§ Sir Teddy TaylorTo ask the Chancellor of the Exchequer if he will make a statement on the outcome of the ECOFIN meeting on 14 December; and what arrangements have been made to deal with the need for borrowing by the European investment bank.
§ Mr. BarnesTo ask the Chancellor of the Exchequer if he will make a statement on the outcome of the EC ECOFIN Council of 13 and 14 December indicating the voting record of each member state on each item and where no formal votes were taken.
§ Mr. Kenneth ClarkeThe last ECOFIN under the Belgian presidency was held on 13 December. I represented the United Kingdom.
845WThe Council adopted a recommendation for broad economic policy guidelines under article 103 of the treaty. The final text was closely modelled on the report from ECOFIN to the European Council agreed on 5 December subject to certain changes to ensure consistency with the European Council conclusions on growth, competitiveness and employment. The text was fully acceptable to me and in line with the policy of the British Government.
ECOFIN also conducted the assessment of progress required under article 109e of the treaty with regard to economic and monetary convergence and the implementation of Community law concerning the internal market.
The directive on VAT on second hand goods was agreed. The United Kingdom secured a satisfactory compromise on the treatment of imported works of art. These will be taxed at the equivalent rate of 2.5 per cent. until 30 June 1999. The Council also adopted a number of derogations for member states under the mineral oils structures directive.92/81/EEC.
The Council discussed its remit from the European Council to consider further the financing of trans-European networks. Financing will be on the basis of private sector finance supplemented by funds from within the expenditure ceilings agreed at Edinburgh and loans and guarantees from the European investment bank—EIB—and the European investment fund. It was agreed that there would be further discussions between the presidency, EIB and the Commission in advance of discussion in the Council during the Greek presidency on whether there was a need for any additional sources of finance.
There was some discussion of the Commission's proposal for interest rate subsidies on EIB lending to small and medium-sized enterprises under the Edinburgh lending facility. The presidency stressed the importance of reaching agreement on the text by the end of the year in line with the conclusions of the European Council.
There was also discussion of the Commission's proposals for the harmonised treatment of withholding tax on savings. I reiterated the United Kingdom's objections to the proposal but agreed that work should continue within the Commission and at official level.
The presidency heard a statement from the Commission on its proposal for a directive on the taxation of interest and royalties which, in broad terms, would remove source country taxation of cross-border interest and royalty payments between companies. The Commission hopes that work will continue at official level with a view to a further discussion in the Council in the new year.
The Council agreed in principle a Commission proposal for balance of payments support for Moldova. The Council emphasised that its actions did not constitute a precedent and would be funded within the existing budgetary ceilings for assistance.
There was little substantive discussion on the Commission's proposal for a carbon/energy tax and the matter was referred back for further consideration at official level. I made it clear that there is no need for further environmental taxes in the United Kingdom to meet our commitments under the Rio convention, and that we were opposed to an EC-wide carbon/energy tax.
ECOFIN Ministers and their EFTA counterparts met to discuss the economic situation against the background of the broad economic policy guidelines and the European Council discussion on growth, competitiveness and employment. There was general agreement on the importance of economic co-operation in Europe.
The Council took no formal votes.