WRITTEN QUESTION E-0770/01 by Charles Tannock (PPE-DE) to the Commission. The Commission's criticism of the Irish government's fiscal policy.
Date: 2001-03-13
Institutions: European Parliament, Provisional data
Subjects: Ireland, euro area, fiscal policy, inflation

C 340 E/88

Official Journal of the European Communities

EN

4.12.2001

(cid:129) wholesale and retail trade (includes repairing);

(cid:129) hotels and restaurants;

(cid:129) transport, storage and communication;

(cid:129) financial intermediation.

2. Under ESA 79 (Nomenclature NACE-CLIO, Level R25):

(cid:129) fuel and power products;

(cid:129) manufactured products;

(cid:129) building and construction;

(cid:129) recovery and repair services, wholesale and retail trade services;

(cid:129) lodging and catering services;

(cid:129) inland transport services;

(cid:129) maritime and air transport services;

(cid:129) auxiliary transport services;

(cid:129) communication services;

(cid:129) total transport services and communications [in italics above];

(cid:129) services of credit and insurance institutions.

(2001/C 340 E/102)

WRITTEN QUESTION E-0770/01

by Charles Tannock (PPE-DE) to the Commission

(13 March 2001)

Subject: The Commission(cid:146)s criticism of the Irish government(cid:146)s fiscal policy

Does the Commission accept the view of the European Central Bank that inflation is essentially a monetary
phenomenon, and, if so, does it accept that the current level of inflation and overheating of the economy
in Ireland is due not to the Irish government(cid:146)s fiscal policy (accepting that fiscal policy can alter the
balance between the private and public sectors and, therefore, the efficiency in the allocation of resources
and the future productive capacity of the economy) but to the inappropriateness of the (cid:145)one-size-fits-all(cid:146)
interest rate within the eurozone area which would pose significant problems for the U.K. were it to join
the euro?

Could the Commission also explain why it chose to criticise Ireland, which, by common consent, has one
of the most successful economies in the eurozone, and not France which has very high levels of public
expenditure or Spain, which has a higher rate of inflation than Ireland?

Answer given by Mr Solbes Mira on behalf of the Commission

(16 May 2001)

The Commission believes that fiscal policy can contribute positively or negatively to economic stability,
including price stability. Moreover, the lack of a national monetary policy in monetary union implies that
economic policy tools that remain under the independent authority of national governments, such as fiscal
policy, must be used more actively to achieve macro-economic stabilisation.

The spectacular growth rates of the Irish economy have recently led to overheating, with a positive output
gap, a tightening labour market and high inflation. In the Broad Economic Policy Guidelines (BEPGs) for
2000, the Irish authorities committed themselves to gearing budgetary policy to the objective of economic
stability, which, given the extent of overheating, should be interpreted as the need for a neutral, or
preferably, tighter fiscal stance.

4.12.2001

EN

Official Journal of the European Communities

C 340 E/89

The stability/convergence programmes and the implementation of budgetary plans in all EU member states
are examined closely by the Commission and the Council, which may decide to issue and publish
recommendations whenever it deems there is inconsistency with the adopted BEPGs.

In the Commission(cid:146)s and Council(cid:146)s view, Irish budget plans for 2001, announced in December 2000, are
stimulatory and pro-cyclical and therefore inconsistent with the BEPGs. The Council therefore issued, for
the first time, a recommendation to end the inconsistency with the BEPGs.

The situations of the French and Spanish economies are different and policy is not construed as having
contradicted the BEPGs. The French economy has one of the lowest inflation rates in the euro zone.
Moreover, French fiscal policy cannot be considered as pro-cyclical. Spain is indeed currently experiencing
a high rate of inflation, but fiscal policy has been and continues to be restrictive and also therefore is not
pro-cyclical.

(2001/C 340 E/103)

WRITTEN QUESTION E-0773/01

by Jorge HernÆndez Mollar (PPE-DE) to the Commission

(13 March 2001)

Subject: Cultivation of grapes to produce certain varieties of dried grapes

On 22 July 1999 the Commission adopted Regulation (EC) No 1621/1999 (1) on aid for the cultivation of
grapes to produce certain varieties of dried grapes.

Since this regulation came into force and despite its generous provisions, in MÆlaga province (Spain) the
area given over to muscatel grapes intended for the production of dried grapes has been reduced.

The regulation establishes a contract-based system as the main channel for receiving aid. However, the
deadlines chosen are creating producer insecurity: 1 August is too early to set a price adjusted to demand
(muscatel raisins are traditionally sold at Christmas), and the contract mechanism thus obliges producers to
make a contract on pain of not receiving any Community aid.

In the last marketing year prices were offered in November to non-contract producers at a level exceeding
(cid:129) by ESP 100/kg (cid:129) the average price laid down in contracts signed three months previously. While the
regulation provides for the possibility of negotiating, in practice this does not happen since buyers are not
interested: accordingly, the contract price prevails.

Some standard contracts define the payment date as being six months from delivery of the dried grapes:
this is too long a time-lag for fragile economies such as those of this sector. Buyers may also attempt to tie
the date of payment of Community aid (31 May) to the date of payment for the product.

Is the Commission willing to consider altering the contract timetable for muscatel grapes cultivated in
MÆlaga province with a view to the production of dried grapes by setting a date (e.g. 31 October) more in
line with demand for the product?

Should this not be possible, would the Commission consider introducing a system to put an end to the
dominant position of the buyer in the case of dried grapes?

Would the Commission consider proposing that the contract should no longer make reference to the
payment date, given that this is not required under Regulation (EC) No 1621/1999, or, should such
reference continue to be made, that the payment period should in future not extend up to the delivery
deadline?

(1) OJ L 192, 24.7.1999, p. 21.