WRITTEN QUESTION E-2715/00 by Christopher Huhne (ELDR) to the Commission. Price alignment in the euro zone.
Date: 2000-09-01
Institutions: European Parliament, Provisional data
Subjects: euro area, goods and services, price fluctuation, prices

13.3.2001

EN

Official Journal of the European Communities

C 81 E/215

(2001/C 81 E/275)

WRITTEN QUESTION E-2714/00

by Christopher Huhne (ELDR) to the Commission

(1 September 2000)

Subject: Average cost of capital in the euro zone

Will the Commission please estimate whether there has been a reduction in the average cost of capital in
real terms to euro-zone enterprises as a result of the introduction of the euro and the consequent growth
of the euro-denominated corporate bond market?

Answer given by Mr Solbes Mira on behalf of the Commission

(19 September 2000)

The euro bond market is undergoing fundamental changes as a consequence of the introduction of the
euro, technological change and globalisation. The introduction of the euro unified eleven national markets
into a single, fundamentally more homogeneous, euro area bond market. These features have been the
driving force behind the developments in the euro bond market, creating greater transparency, enhancing
competition among financial institutions, and promoting the development of a broader and more liquid
bond market which foster securitisation and disintermediation. These factors all work to enhance the
availability and lower the cost of capital to euro area enterprises.

1999 saw a tremendous increase in private sector issuance of debt, in particular in the corporate bond
sector where issuance increased almost four-fold compared to 1998. The significance of developments on
corporate bond markets stems from the fact that the Community financial system is predominantly bank-
oriented, as opposed to the more market-oriented system in the United States. The development of the
corporate bond market, providing an alternative to traditional bank financing, is greatly facilitating the
extensive and on-going restructuring of European industry. The growth of the corporate bond market will
therefore have important consequences for the financing of the economy in general and mergers and
acquisitions activity and corporate restructuring in particular.

(2001/C 81 E/276)

WRITTEN QUESTION E-2715/00

by Christopher Huhne (ELDR) to the Commission

(1 September 2000)

Subject: Price alignment in the euro zone

Will the Commission please examine the evidence that there has been an alignment of prices for similar
goods and service within the euro zone in anticipation of the transparency which will reach full effect in
the first six months of 2002?

How significant has this alignment been?

How much further is it likely to go, and is it likely to alter significantly the relationship between price
developments and growth?

Answer given by Mr Solbes Mira on behalf of the Commission

(21 September 2000)

The Commission is examining the alignment of prices for similar goods and services within the
Community in general and the euro zone in particular on a continuous basis. The results of these
investigations are presented in various reports and studies (1).

C 81 E/216

Official Journal of the European Communities

EN

13.3.2001

These examinations show a gradual process of price convergence in the 1990s. However, this process has
been rather uneven, not covering all goods and services and still influenced by exchange rate develop-
ments. Further, the level of price dispersion within the Community remains above that in the United
States.

It is difficult to say how much further the alignment of prices within the euro area will go, because the
European monetary union price transparency effect is just one of many factors having an impact on price
convergence. Nevertheless,
integrated American
economy may be considered as a lower bound.

the degree of price dispersion in the relatively well

A priori,
increased price transparency should lead to fiercer competition and put a strong downward
pressure on price levels, which should have a positive effect on the competitiveness of the euro area.
On the other hand, the possibility that the price transparency facilitates collusive behaviour should not be
excluded. This is one of the reasons why a strong Community antitrust policy is required.

(1)

(cid:145)Market integration and differences in price levels between EU Member States(cid:146), study 4 in The EU Economy:
1999 Review, European Economy, No 69, 1999. Section B2 in (cid:145)Economic Reform: Report on the functioning of
Community product and capital markets(cid:146), COM(2000) 26 final. Box 5 in the (cid:145)Report from the Commission on the
(cid:145)Car price differentials
implementation of the 1999 Broad Economic Policy Guidelines(cid:146), COM(2000) 143 final.
within the European Union on 1 May 2000(cid:146), Competition Directorate-General. Part E of the (cid:145)Single Market
Scoreboard(cid:146), No 6, May 2000. (cid:145)EMU and the integration of European product markets(cid:146), study carried out for the
Commission by Gasiorek et al., forthcoming.

(2001/C 81 E/277)

WRITTEN QUESTION E-2723/00

by Christopher Huhne (ELDR) to the Commission

(1 September 2000)

Subject: Agricultural workforce

Will the Commission indicate the number of people engaged in agriculture in each Member State in each
of the last ten years and what proportion of the total workforce in each case this represents?

(2001/C 81 E/278)

WRITTEN QUESTION E-2724/00

by Christopher Huhne (ELDR) to the Commission

(1 September 2000)

Subject: Tractors

What is the number of tractors per hundred hectares of arable land in each of the Member States?

(2001/C 81 E/279)

WRITTEN QUESTION E-2725/00

by Christopher Huhne (ELDR) to the Commission

(1 September 2000)

Subject: Milking machines

What is the number of milking machines per hundred cows in each of the Member States?