§ Sir Teddy TaylorTo ask the Chancellor of the Exchequer on what grounds he voted at the Council of Ministers on 10 July for sanctions to be applied to EC states which were not proceeding effectively towards the convergence criteria; what is the current level of unemployment in the states concerned; and what estimate he has made of the effect on unemployment if the convergence criteria were adhered to by the nations concerned. [35187]
§ Mrs. Angela KnightThe ECOFIN Council on 10 July made confidential recommendations to each of the member states with an excessive deficit. No sanctions have been applied to any member state. Member states which receive support form the cohesion fund and also have an excessive deficit—Greece, Portugal and Spain—may be liable to have their cohesion funding suspended under article 6 of the cohesion fund regulation, but this is a decision for the Commission, not the Council.
The latest OECD standardised estimate of the unemployment rate in Greece in November 1994 is 4.7 per cent., in Portugal in April 1995 is 7.2 per cent., and in Spain in the first quarter of 1995 is 22.8 per cent. The Government believe that the best way to reduce unemployment is by increasing labour market flexibility and creating a stable macro-economic environment. Thus, adhering to the convergence criteria would be consistent with efforts to reduce unemployment in these countries.
§ Sir Teddy TaylorTo ask the Chancellor of the Exchequer what is the latest estimate of total unemployment within the European Union; and what assessment he has made of the effect on this total of the implementation of the convergence criteria. [35186]
§ Mr. WaldegraveThe OECD's standardised estimate of the unemployment rate within the European Union in April 1995 is 9.6 per cent. The Government believe that the best way to reduce unemployment is by increasing labour market flexibility and creating a stable macroeconomic environment. The convergence criteria1250W are consistent with the creation of a stable macroeconomic environment.