EC Economic and Finance Council (Hansard, 20 November 1987)

§ Mr. Lawson

The ECOFIN Council met in Brussels on 16 November. I represented the United Kingdom. Recent developments in the financial and foreign exchange markets were discussed. The council considered it of high importance that the fiscal and monetary co-operation agreed at the Louvre should be continued. European countries were determined to improve the conditions for further internally generated non-inflationary growth, and they intend to co-operate actively with other countries to ensure a more stable development of world financial and foreign exchange markets. Early and appropriate decisions on a further substantial reduction of the United States budget deficit were considered to be especially urgent.

The Council agreed that the monetary committee and committee of central bank governors should be asked to study and report as soon as possible on the Commission's proposals on liberalisation of capital movements and related matters.

The Council confirmed that the economic policy committee should carry out rapidly an economic analysis of the Commission's proposals for the abolition of fiscal frontiers prior to further consideration of the proposals by the Council. I made it clear that the United Kingdom would not permit to come into force any proposals that in any way conflicted with pledges Her Majesty's Government has given concerning the United Kingdom's zero rates of VAT.

The Commission undertook to produce a new proposal for a common system of VAT for works of art, antiques and other used goods. It was agreed that further preparation should be undertaken for a future Council discussion of the draft 18th VAT directive abolishing certain derogations contained in the sixth VAT directive.

The Council agreed that a directive on investment by unit trusts in mortgage-type bonds should be submitted to the European Parliament after the United Kingdom parliamentary scrutiny reserve is raised.