HC Deb 09 July 1986 vol 101 c195W
Mr. Robert B. Jones

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

Mr. Lawson

The Economic and Finance Council met in Brussels on 7 July. 1 chaired the meeting, which was the first of the United Kingdom Presidency of the Community. My hon. Friend the Minister of State, Treasury, represented the United Kingdom.

The Council discussed the economic situation in the Community, and agreed that the policy guidelines set out in the 1985–86 annual economic report need not be changed. The Council also took note of the Commission's budgetary guidelines for individual member states for the forthcoming year.

The main business of the Council concerned the 1986 Community budget and the reference framework, in the light of the Commission's rectifying letter and the judgment of the European Court of Justice, which upheld the Council's contention that the European Parliament had acted illegally. The Council agreed, by a qualified majority, on conclusions relating to the budgetary situation in the current year. The main points of these conclusions were:

  1. (a) following the European Court's judgment, a new 1986 budget should be established as quickly as possible;
  2. (b) in the circumstances, the reference framework spending limits for 1986 could be raised;
  3. (c) the Budget Council should determine the precise figures. In doing so, the Budget Council should limit the increase for agricultural spending in 1986 to amounts which can be justified mainly by the exceptional circumstance of the abnormally large depreciation of the dollar, and should examine the scope for economies in all areas of expenditure.

These conclusions were conveyed to the Budget Council, which met immediately after the Finance Council.