WRITTEN QUESTION E-0629/01

by Theresa Villiers (PPE-DE) to the Commission

(6 March 2001)

Subject: Lisbon European Council and financial services

1. The 2000 Lisbon European Council stated that steps should be taken to facilitate the successful participation of all investors in an integrated market eliminating barriers to investment in pension funds; promoting further integration and better functioning of government bond markets through greater consultation and transparency on debt issuing calendars, techniques and instruments, and improved functioning of cross-border sale and repurchase (repo) markets; enhancing the comparability of companies' financial statements; and more intensive co-operation by EU financial market regulators. What steps have been take in this regard?

2. The 2000 Lisbon European Council stated that steps should be taken to ensure full implementation of the Risk Capital Action Plan by 2003. Does the Commission believe this target will be met, and to what evidence can it point to support its view?

3. The 2000 Lisbon European Council stated that steps should be taken to conclude, in line with the Helsinki European Council conclusions, the pending tax package. What steps have been taken in this regard?

4. The 2000 Lisbon European Council requested the Council and the Commission, using the existing procedures, to present a report by Spring 2001 assessing the contribution of public finances to growth and employment, and assessing, on the basis of comparable data and indicators, whether adequate concrete measures are being taken in order to alleviate the tax pressure on labour redirect public expenditure towards increasing the relative importance of capital accumulation [and] ensure the long-term sustainability of public finances. When will this report be presented?

Answer given by Mr Solbes Mira on behalf of the Commission

(14 June 2001)

The conclusions of the Lisbon European Council (March 2000) afforded high priority to measures that would help to complete the Internal market for financial services and to improve the efficiency of Community financial markets. Several specific areas for action were identified in the conclusions and important progress has been made in these areas over the past year.

With respect to the implementation of the Financial Services Action Plan (FSAP), the Commission presented on 11 October 2000 a proposal for a directive on institutions for occupational retirement provision(1) (pension funds). One aim is to ensure that institutions enjoy sufficient freedom to develop an effective investment policy. This will be a decisive step towards the elimination of barriers to investment in pension funds.

The Commission presented on 13 February 2001 a proposal for a regulation(2) that would require all Community companies listed on a regulated market, including banks and insurance companies, to prepare consolidated accounts in accordance with International Accounting Standards (IAS). Member States would have the option to extend this requirement to unlisted companies and to the production of individual accounts. The Regulation would help eliminate barriers to cross-border trading in securities by enhancing the comparability of companies' financial statements.

More intensive co-operation by Community financial market regulators will be the result of an imminent Commission proposal for a directive on financial conglomerates. The proposed directive will require the appointment in individual cases of a co-ordinating supervisor. Another step towards closer co-operation between regulators was taken by setting up the Round Table of Regulators, comprised of the Chairmen and secretariats of all Community regulatory fora. This is an informal forum for the exchange of ideas and experience in the field of financial regulation.

In the mean time, there have been several developments contributing to the integration and improved functioning of government bond markets, notably the introduction of electronic trading in several of the Member States. There has also been further progress in the co-ordination of issuing techniques/instruments in the context of the Brouhns Group(3). In addition, the proposed Directive on collateral(4) should contribute to improving the functioning of the repro market.

In October 2000, the Commission published a further Communication to the Council and the Parliament reviewing progress in implementing the Risk Capital Action Plan (RCAP)(5). This Communication confirmed progress in developing Community risk capital markets since the late 1990's, but noted that the market remains rather small and fragmented. The Communication noted the importance of implementing those elements of the FSAP that are relevant to risk capital and pointed to actions already taken e.g. in respect of prudential supervision of supplementary pension funds, harmonised accounting standards etc. A number of priority areas for action at the national level were also highlighted, i.e. further relaxation of regulatory constraints on institutional investment in equity markets, continued easing of the administrative burdens on business have been lightened, removing major disincentive effects of bankruptcy and insolvency procedures and accelerating relevant tax reforms. While progress in implementing the RCAP is satisfactory, intensified efforts will be required if the deadline of 2003 - as set by the Lisbon European Council - is to be met.

Considerable progress has been made towards concluding the tax package in line with the Helsinki European Council conclusions. The first step was agreement at the European Council at Santa Maria da Feira in June 2000 on the way forward on the taxation of income from savings. Following this, a comprehensive agreement was reached in the Ecofin Council meeting on 26-27 November 2000 on all aspects of the tax package, with a view to seeing its final adoption in the Council by the end of 2002.

A report by Commission and Council on the contribution of public finances to growth and employment was presented to the Stockholm European Council in March 2001. The joint report addresses issues such as sustaining sound public finances, making tax and benefit systems more employment friendly and redirecting public expenditure towards physical and human capital accumulation.

(1) Proposal for a directive of the Parliament and the Council on the activities of institutions for occupational retirement provisions, COM(2000) 507 final.

(2) Proposal for a regulation of the Parliament and the Council on the application of international accounting standards, COM(2001) 80 final.

(3) The Economic and Financial Committee Sub-Group on Community Government Bonds and Bills.

(4) Proposal for a Directive from the Council and the European Parliament on financial collateral arrangements, COM(2001) 168 final.

(5) Progress report on the Risk Capital Action Plan, COM(2000) 658 final.