European Parliament legislative resolution on the recommendation of the European Central Bank
for a Council regulation concerning an amendment to Council Regulation (EC) No 2531/98 of23 November 1998 concerning the application of minimum reserves by the European Central
Bank (ECB/2001/2  C5-0141/2001  2001/0805(CNS))
(Consultation procedure)
The European Parliament,
 having regard to the recommendation of the European Central Bank to the Council (ECB/2001/2) (
1),
 having been consulted by the Council pursuant to Article 107(6) of the EC Treaty (C5-0141/2001),
 having regard to Rule 67 of its Rules of Procedure, having regard to the report of the Committee on Economic and Monetary Affairs (A5-0246/2001),
1. Approves the recommendation of the European Central Bank;
2. Calls on the Council to notify Parliament should it intend to depart from the text approved by
Parliament;
3. Asks to be consulted again should the Council intend to amend the recommendation of the Euro-
pean Central Bank substantially;
4. Instructs its President to forward its position to the Council, the Commission and the European
Central Bank.
(1) OJ C 89, 20.3.2001, p. 4.
5. Interest rate subsidies
A5-0215/2001
European Parliament resolution on Special Report No 6/2000 of the European Court of Auditors
concerning the granting by the Community of interest subsidies on loans by the European Invest-ment Bank to small and medium-sized enterprises within the framework of its temporary lendingfacility, accompanied by the Commissions replies and Special Report No 3/1999 on the manage-ment and control of interest-rate subsidies by the Commission accompanied by the Commissions
replies (C5-0023/2001  C5-0158/2001  2001/2015(COS))
The European Parliament,
 having regard to Special Report No 3/1999 of the European Court of Auditors (C5-0158/2001) (
1),
 having regard to Special Report No 6/2000 of the European Court of Auditors (C5-0023/2001) (2),
 having regard to Rule 47(1) of its Rules of Procedure,
 having regard to the report of the Committee on Budgetary Control (A5-0215/2001),
A. whereas in June 1993 the European Council launched the so-called Copenhagen facility by asking the
European Investment Bank (EIB), in conjunction with the Commission, to earmark ECU 1 billion inloans to increase the competitiveness of European small and medium-sized enterprises; whereas inter-est subsidies were fixed at 200 base points, or 2 %, were extended to beneficiaries for a period of fiveyears and were restricted to investment projects involving the creation of jobs,
(1) OJ C 217, 29.7.1999.
(2) OJ C 152, 31.05.2000.C 65 E/108 EN 14.3.2002 Official Journal of the European Communities
Wednesday 4 July 2001
B. whereas on 19 April 1994 a cooperation agreement was drawn up between the Commission and the
EIB which sets out a number of provisions including those regarding the definition of the subsidisedSME loans, agents and intermediaries, conditions for granting interest subsidies, cost and expensesincurred, as well as records and reporting; notes that provisions should have been clearer, especiallythose regarding management and control issues,
C. whereas the Facility only became fully operational in Autumn 1994, by which time interest rates had
started to fall in most Member States,
D. whereas the structure to continue to administer the Facility will need to be in place until the middle of
2002,
E. whereas loans could not be combined with other loans at reduced rates offered by the EIB under other
agreements or with ECSC loans; notes that the Court of Auditors pointed out that an exception wasagreed between the EIB and the Commission for ERDF aid at an inappropriate level and therefore hadno legal value; questions why this derogation was not applied to all Member States,
F. whereas in paragraph 57 of its discharge resolution of 10 April 1997 (
1) for the 1995 financial year,
Parliament asked the Court of Auditors and the Commission to report at the earliest opportunity onthe management and effectiveness of the Copenhagen facility,
G. whereas the Court of Auditors submitted two special reports, namely on the management and control
of interest-rate subsidies by the Commission (No 3/99) and on the granting of interest subsidies onloans by the EIB (No 6/2000), regrets the quality of answers submitted by the Commission,
H. whereas in drawing up its special report 6/2000 the Court of Auditors visited all Member States,
carried out checks of beneficiary SMEs and financial intermediaries in six Member States and noted anumber of weaknesses including the following:
(i) impact on investment and job creation: the overall effectiveness of the scheme is questionable, as
it was impossible to demonstrate, at microeconomic level, a causal link between job creation andinterest subsidies;
(ii) management and control systems: the appraisal system, based on delegation to intermediaries,
was weak, as subsidies were paid on the basis of sworn declarations made by the recipientsthemselves; no penalties were envisaged for intermediaries who sent inaccurate declarations and
neither the EIB nor the Commission carried out adequate compensating checks;
(iii) equality of access: the Court found that the scheme did not give equality of access to customers
across the Union, as banks without global loans contracts with the EIB were excluded from thescheme, whilst some agents or intermediaries did not publish the facility widely, preferring tochoose the applicants themselves;
(iv) interest-rate subsidies in general: points out that, in its Special Report 3/1999, the Court of Audi-
tors judged that there is a risk that intermediaries remuneration would exceed those stipulatedand that the aid intended for beneficiaries would thereby be reduced proportionately;
I. whereas, according to article 3 of the Council decision 94/217/EC (
2) of 19 April 1994 on the Copen-
hagen facility, the Commission should present to Parliament and Council a yearly report evaluatingthe implementation of the decision,
J. whereas, in its fifth report on the implementation of the Copenhagen facility (COM(2000) 376), the
Commission concludes, under lessons to be learned, that in hindsight the self-certification of jobcreation would appear to have its drawbacks and may in some cases have resulted in the over-declar-ation of jobs,
(1) OJ L 162, 19.6.1997, p. 29.
(2) OJ L 107, 28.4.1994, p. 57.14.3.2002 EN C 65 E/109 Official Journal of the European Communities
Wednesday 4 July 2001
K. whereas, while the Court cast doubt on the effectiveness of the programme to create jobs, the Com-
mission stated that the subsidy represented extremely good value for money, declaring that 53 789new jobs were created; questions the assumptions by which the Commission arrived at this figure,
L. whereas on 15 February 2001 the Commission presented an evaluation (COM(2001) 86) of the effec-
tiveness of interest-rate subsidies in the light of the Courts special report No 3/1999 on the matter,
M. whereas the Commission identifies the strengths of interest-rate subsidies, such as low budgetary costs,
leverage effect, additionality and the fact that they are a symbol of Community support, as well astheir weaknesses, including the risk of inefficient allocation of resources, cumbersome administration,the risk of discrimination, low visibility and the fact that control and transparency are not alwaysensured,
N. whereas the European Investment Fund (EIF) established in 1994, following the Edinburgh summit of
December 1992, aims to promote medium and long term investment in SMEs by guaranteeing loanfinance or by acquiring, holding or managing equity in venture capital funds and Trans-EuropeanNetworks by providing loan guarantees,
European Investment Bank
1. Regrets that, although the Commission bears the overall budgetary and political responsibility for
interest-rate subsidies:
(a) Management controls: the EIB allowed an unsupervised system to operate whereby payments were
calculated and made by national agents on the basis of sworn statements by applicants on an actual
and uninterrupted increase in the number of jobs; notes that on-the-spot checks by the Court ofAuditors revealed that for 20 % of all cases audited (
1), the number of jobs that were truly eligible
was lower than the number being subsidised; notes that, as the Commission and EIB interpret therules differently, they disagree with the Court on the error rate given;
(b) Competition: the EIB, under time-constraints imposed by the Council, worked with its existing cus-
tomers as financial intermediaries in preference to other banks, thereby distorting competition; notesthat banks used the facility to promote their own interests, for example to retain existing or attractnew clients;
(c) United Kingdom: of the 28 recipients audited in the United Kingdom, the Court found six cases,
amounting to € 149 000, where the eligibility period extended beyond 30 June 1997, and found tencases where recipients had received too much subsidy because they had included VAT paid on thepurchase of capital goods in their calculations; notes that this type of error was not found in any othercountry;
(d) Spain: although article 4 of the cooperation agreement stipulates that an SME subsidised loan cannot
be combined with other subsidised loans, a derogation was agreed and only applied to one MemberState; recalls that intermediaries in other Member States do not seem to have known about the exist-
ence of this derogation;
2. Calls on the EIB to present, at least on an annual basis, to the Parliament and Commission:
(a) Democratic accountability: the annual report of the Audit Committee to the Board of Governors;
welcomes that the EIB has begun to publish details of its evaluations on its Internet site; encourages
the EIB to continue and extend the publication of its executive summaries of audits and evaluations on
its web-site;
(1) In 23 of the 114 cases audited, the Court found that the number of jobs truly eligible was lower than the number
subsidised.C 65 E/110 EN 14.3.2002 Official Journal of the European Communities
Wednesday 4 July 2001
(b) European Investment Fund: encourages the EIB to take further steps to allow full access by the Court
of Auditors to the EIF in the near future; calls for an agreement to be reached before the end of June2001;
(c) Instructions: clear and consistent rules for applications and eligibility criteria, which will reduce ambi-
guities, thereby ensuring that individuals and companies in Member States are treated in the samemanner;
Commission
3. Regrets that, citing the principle of avoiding duplication of work, the Commission abdicates much of
the ex-ante and ex-post controls to the EIB, which acts on the Unions behalf; notes that, as regards itsmanagement of interest-rate subsidies in general, the Commission:
(a) Ex-ante controls: rubber-stamps proposals for projects submitted by the EIB and does not check the
eligibility of projects;
(b) Monitoring: hardly carries out any controls and relies excessively on its agent, the EIB; recalls that
delegating management is not tantamount to delegating responsibility;
(c) Ex-post evaluation: does not analyse progress reports of investments under way, relies on a high
utilisation rate as proof of effectiveness and restricts itself to drawing up a list of projects implementedand sums spent, rather than carrying out impact analysis of subsidies;
4. Notes that as regards the management of the Copenhagen facility, the Commission did not carry out
adequate compensatory checks of the EIBs management and control system;
5. Calls on the Commission to report to the discharge authority by 15 October 2001:
(a) Cooperation with EIB: on ways to increase cost-effective controls on loans managed on its behalf by
the EIB;
(b) Ex-ante monitoring and ex-post controls: on steps to improve monitoring during each stage of the
project and programme cycle;
(c) Alternatives: on cost-effective alternative mechanisms, in the light of the conclusion of the Commis-
sions report (COM(2001) 86) on the general usefulness of interest-rate subsidies, which states that thequestion of abandoning interest-rate subsidies should be addressed; recalls that budgetary resourcesapproaching € 3 billion have been devoted, in favour of other instruments, as regards the followingCommunity programmes involving interest-rate subsidies:
Measures designed
to combat marketfailure:ECSC conversion (Article 56)
TENs
Edinburgh facility for SMEsDevelopment cooperation for ACP countries
Economic development for MEDA and Slovenia
ERDF
Measures designed to deal
with external shocksNatural disasters (Italy, Greece, Kalamata and Madeira)
European Monetary SystemPeace and reconciliation in Ireland
Reduction in disparities (EEA)
Reconstruction in the Balkans (FYROM and Bosnia)
Council
6. Asks the Council to refrain from imposing ill-conceived and unworkable programmes on the EIB and
Commission;14.3.2002 EN C 65 E/111 Official Journal of the European Communities
Wednesday 4 July 2001
7. Notes that, in the conclusions of the Presidency to the Stockholm summit of 23/24 March 2001, the
Council agreed that the EIB should open up lending to Russia for selected environmental projects in Kalin-ingrad and Saint Petersburg; notes that, in addition to the EIB, the so-called Northern Dimension Environ-mental Partnership scheme will comprise the Commission, the European Bank for Reconstruction andDevelopment, the Nordic Investment Bank, the World Bank and Baltic States including Russia; expressesreservations as to the feasibility, sustainability and practicalities of this scheme; calls on all parties to ensurethat rigorous control mechanisms are in place, including a clearly defined cooperation agreement;
European Bank for Reconstruction and Development
8. Recalls that the idea of the EBRD, to foster the transition from command towards market-oriented
economies and to promote private enterprise, was first announced to Parliament on 25 October 1989;notes that in contrast to the Commission, the EBRD lays strong emphasis on central ex-ante control by
its Chief Economist and independent ex-post evaluation of projects; welcomes the importance given to the
principles of additionality and conditionality by the EBRD; looks forward to examining the Banks effec-tiveness in promoting private enterprise in Central and Eastern Europe and the Commonwealth of Inde-pendent States, following an audit by the Court of Auditors;
Court of Auditors
9. Invites the Court to report in its annual report for 2000 on progress by the Commission, European
Investment Bank and Member States in remedying the weaknesses highlighted in this resolution and in itsspecial reports; looks forward to examining the audit on venture capital funds supported by the Commis-sion;
*
**
10. Instructs its President to forward this resolution to the Council, the Commission, the Court of
Auditors and the European Investment Bank.
6. Company law concerning takeover bids ***III
A5-0237/2001
European Parliament legislative resolution on the joint text approved by the Conciliation Commit-
tee for a European Parliament and Council directive on company law concerning takeover bids
(C5-0221/2001  1995/0341(COD))
(Codecision procedure: third reading)
The European Parliament,
 having regard to the joint text approved by the Conciliation Committee and the relevant Commission
statement (C5-0221/2001),
 having regard to its position at first reading (1) on the Commission proposal to the European Parlia-
ment and the Council (COM(1995) 655) (2),
 having regard to the amended proposal (COM(1997) 565) (3),
 having regard to its position at second reading (4) on the Council common position (5),
(1) OJ C 222, 21.7.1997, p. 20.
(2) OJ C 162, 6.6.1996, p. 5.
(3) OJ C 378, 13.12.1997, p. 10.
(4) Texts Adopted, 13.12.2000, Item 9.
(5) OJ C 23, 24.1.2001, p. 1.C 65 E/112 EN 14.3.2002 Official Journal of the European Communities
Wednesday 4 July 2001