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ECOFIN (4 December 2007)

Volume 468: debated on Monday 3 December 2007

The Economic and Financial Affairs Council will be held on 4 December in Brussels. The agenda will be as follows:

Implementation of the Stability and Growth Pact

The Council will discuss whether Poland has met the 27 August 2007 deadline to correct its excessive deficit procedure, following discussion of the issue at the Economic and Financial Committee. The UK supports a prudent interpretation of the Stability and Growth Pact, which takes into account the economic cycle, sustainability and the important role of public investment

Lisbon Multilateral Surveillance

Ministers will be asked to agree draft conclusions on the multilateral surveillance element of the Lisbon national reform programmes. These conclusions have been prepared at the Economic Policy Committee and the Economic and Financial Committee. The UK welcomes multilateral surveillance under the Lisbon strategy, which encourages member states to focus on the implementation of the Lisbon strategy.

Globalisation: Capital and Labour Flows

Ministers will be asked to agree conclusions on the economic dimension of migration. This follows from an exchange of views at November ECOFIN on the basis of a report on the economic impact of migration prepared by the European Commission. At the November meeting, Ministers agreed that it was important that the economic dimension should be considered in broader discussions of migration.

Financial Services: a) Directive on the Solvency of Insurance Companies (Solvency II)

Ministers will be invited to discuss the proposed Solvency II directive on the prudential requirements for insurance and reinsurance companies. The debate will focus on a paper prepared by the Portuguese presidency, which endorses a need for further work on certain key areas of group supervision.

b) Lamfalussy Review

Ministers will be asked to agree Council conclusions on the review of the Lamfalussy arrangements. The UK believes the Lamfalussy arrangements have made a major contribution to improving the efficiency of the EU legislative process and enhancing supervisory co-operation. The UK believes the draft council conclusions represent an appropriate consensus about how the Lamfalussy arrangements should evolve going forward.

c) Risk Capital

Ministers will be asked to agree Council conclusions on cross-border risk capital, which have been prepared by the Financial Services Committee. The UK supports work to break down the key remaining barriers to development of a European venture capital market.


a) VAT Package

Following on from its discussion at its November meeting, the Council will be asked to agree a set of measures that will modernise the EU VAT rules for the cross-border supply of services, with particular focus on proposed changes to the rules for the telecoms, broadcasting and e-services sectors. The UK strongly supports these proposals.

b) Reduced VAT Rates

i) Commission communication on VAT rates other than the standard rate.

Ministers will be asked to agree Council conclusions that will provide political guidance for the Commission to enable it to prepare a new legislative proposal on VAT rates.

ii) Proposal for a Council directive amending Directive 2006/112/EEC with regard to certain temporary provisions concerning rates of VAT.

Ministers will then discuss the Commission proposal to extend until 2010 some of the new member states’ derogations for reduced VAT rates. The UK believes that member states should be given flexibility to apply reduced VAT rates where these will not materially affect the single market, and therefore supports the extension of most of the temporary derogations granted to those member states that acceded to the European Union after 1 January 1995.

c) Capital Duty Directive

Ministers will then be asked to discuss a Commission proposal for a directive concerning indirect taxes on the raising of capital. The UK abolished capital duty in 1988.

d) Combating Tax Fraud

Ministers will be asked to agree conclusions on work to improve arrangements to combat tax fraud, which have been prepared on the basis of a report by the Commission. The UK is strongly supportive of work that will help in the fight against Missing Trader Intra-Community (MTIC) and other VAT fraud, while remaining committed to minimising the burdens on legitimate businesses.

e) Code of Conduct Group (Business Taxation)

Ministers will be asked to agree the forward workplan for the code of conduct group, a Ministerial group which looks to coordinate and share best practice on tax-related issues that are not directly covered by EU legislation. The UK supports the proposed work programme.