WRITTEN QUESTION E-0014/03 by Christopher Huhne (ELDR) to the Commission. Economic integration.
Date: 2003-01-20
Institutions: European Parliament, Provisional data
Subjects: EU Member State, budget estimate, economic forecasting, economic integration, gross domestic product, inflation, stability programme

26.2.2004

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Official Journal of the European Union

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Does the Commission agree that the solution opted for, which creates difficulties for EU residents who
choose to work in a neighbouring country but continue to live in their own country, or vice versa, will
discourage mobility of labour, the promotion of which is an important element in the Lisbon strategy?

Will the Commission publish a communication about the differences between the fiscal allocation rules (cid:1)
as laid down in a number of bilateral tax conventions or the OECD Model Convention (cid:1) and the
allocation rules laid down in Regulation No 1408/71 (restricted to wage-earners)?

(1) OJ L 149, 5.7.1971, p. 2.

Answer given by Mr Bolkestein on behalf of the Commission

(13 February 2003)

Under current Community law, direct taxation still falls essentially within the competence of Member
States. In the absence of harmonisation, the conclusion of agreements with a view to avoiding double
taxation and, in doing so, allocating tax jurisdiction between themselves falls within that competence. The
legitimacy of this practice has been recognised by the Court of Justice (Case C-336/96 Gilly [1998]
ECR 2793; see in particular paragraph 30). In the exercise of this competence, Member States, however,
have to respect their obligations under the EC Treaty. Member States are not allowed to discriminate on
the basis of nationality or install or maintain discriminations of nationals of other Member States which
exercise their right of free movement, or to apply unjustified restrictions to their freedom of movement.
Member States should also refrain from restricting the free movement of their own citizens. Furthermore,
Member States have to ensure that national measures are compatible with the freedom of establishment
under Article 43 of the EC Treaty and the freedom to provide services under Article 49 of the EC treaty,
including in the context of the posting of workers for the provision of cross-border services.

Community law does not, therefore, prohibit Member States from allocating (cid:1) and modifying (cid:1) their
taxing rights in their bilateral tax treaties with regard to their residents by distinguishing between certain
categories of workers. Therefore, it is the Commission’s opinion that there is no violation of Article 10 of
the EC Treaty. In particular, the fact that, for some categories of frontier workers, such as workers posted
for longer than 183 days and for workers in international road haulage, the tax allocation rules laid down
in the new Netherlands/Belgium double tax Agreement differ from the allocation rules laid down in
Regulation (EEC) No 1408/71 with regard to social security, cannot in itself be considered as being in
breach with the EC Treaty. In addition, apart from this difference, the system chosen by the two Member
States would appear broadly to follow the Resolution from the Parliament on the situation of frontier
workers in the Union (1).

It is the Commission’s understanding that the change in allocation of taxing rights between Belgium and
the Netherlands for frontier workers was based on the fact that paying taxes in one Member State and
paying the social security contributions in the other Member State created uncertainties and difficulties for
this category of persons.

It is not the intention of the Commission to publish a communication about the differences between the
fiscal allocation rules and the allocation rules laid down in Regulation (EEC) No 1408/71.

(1) OJ C 195, 22.6.1998.

(2004/C 51 E/014)

WRITTEN QUESTION E-0014/03

by Christopher Huhne (ELDR) to the Commission

(20 January 2003)

Subject: Economic integration

Further to the Commission’s answer to Written Question No E-3315/02 (1), will the Commission now
1.
provide the figures in answer to the first part of the question, namely the projections in each Stability and

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Convergence programme for each Member State for real GDP, inflation and the budget balance together
with the currently published outturns for each of those variables?

2.
Concerning the answer to the second and third parts of the question, does the Commission now
intend to conduct an ex post study of the projections and the outturns to discover systematic differences?

3.

And if so, when will it be ready?

(1) OJ C 192 E, 14.8.2003, p. 107.

Answer given by Mr Solbes Mira on behalf of the Commission

(19 February 2003)

A copy of tables compiled by the Commission is sent direct to the Honourable Member and the Secretariat
General of the Parliament. These tables present the projections in the Stability or Convergence programme
for each Member State, and the resulting ones for the euro area and the Union as a whole, for real gross
domestic production (GDP), the budget balance and inflation. These tables also include the Autumn 2002
Commission Forecasts, which besides forecasting developments for these variables between 2002 and
2004, also reproduce the published out-turns for 2001. Out-turns for 2002 are not available in many
cases yet. The out-turns for 2002 budget balances will only be available and published in the course of
March 2003, following the regular notification by Member States of figures for the net borrowing
requirement.

The Commission does not intend for the moment to conduct an ex-post study of the differences between
projections and out-turn. However, an overview of the programmes and of their assessment will be
included, as in previous years, in the report ‘Public Finances in the Economic and Monetary Union (EMU)’,
which is scheduled for publication in May 2003.

(2004/C 51 E/015)

WRITTEN QUESTION E-0040/03

by Bert Doorn (PPE-DE) to the Commission

(21 January 2003)

Subject: Temporary defensive mechanism to shipbuilding

Council Regulation (EC) No 1177/2002 (1) of 27 June 2002 concerns a temporary defensive mechanism to
shipbuilding (2). For the purposes of that regulation, the relevant definitions listed in Article 1 of Regulation
(EC) No 1540/98 (3) apply. In addition, the regulation lays down further definitions.

Accordingly, pursuant to Article 3 of Regulation (EC) No 1540/98 no contract-related operating aid to
shipbuilding may be granted in respect of contracts agreed as from 1 January 2001. However, as an
exceptional and temporary measure, and in order to assist Community shipyards in those segments that
have suffered adverse effects in the form of material injury and serious prejudice caused by unfair Korean
competition, a temporary defensive mechanism is authorised for limited market segments and for a short
and limited period only.

Is the European Commission aware that the relevant definitions in Regulation (EC) No 1177/2002 are
worded in such a way that they may be interpreted differently from one Member State to another?

Is it aware that the wording of the regulation may be interpreted as meaning that subsidies may be granted
for lost orders?

What measures does it plan to take to resolve this problem?

(1) OJ L 172, 2.7.2002, p. 1.
(2) This regulation was drawn up in the framework of Council Regulation (EC) No 1540/98 of 29 June 1998

establishing new rules on aid to shipbuilding.

(3) OJ L 202, 18.7.1998, p. 1.