WRITTEN QUESTION E-0799/00 by Sami Naïr (PSE) to the Commission. Commission communication on its strategic objectives 2000-20005 and work programme for the year 2000 (COM(2000) 155 final).
Date: 2000-03-16
Institutions: European Parliament, Provisional data
Subjects: common commercial policy, economic consequence, fight against unemployment, job security, labour flexibility, liberalisation of trade, organisation of work, social security

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Official Journal of the European Communities

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Does the Commission accept that by exploiting this tax loophole insurance companies are gaining an
unfair advantage over independent vehicle repair companies? Will the Commission subsequently state what
action it proposes to take to rectify this situation?

Answer given by Mr Bolkestein on behalf of the Commission

(2 May 2000)

When an insurance company sets up its own garage in order to repair its customers(cid:146) cars and these repairs
are carried out by employees of this insurance company, these supplies by the employee to the insurance
company are outside the scope of value added tax (VAT).

On the other hand, it is indeed the case that if a garage carries out a similar service for an insurance
company, it will have to invoice VAT on the service. The garage does, however, have a right to deduct the
input VAT it incurs on all its investments for equipment, spare parts, etc., which the insurance company,
being a tax-exempt body, is unable to do. For the latter, this inability to deduct the input VAT amounts to
an additional cost element that compensates for the fact that the insurance company does not have to
charge VAT on its labour costs when it has cars repaired by its own employees.

The Commission is aware of this situation, which arises from the fact that insurance transactions are
exempted from VAT under Article 13.B.(a) of the Sixth VAT Council Directive 77/388/EEC of 17 May
1977 on the harmonization of the laws of the Member States relating to turnover taxes (cid:129) Common
system of value added tax: uniform basis of assessment (1). The Commission is examining the possibility of
moving from exemption to taxation in the assurance sector but has no immediate plans for action in this
area.

(1) OJ L 145, 13.6.1977.

(2001/C 53 E/030)

WRITTEN QUESTION E-0799/00

by Sami Na(cid:239)r (PSE) to the Commission

(16 March 2000)

Subject: Commission communication on its strategic objectives 2000-20005 and work programme for the

year 2000 (COM(2000) 155 final)

1.
On the subject of trade relations, the Commission states that its main objective remains (cid:145)seeking
further trade liberalisation as a stimulus to growth and development, by strengthening the rules-based
trading system(cid:146).

(a) What specific measures does it envisage, particularly in the context of the WTO negotiations?

The Commission is about to launch the first stage consultation of the social partners on adaptability

2.
and modernisation of work organisation and working conditions.

(a) Can it provide details of the measures it intends to promote?

(b) Can it clarify what it means by the (cid:145)modernisation(cid:146) of social protection systems?

(c) Does it consider that flexibility and lack of job security is the price that has to be paid for combating

unemployment?

Answer given by Mr Prodi on behalf of the Commission

(9 June 2000)

The Community wishes to further trade liberalisation and strengthen the multilateral rules-based

1.
system by means of a fourfold agenda for a new trade round.

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20.2.2001

First, as regards further trade liberalisation, both developed and developing countries seek improved market
access for their products and services, in order to increase economic growth. The Community therefore
seeks an approach to liberalisation that, by covering all sectors, enables all members to exploit their
comparative advantages and thus increase their trade.

Second, the World Trade Organisation (WTO) also needs to update its rules to respond to the effects of
globalisation, so that traders and investors can enjoy a predictable, transparent and non-discriminatory
framework in which to make their economic decisions and to compete. Basic rules on investment and
competition are necessarily part of such an agenda and will go some way towards providing this
environment. There continues to be solid support from a large group of WTO members for the inclusion
of these issues in a new trade round, and it is a matter of regret that at Seattle negotiations on two subjects
of such systemic importance and of benefit to companies around the world could not be launched. It is
similarly regrettable that it was not possible to begin negotiations on either trade facilitation or on
improvements to rules in areas like trade defence or technical barriers to trade, all of which will contribute
to more predictable market access conditions and to the freer flow of goods. The Community continues to
aim to include all these rulemaking questions in the new round that it wishes to see launched as soon as
possible.

Third, Seattle also highlighted acutely the need for better integration of developing countries into the
trading system through better market access, improved special and differential treatment, better coordi-
nated capacity building, and a more active role within the WTO mechanisms. A new round will enable the
developing countries(cid:146) trade agenda (cid:129) including more sensitive issues (cid:129) to be comprehensively addressed.
The Community gives priority therefore to the integration of developing country concerns into the new
round.

Finally the Community(cid:146)s agenda for the round seeks to address several questions of concern to govern-
ments and the wider public. Our societies remain concerned over the potential influence of the trading
system on the environment, sustainable development, social issues, and consumer health and safety, and
seek answers that both safeguard the trading system and these societal concerns. In view of the limited
support of other WTO members on these issues, the Community needs to explain more clearly and
specifically its objectives in these areas given the strong suspicion in developing countries regarding the
real aims or consequences of the proposals put forward by the Community to meet civil society concerns.

2.

(a) The Commission intends to consult the social partners on the possible direction of Community
action with regard to the development of a set of agreed principles to modernise and improve
employment relations and a framework for action. The Commission may also wish to consult the
social partners on the establishment of framework provisions at Community-level in specific areas,
such as telework.

(b) For a number of years the Commission has been promoting an exchange between the Member States,
on a co-operative basis, on the common challenges facing them in relation to the future development
of their social protection systems. The Commission presented in July 1999 a communication (1)
proposing a new and deeper co-operation based on four major themes: to make work pay and
provide a secure income; to make pensions safe and pension systems sustainable; to promote social
inclusion; and to ensure high quality and sustainable health care. The Commission(cid:146)s proposal was
endorsed by the Council before Christmas 1999 and by the Parliament in February 2000. One aspect
of the new co-operation as proposed in the Commission(cid:146)s communication (cid:145)The Commission(cid:146)s work
programme for 2000(cid:146) (2) (and endorsed by the Council and the Parliament) is to invite the social
partners to contribute to the exchange.

(c) No. The Commission believes that improvements in both flexibility and security can and should go
hand in hand with measures to increase employment. In many cases, increased flexibility, especially in
the way work is organised within a company, can bring benefits to both employers and workers. The
company benefits because the work can be organised in a more productive way, while workers can
enjoy increased job security and greater flexibility in organising their lives, for example in relation to
working time. Such flexibility will increase the competitiveness of companies and can thus have a

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positive effect on employment levels. In some other cases, for example, where companies seek to
adopt aggressive (cid:145)hire and fire(cid:146) strategies,
it is particularly important to ensure that the workers
concerned are adequately protected. Furthermore, it is not clear that this type of flexibility leads to
increases in overall levels of employment.

(1) COM(1999) 347 final.
(2) OJ C 81, 21.3.2000.

(2001/C 53 E/031)

WRITTEN QUESTION E-0803/00

by Ilda Figueiredo (GUE/NGL) to the Commission

Subject: Community support for the Lacto-IbØrica undertaking

(16 March 2000)

Lacto-IbØrica used to have a cheese factory in Ponte de Lima, producing cheese with the trademark
(cid:145)Limiano(cid:146) and employing more than 100 workers. The undertaking, which received Community funding,
has since decided to cease production in Ponte de Lima and concentrate production in Vale de Cambra,
several hundred kilometres away, which in practice means that most of the workers will be made
redundant.

Can the Commission answer the following:

1.

Is it aware of the Lacto-IbØrica projects which received Community funding? What amounts were
allocated and how much was actually paid?

2. Were there any conditions attached to these projects in terms of maintaining jobs and production in

the Ponte de Lima factory?

Answer given by Mr Fischler on behalf of the Commission

(19 May 2000)

Lacto-IbØrica was granted aid from the Guidance Section of the European Agricultural Guidance and
Guarantee Fund (EAGGF) for a project to modernise installations at its Ponte de Lima industrial unit. The
project was approved in March 1997 and the financing plan was: total investment PTE 519 662 000,
national aid approved PTE 74 765 236, EAGGF aid approved PTE 224 295 705.

In July 1998 the recipient applied for authorisation to move the investment to its Vale de Cambra
industrial site in order to concentrate its activities at this location. Since the direct contractual links with
the milk producers were not to be altered the national authorities agreed.

In May 1999 the recipient received a first instalment of PTE 144 456 876, for work already carried out.

For processing and marketing projects for agricultural products there are rules on Community origin and
maintenance of the investment but none on employment.

The Commission has been informed by the Portuguese authorities responsible for implementation of
operational programmes that Lacto-IbØrica (cid:129) Industria de lacticinios e quejios, SA has received support
from the European Social Fund for vocational training projects. The amounts approved were PTE 704 170
under Community Support Framework (CSF) I (1989-1993) and PTE 15 373 078 under CSF II (1994-
1999). The amounts actually paid were PTE 565 336 and PTE 7 484 400 respectively.

For such vocational training support no rules apply on job maintenance or the activity of the production
unit.