECOFIN reached political agreement on VAT on e-commerce without discussion. The amended directive and regulation make welcome changes to the rules governing the taxation of digitised products, so as to correct certain distortions of competition. During the negotiations the UK successfully secured an explicit commitment, which now features in the directive, to move, by 2006, to a comprehensive electronic solution for the taxation of such items which will treat EU and non-EU businesses on an identical basis.