HC Deb 22 March 1991 vol 188 cc264-5W
Mr. David Martin

To ask the Chancellor of the Exchequer if he will make a statement on the outcome of the latest meeting of the European Community's Economic and Finance Council and the meeting of the intergovernmental conference on economic and monetary union.

Mr. Maude

The ECOFIN Council met in Brussels on 18 March. The intergovernmental conference on economic and monetary union met later the same day. The Minister of State and I represented the United Kingdom at ECOFIN and I attended the IGC.

Progress was made towards a final agreement on special schemes for charging VAT in the country of destination on the following intra-EC transactions—private purchases of new vehicles; goods bought by mail order and other distance selling; and purchases by exempt or non taxable bodies.

The scope of reduced and zero VAT rates was also discussed. The Minister of State reiterated the importance for the United Kingdom of retaining our ability to continue to apply our present zero rates. The Council agreed to express a view on the approximation of VAT rates by 30 June.

Agreement was reached on an EC-wide increase in travellers' allowances for goods not subject to excise duty from 390 to 600 ecus (approximately £273 to £420) from 1 July 1991. Discussions continue on increases for excisable goods such as alcohol and tobacco.

It was agreed that the Commission's draft annual economic report was not out of date and that a revised version should be submitted to the Council for discussion and adoption in July.

The Council agreed in principle that a loan guaranteed by the Community budget could be offered to Bulgaria subject to certain conditions. The loan will be of an amount equal to the facilities offered by non-EC members of the G24 up to a maximum of $400 million dollars. The Commission was also invited to prepare a proposal for a similar facility for Romania.

The Council also adopted an opinion on the discharge of the 1989 EC budget following a presentation by the president of the European Court of Auditors. I stressed the importance of the court's work to improve the efficiency and effectiveness of the Community's expenditure and drew attention to the United Kingdom's ideas for increasing financial management and accountability in the Community which we have put forward in the intergovernmental conference on political union.

The ministerial meeting of the intergovernmental conference on EMU focused on monetary and institutional arrangements in any possible stage 3 of EMU, in particular the allocation of responsibility for external monetary policy and the organisational structure of any European system of central banks (ESCB). The United Kingdom, while taking an active part in these discussions, maintains its general reserve on the subject of stage 3, and in particular on any move to a single currency and single monetary policy.

There was broad agreement that, if there were a single currency and monetary policy, ECOFIN should be responsible for determining the exchange rate system, and that the proposed ESCB should be responsible for day-to-day intervention. Differences persisted between member states in the exact delineation of responsibilities. On the organisational structure of the ESCB, I argued that national central banks should be given the greatest possible degree of autonomy.