HC Deb 15 December 1986 vol 107 cc421-2W
Mr. Forth

asked the Chancellor of the Exchequer if he will make a statement on the latest meeting of the European Communities, Economic and Finance Council.

Mr. Lawson

The Community's Economic and Finance Council met in Brussels on Monday 8 December, under my chairmanship. My hon. Friend, the Economic Secretary represented the United Kingdom.

The Council adopt a directive on the annual and consolidated accounts of banks and other financial institutions. The directive provides for a standardised accounting regime for banks and other financial institutions throughout the Community, and is an important element in the achievement of the interiml market for financial services.

The Council had a further discussion of the Commission's annual economic report for 1986–87. The report, as amended to take account of member slates' comments, was agreed by the Council.

The Council discussed the Greek economy, and the progress made in its economic stabilisation programme since the Council agreed in November 1985 to a Community loan of 1.75 billion ecu (about £1.3 billion). The Council agreed that the Commission should release the second half of the loan. In reaching its view, the council took into account the provisional agreement reached between the Commission and Greece that:

  1. (a) the import deposit scheme will be abolished by the end of April 1987;
  2. (b) phasing out of the export subsidy scheme will start in January 1987, and be completed over the following three years. The Commission decision authorising the continuation of the scheme will contain a safeguard clause designed to cover any particular problems created by the scheme for other member states.

The Council reached agreement (subject to a United Kingdom parliamentary scrutiny reserve) on a two-year extension, from 31 December 1986 to 31 December 1988, of the Community's medium-term financial assistance facility, and on a reduction of 2 billion ecu (about £1.5 billion) in the total of credits under the facility. The reduction in the total of credits matches a 2 billion ecu increase agreed in 1985 in the lending ceiling for the Community loan mechanism.

The Council had a useful discussion on travellers' allowances, in particular duty and tax-free shopping, against the background of its acceptance of the continuing existence of duty and tax-free facilities as long as fiscal frontiers remain. The Commission made clear its intention to take initiatives to meet the different concerns of a number of member states in this area. Good progress was made on finding solutions to those concerns. In respect of the Channel fixed link, the Commission gave an assurance that the link would enjoy the same fiscal treatment as other cross-channel operators.

The Council also discussed duty-free admission of fuel contained in the tanks of goods transport vehicles, and the fiscal treatment of rum imported from the Frnech overseas departments.