WRITTEN QUESTION E-0851/01 by Christopher Huhne (ELDR) to the Commission. Budget positions of eurozone members.
Date: 2001-03-22
Institutions: European Parliament, Provisional data
Subjects: budget policy, economic analysis, economic model, euro area, impact study, interest, public debt, stability pact

C 340 E/106

Official Journal of the European Communities

EN

4.12.2001

(2001/C 340 E/121)

WRITTEN QUESTION E-0834/01

by Cristiana Muscardini (UEN) to the Council

(28 March 2001)

Subject: Organised environmental crime in European countries

(cid:129) Criminal organisations which harm the environment
in many European countries,

(the (cid:145)eco-mafia(cid:146)) have become excessively
powerful
including Italy. This (cid:145)eco-Mafia(cid:146) makes billions by illegally
disposing of highly toxic waste which then becomes an ecological time-bomb, destroying the health
not only of the current population but of future generations, who will be irredeemably condemned by
polluted water, soil and air.

(cid:129) Examples of such activities were recently shown on Italian public television channels. Moreover,
members of the city council and the decentralised local authority of Milan have recently submitted an
alarming complaint concerning the risk of leakage of dioxins contained in drums illegally buried deep
underground, close to the water-table,
in the area earmarked for the construction of Milan(cid:146)s new
purification plant. This new plant has been approved by the EU, which has already called for the work
to begin.

(cid:129) Given that construction of the purification plant has become urgent and

(cid:129) that the (cid:145)eco-Mafia(cid:146) has enormous capacities to thwart checks of any kind,

Can the Council state:

1. whether it plans to take action in support of Milan, so that the decontamination can be carried out as
carefully as possible, enabling an immediate start to be made on the construction of the purification
plant;

2. whether or not it considers it necessary to set up a task-force,

in which all the Member States
participate, to identify and decontaminate illegal dumps of toxic waste and to take legal action, both in
individual countries and at Community level, against the various criminal organisations which harm
the environment, making use of Interpol and public health and environmental organisations?

Reply

(16 July 2001)

The Council fully shares the concerns voiced by the Honourable Member regarding the need to ensure that
toxic waste is disposed of in compliance with the regulations in force, so as to avoid accidents like that
which occurred at Seveso.

The Council would nevertheless point out that it is the Commission which is responsible for administering
aid allocated in that context. The Honourable Member is therefore invited to contact the Commission with
regard to the safety and efficiency of the work to be carried out.

For the rest, it will be for the competent national authorities to seek specialist legal and technical advice as
they see fit.

(2001/C 340 E/122)

WRITTEN QUESTION E-0851/01

by Christopher Huhne (ELDR) to the Commission

(22 March 2001)

Subject: Budget positions of eurozone members

Will the Commission estimate, on the basis of the econometric models available to it, the impact on
eurozone interest rates of a one percentage point tightening or loosening in the structural (cyclically
adjusted) budget position of each of the eurozone members?

4.12.2001

EN

Official Journal of the European Communities

C 340 E/107

Answer given by Mr Solbes Mira on behalf of the Commission

(27 June 2001)

The Commission has not estimated the impact on eurozone interest rates of changes in the structural
budgetary positions of each of the eurozone members.

In the Commission(cid:146)s economic model, permanent changes in government debt crowd-out private
interest rates in the long term. The degree to which interest rates rise
expenditure and drive up real
depends crucially on the interest sensitivity of consumption. There is no consensus in the literature on the
effect of public debt on interest rates and empirical studies send conflicting signals. Evidence from the
literature testing for Ricardian Equivalence is mixed. Some studies have found support for the notion that
Ricardian Equivalence describes the data quite well and find no correlation between public debt and
interest rates. However, Tanzi and Chalk (1), looking at the Community panel as a group, find that for the
period 1970-1998 a 10 percent of gross domestic product (GDP) increase in the average Community debt-
GDP ratio leads to an increase in real interest rates by 0,6 percentage points. The existence of an impact of
debt on interest rates at the Community level seems to suggest that it is changes in the debt in the region
as a whole that are of more relevance for interest rates than debt of individual countries. However, the size
of the effect they find for the 1980-1998 subsample is much smaller, at 0,1 percentage points.

Simulations with the Commission(cid:146)s economic model, in which Ricardian Equivalence does not fully hold in
the long run, suggest that a permanent increase in the debt to GDP ratio of 10 percentage points can raise
real interest rates in the long term by between 0,2 and 0,3 percentage points.

(1) V. Tanzi and N. Chalk, (cid:145)Impact of Large Public Debt on Growth: a Discussion of Potential Channels(cid:146), EE R & S No 2,

2000.

(2001/C 340 E/123)

WRITTEN QUESTION E-0853/01

by Christopher Huhne (ELDR) to the Commission

(22 March 2001)

Subject: Fiscal policy in the Member States

Does the Commission consider that there are any financial circumstances in which a Member State
government might legitimately pursue a pro-cyclical fiscal policy? If so, what are they?

Answer given by Mr Solbes Mira on behalf of the Commission

(13 June 2001)

The economic policy framework set up by the Maastricht Treaty and complemented by the Stability and
Growth Pact requires that Member States avoid excessive deficits and reach budgetary positions close to
balance or in surplus over the medium term. The co-ordination of economic policies takes, among others,
the form of a set of Broad Economic Policy Guidelines (BEPG), which must be implemented by the
Member States. Concerning the issue of pro-cyclical fiscal policy, the BEPG 2000 specify that (cid:145)given
expected output growth above the potential rate, a pro-cyclical stance of budgetary policy should be
avoided.(cid:146)

Besides amplifying output fluctuations, implementing a pro-cyclical fiscal policy in the upper part of the
cycle could also imply a pro-cyclical tightening in slowdowns, especially for Member States with too high
a deficit and which risk breaching the 3 % reference level. In this case, the EC Treaty foresees that a Member
State could be urged by the Council to improve its budgetary position, which would result in a pro-cyclical
stance. This clause represent a deterrent to prevent bad fiscal behaviour and the pro-cyclical effects are
considered to be less critical than achieving sound budgetary positions.