WRITTEN QUESTION E-2763/01 by Jonas Sjöstedt (GUE/NGL) to the Commission. VAT on exchange trips.
Date: 2001-10-09
Institutions: European Parliament, Provisional data
Subjects: VAT, cultural relations, exchange of information, language teaching, travel, youth exchange scheme

C 134 E/94

Official Journal of the European Communities

EN

6.6.2002

(2002/C 134 E/096)

WRITTEN QUESTION E-2762/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(9 October 2001)

Subject: EU support as a competitive advantage

In 1999 the Swedish Government reached a decision on the aid package for Bengtsfors. A Kr 60 million
employment subsidy was promised and persuaded the car firm TWR to decide to shift production of its
forthcoming special vehicle to the old Lear factory. The new factory is expected to provide 500 jobs in
2003. 50 million kronor in labour market support was also promised.

In respect of the Kr 60 million employment subsidy there has however been some debate as to whether the
Swedish Government was in a position to take that decision and whether it did not need approval by the
Commission. In respect of State aid to the motor vehicle industry, the Commission has to approve support
exceeding 5 million euro, the rough equivalent of 45 million Swedish kronor.

To an earlier question in 2000 concerning the above case the Commission said it was keeping an eye on
events concerning State aid for Bengtsfors. But the employment subsidy did not look as if it was going to
be the large amount we initially imagined. We do not know what has happened since then.

Has the Swedish Government employment subsidy of 60 million kronor to Bengtsfors in connection with
the Lear Corp. move been approved by the Commission?

Answer given by Mr Monti on behalf of the Commission

(26 November 2001)

In March 2001 the Swedish authorities at regional level decided to grant an employment aid of SEK 18,6
million (about € 1,9 million) to the company Nisch Produkter AB in Bengtsfors. Based on the information
this company belongs to the motor vehicle industry.
available to it,
According to the Community framework for State aid to the motor vehicle industry (1), aid which is
granted under an approved aid scheme and which does not exceed € 5 million for a particular project does
not have to be notified separately to the Commission.

the Commission believes that

The aid to Nischprodukter AB is granted under an employment aid scheme approved by the Commission
in 1997 (2), and the amount is below the threshold. Consequently, the aid did not have to be notified
separately to the Commission and can be considered to be approved.

(1) OJ C 279, 15.9.1997.
(2) State aid no E 23/95. OJ C 16, 21.1.1999.

(2002/C 134 E/097)

WRITTEN QUESTION E-2763/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(9 October 2001)

Subject: VAT on exchange trips

The Swedish press reports that in February 1999 that a case heard by the Court of Justice might result in
language businesses having to charge VAT on all exchange trips for young people to the USA and other
countries. In 1999 operators of language courses abroad did not pay VAT on exchange years, which were
regarded as cultural exchanges and therefore fell under different rules from for example shorter language
courses abroad. If operators of language courses abroad are forced to charge VAT on exchange years this
will probably produce higher prices which will hamper cultural exchanges and integration, which is meant
to be the point of the EU itself.

Has the Commission been following events in this case and does it take the view that exchange trips
should be subject to VAT?

6.6.2002

EN

Official Journal of the European Communities

C 134 E/95

Answer given by Mr Bolkestein on behalf of the Commission

(12 November 2001)

As far as the Commission knows, no case concerning the charging of VAT on exchange trips for young
people has been brought before the Court of Justice.

Any answer to the question whether such exchanges should be subject to VAT depends on the individual
circumstances or conditions under which such trips are organised. Given that we do not have more
detailed information we cannot give a definitive answer.

(2002/C 134 E/098)

WRITTEN QUESTION E-2765/01

by Jonas Sjöstedt (GUE/NGL) to the Commission

(9 October 2001)

Subject: Future food price increases in Estonia

The applicant countries are beginning to realise the new problems they will face under the EU agricultural
policy. EU prices will be a shot in the arm for Estonian farmers, to whom subsidies have in the past been a
completely unfamiliar idea. EU membership will send producer prices soaring. However,
for many
consumers food price rises will come as a shock. The Estonians, in particular the pensioners, have already
been hard hit by price rises as a result of a deregulated market economy. The prices of several Estonian
agricultural products will double or triple. In early 2001 the price of beef for example was only half the
EU price. The EU intervention price procedure will triple the retail price of apples, tomatoes and sugar.
According to a report in the Estonian newspaper Postimees, also in early 2001, the prices of butter and
beef would double.

There will be huge increases in farm incomes and the EU could in principle buy up Estonia’s entire farm
production for a year with a view to raising producer prices to EU levels. Prices for powdered milk, certain
fruit and corn will very probably rise as well. The question is rather what the consumer will be able to do
about it.

How is the Commission planning to tackle this problem so that Estonian consumers are not extremely
hard hit on accession to the common agricultural policy?

Answer given by Mr Verheugen on behalf of the Commission

(14 November 2001)

The Commission is monitoring agricultural price differences between the Community and the candidate
countries. The general trend in recent years has been towards a convergence of farm-gate prices in the
candidate countries with the Community. This is a process expected to continue in the run-up to
accession, reducing the likelihood that consumers in the new Member States will face significant price
shocks upon accession.

In Estonia for most cereals and pigmeat, the price gap has become relatively small at farm-gate levels in
recent years. For a few products such as beef, milk and sugar a significant price gap remains. However, for
beef and milk, this can be explained largely by quality differences.