WRITTEN QUESTION E-1228/00 by Sebastiano Musumeci (UEN) to the Commission. Reduction of the tax and social contributions burden on undertakings in southern Italy.
Date: 2000-04-14
Institutions: European Parliament, Provisional data
Subjects: Abruzzi, Apulia, Basilicata, Calabria, Campania, EU aid, Latium, Molise, Sardinia, Sicily, aid to undertakings, eligibility criteria, social-security contribution, tax relief, unemployment

20.3.2001

EN

Official Journal of the European Communities

C 89 E/17

Moreover, in January 2000 the Commission sent administrative letters to the Member States in order to
obtain information on the measures which they have taken in order to ensure that national legislation is in
conformity with Decision No 128/1999/EC. This includes looking into the relevant legislation in particular
with regard to selection procedures for licences to provide 3G services, measures taken to promote
competition in the market and measures taken to ensure coverage of regions with low population density.

According to the information available to the Commission, Member States which have adopted 3G
licensing procedures have prohibited multiple licence applications by single operators or by groups of
operators. On the other hand, the fact that individual operators or groups seek to obtain licences in a large
number of Member States is not objectionable as such, as it may contribute to the further integration of
the European mobile market and the improvement of services to European consumers. Surveillance against
abuses of dominant position will continue to be enforced in accordance with Community competition
rules, and taking into account the interests of consumers.

(1) OJ L 117, 7.5.1997.
(2) OJ L 20, 26.1.1996.
(3) OJ L 17, 22.1.1999.

(2001/C 89 E/015)

WRITTEN QUESTION E-1228/00

by Sebastiano Musumeci (UEN) to the Commission

(14 April 2000)

Subject: Reduction of the tax and social contributions burden on undertakings in southern Italy

including Ireland, the Netherlands and
Given that the Commission has allowed other Member States,
Portugal, to provide assistance to firms operating in disadvantaged and run-down areas and that in
southern Italy, and particularly Sicily,
the development of small and medium-sized undertakings is
seriously limited by Italy(cid:146)s draconian fiscal policy, could the Commission state whether it considers that
the following could be envisaged for southern Italy:

1. measures to assist undertakings by reducing the burden of tax and social charges to which they are

subject with a view to increasing investment and employment?

2.

inclusion of the unemployment rate as a benchmark criterion for the allocation of Community funds?

Answer given by Mr Monti on behalf of the Commission

(9 June 2000)

Provided that the conditions laid down by the EC Treaty are met, the Commission authorises the aid which
a Member State decides to grant in order to pursue certain objectives, such as the economic development
of areas where the standard of living is abnormally low or where there is serious underemployment, the
execution of important projects of common European interest or to remedy a serious disruption in the
economy of a Member State, or the development of certain economic activities or of certain economic
areas, or culture and heritage conservation. Through the Structural Funds, the Commission may contribute
to the co-financing of national aid schemes, which it has first authorised.

Aid intended for regional development which a Member State decides to grant firms by reducing the
burden of tax and social contributions with a view to increasing investment and employment may be
considered to be compatible with the EC Treaty if it complies with all the conditions laid down by the
Community Guidelines on national regional aid and the Guidelines on aid to employment (1) and, where
appropriate, by the Commission notice on the application of the state aid rules to measures relating to
direct business taxation (2). The latter states in particular that, if it is to be considered by the Commission
to be compatible with the common market, state aid intended to promote the economic development of
particular areas must be (cid:145)in proportion to, and targeted at, the aims sought(cid:146).

Tax measures or measures to reduce social contributions which are not directly linked to initial investment
or to job creation but are aimed at reducing a firm(cid:146)s current expenses are normally prohibited.
Exceptionally, however, such aid may be granted in regions eligible under the derogation in Article 87(3)
(formerly Article 92(3)) of the EC Treaty provided that (i) it is justified in terms of its contribution to
regional development and its nature and (ii) its level is proportional to the handicaps it seeks to alleviate. It
is for the Member State to demonstrate the existence of any handicaps and gauge their importance.

C 89 E/18

Official Journal of the European Communities

EN

20.3.2001

On 1 March 2000 the Commission decided that the south of Italy satisfied the eligibility criteria for the
derogation in Article 87(3)(a) of the EC Treaty for the duration of the new regional aid map, i.e. until
31 December 2006.

In the case of the Structural Funds, the unemployment rate is one of the criteria used by the Commission
to apportion between the Member States the commitment appropriations allocated under Objectives 1
and 3 for the period 2000-06. The unemployment rate is also one of the criteria used by the Commission
to determine in each Member State concerned the population ceiling eligible for Objective 2.

(1) OJ C 74, 10.3.1998, and OJ C 334, 12.12.1995.
(2) OJ C 384, 10.12.1998.

(2001/C 89 E/016)

WRITTEN QUESTION E-1246/00

by Bart Staes (Verts/ALE) to the Commission

(14 April 2000)

Subject: Adjustment programmes for tax systems in Southern Africa

In order to cope with the financial consequences of the free trade agreement between the European Union
and South Africa, Botswana, Lesotho, Namibia and Swaziland will have to drastically reform their tax
systems. Together with South Africa, these four countries are in a customs union and are not allowed to
levy duties at their common frontiers. Accordingly, EU products are bought and sold (cid:129) via South Africa (cid:129)
duty-free, even though Botswana, Lesotho, Namibia and Swaziland are heavily dependent on customs
tariffs for their revenue. In its answer to written question E-2382/99 (1), the Commission announced its
willingness to help the countries in Southern Africa with the tax reforms needed to diversify their sources
of income.

Has the Commission already started programmes for advising the countries in question on the tax

1.
reforms needed to diversify their sources of income? If not, why not?

2. When will the programmes be started and by when must the adjustments be made?

3. What institutions and/or organisations are involved in the programmes?

4. What is the main thrust of the programmes with the countries in question?

5. What budget will be released for the programmes?

(1) OJ C 280 E, 3.10.2000, p. 36.

Answer given by Mr Nielson on behalf of the Commission

(15 June 2000)

The Commission would like to repeat its assurance to the Honourable Member, following the answer to
the Honourable Member(cid:146)s Written Question E-765/00 (1), that the Community is ready to assist Botswana,
Lesotho, Namibia and Swaziland (BLNS) in implementing fiscal reform according to their own established
timetables and their own fixed priorities.

The Commission is currently assisting the BLNS countries, at their request, with the preparation of a
general support programme. The first phase will undertake analysis of adjustment issues arising from trade
liberalisation and prepare activities to take advantage of the new opportunities in addition to coping with
the necessary adjustment process. This phase is valued at € 6 million and is foreseen to be implemented
over a three year period from January 2001-December 2003. It could be set up as a BLNS wide or a South
facility, while its financing would come from a mix of European
African Customs Union (SACU)