WRITTEN QUESTION E-2233/99 by Christopher Huhne (ELDR) to the Commission. Capital flows into Switzerland.
Date: 1999-12-01
Institutions: European Parliament, Provisional data
Subjects: International Monetary Fund, Switzerland, capital movement, economic analysis, financial statistics, savings, tax harmonisation, tax on investment income

C 225 E/76

Official Journal of the European Communities

EN

8.8.2000

work among the unemployed should be consistent with the preventive and activation approaches in the
employment guidelines (1). The public employment services play a significant role in administering and
developing preventive and employability-enhancing policies overall.

The array of regulations and administrative procedures applicable to work tests in each Member State is
complex. An overview of some key features of different practices of the work test in selected Member
States can be found in the recent report by the Organization for economic cooperation and development
(OECD) (cid:145)Making work pay: the role of eligibility criteria for unemployment benefits(cid:146) (1999). The Employ-
ment Observatory and its regular publications Mutual information system on employment policies (MISEP)
and Community system of documentation on employment (SYSDEM (2)), operated by the Commission in
collaboration with the Member States, is another useful source of detailed information on key features of
current regulations and policy reforms in the Member States in the labour market and related social benefit

(1) OJ C 69, 12.3.1999.
(2)

http://www.ias-berlin.de/ias/first/1english.htm.

(2000/C 225 E/076)

WRITTEN QUESTION E-2233/99

by Christopher Huhne (ELDR) to the Commission

(1 December 1999)

Subject: Capital flows into Switzerland

Detail the gross and net capital inflows into Switzerland, the gross flows, where possible, by source and by
type of instrument purchased (bank deposit, bond, etc.), over each of the last ten years. Has there been any
noticeable change in flows as a result (a) of the Swiss debate, including the referendum, on the nature of its
relationship with the EU and (b) of the Commission proposal for a withholding tax (in the savings
directive)?

Answer given by Mr Solbes Mira on behalf of the Commission

(21 January 2000)

The Commission is sending direct to the Honourable Member and to Parliament(cid:146)s Secretariat the available
statistics (International monetary fund (IMF) statistics, financial accounts), which show that there has been
an increasing net outflow of capital from Switzerland over the period 1989 to 1998. This corresponds
over the years broadly to an excess of domestic savings over domestic investments that was channelled
abroad. Among the various types of flows, direct investments show a marked trend of increasing net
outflows, whereas portfolio investments and short-term flows ((cid:145)Other flows in the statistics(cid:146)) exhibit large
fluctuations around an only modestly increasing trend. The major peaks for portfolio investments are
grouped in the two periods of 1993-1994 and 1996-1997, whereas short-term net outflows peaked in,
respectively, 1990 and 1998. The movements observed, as well as the underlying gross flows, coincide
rather well with periods of pronounced volatility on financial markets (for instance, the currency crises in
Europe and the global bond crisis during 1992-1994; the increasing international presence of Swiss banks
starting from 1995; the global financial crises of 1997-1998; and in addition market movements due to
the advent of economic and monetary union). Possible results from the events mentioned by the
Honourable Member seem apparent only in the case of direct investment.

Inward direct investments show a marked decline in 1992-1993, but have thereafter regained earlier levels.
In contrast, outward direct investments started a period of pronounced increases after 1992, from having
been relatively stable in the period before. These developments could perhaps to a certain extent be
attributed to a change in confidence in the Swiss economy following the referendum.

8.8.2000

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Official Journal of the European Communities

C 225 E/77

Apart from the above, the year-to-year development of capital flows does not indicate any marked effects
either from the referendum or from the current Community proposal for a proposal for a Council directive
to ensure a minimum of effective taxation of savings income in the form of interest payments within the
Community (1). The developments mentioned earlier, as well as more persistent trends, such as the
globalisation of financial markets, all contributed to influence the capital flows and appear to dominate
their variation. Still, a possible influence from Community efforts to harmonise capital income taxation
could materialise eventually, once a new directive concerning capital income taxation is adopted and the
public and the market can learn the precise content of the new legislation,
implementation date and
implications.

(1) OJ C 212, 8.7.1998.

(2000/C 225 E/077)

WRITTEN QUESTION E-2236/99

by Christopher Huhne (ELDR) to the Commission

(1 December 1999)

Subject: Replacement rates

What are the typical replacement rates (benefit payments on unemployment as a percentage of earnings)
for each of the Member States and, for comparison, the United States and Japan?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(11 January 2000)

The definition and management of social benefit schemes (cid:129) including their relative level of assistance, the
replacement rates (cid:129) fall within the responsibility and legal competence of the Member States.

Policy issues related to tax and benefit systems, and their impact on the labour market, have been given an
increasing weight in the employment guidelines (1) and the broad economic policy guidelines in recent
years.

Some analysis and data on replacement rates for the Community, the United States and Japan have been
published in (cid:145)The EU Economy 1999 Review(cid:146), Part II, Chapter 2 (2), and further analysis based on data from
the European Community household panel (ECHP) will be published in the forthcoming (cid:145)Social Protection
in Europe(cid:146) report 1999. These documents deal with some of the conceptual issues involved in defining and
measuring replacement rates and provide some examples of the results obtained.

(1) OJ C 69, 12.3.1999.
(2)

European Economy series No 69.

(2000/C 225 E/078)

WRITTEN QUESTION P-2247/99

by Neil MacCormick (Verts/ALE) to the Commission

Subject: The Structural Funds and regional assistance

(19 November 1999)

1. Will the Commission confirm that any award to a Member State of structural funding, for example
under Objective 1 or Objective 2, is subject to the rule of additionality, that is that the Member State must
ensure that expenditure of the funds in question by a local or regional level of government does not
replace expenditure from existing budgets but is additional to them? Does this require a dedication of
matching funds within locally secured budgets to match expenditure facilitated through the Structural
Funds?