WRITTEN QUESTION E-0343/03 by Miquel Mayol i Raynal (Verts/ALE) to the Commission. Tax and social charge handicaps in EU internal border areas.
Date: 2003-02-10
Institutions: European Parliament, Provisional data
Subjects: EU law - national law, France, Spain, business tax, competence of the Member States, economic discrimination, fiscal policy, frontier region, social-security contribution, tax harmonisation

C 192 E/172

Official Journal of the European Union

EN

14.8.2003

(cid:1) Given the method employed for calculating cash contributions to the CAP, which the Commission
employed for its Second Cohesion Report, what annual impact does it estimate the current proposals
as having on CAP cash contributions in Portugal?

Answer given by Mr Fischler on behalf of the Commission

(13 March 2003)

As outlined in the explanatory memorandum of the interim review of the Common Agricultural Policy
(CAP), the intention of the proposed reform is to enhance the competitiveness of Community agriculture
and to promote a more market oriented and sustainable agriculture. In general, the proposals imply a shift
from product to producer support. Expenditure on market measures is expected to decrease as indicated in
the financial statement of the proposal and as noted by the Honourable Member. The estimates of
expenditure on market measures have been established at Community level and are based on the one hand
on the medium-term projections of Community market developments (published in December 2002) and
on the other hand on various impact analyses made available in January 2003. The basic modelling of the
impact analyses is designed to give projections at Community level. At this time, no further analyses have
been made in order to estimate the financial impact by Member State, as regards expenditure on market
measures.

The horizontal draft Council Regulation provides for a reduction of direct payments in Article 10 for years
2006 till 2012. A part of the resulting amounts will be reserved for strengthening rural development
under the second pillar of the European Agricultural Guidance and Guarantee Fund (EAGGF) ‘Guarantee’
Section as set out in Article 12(1) of the same Regulation. The amounts to be transferred to rural
development are at the moment estimated at Community level as indicated in the financial statement. The
principles of how these amounts shall be reallocated to the Member States are given in Article 12(2).
Portugal’s share has been calculated at 4,9 %.

As regards the capacity of utilisation of the amounts to be allocated to each Member State for the period
after 2006, it should be remembered that the total envelopes for rural development and their distribution
between Member States will be decided later in the framework of
the new Financial Perspectives.
Therefore, the need for national co-financing to ensure full use of the rural development programs can
only be estimated after the new Financial Perspectives and new Rural Development programs have been
decided upon.

In the context of the preparation of the Third Cohesion Report, the Commission intends to update the
analysis referred to by the Honourable Member. Nevertheless,
it is already possible to assert that the
present Common Agricultural Policy reform proposal will strengthen the contribution of CAP to economic
and social cohesion and a positive impact could be expected for Portugal.

(2003/C 192 E/210)

WRITTEN QUESTION E-0343/03

by Miquel Mayol i Raynal (Verts/ALE) to the Commission

(10 February 2003)

Subject: Tax and social charge handicaps in EU internal border areas

According to a study conducted by Mr Hervé Germa, a tax lawyer in Perpignan (France) and Figueras
(Spain), the differences between the social security and taxation systems of the two countries are so great
that they represent a form of unfair competition.

These differences mainly relate to social security contributions and business tax. Social
security
contributions, for example, represent 48 % of a worker’s gross salary in France but only 30,6 % in Spain.
The business tax payable by a company with fewer than ten workers is around EUR 1 200 in France but
only EUR 400 to 500 in Spain.

14.8.2003

EN

Official Journal of the European Union

C 192 E/173

These differences do not affect areas removed from borders between Member States, but they are having a
particular impact on Roussillon, a region with a very frail economy.

What measures will the Commission take to compensate, if possible, for the economic handicap brought
about by these circumstances?

Answer given by Mr Bolkestein on behalf of the Commission

(18 March 2003)

Under current Community law, direct taxation still falls essentially within the competence of Member
States. From past experience, the Commission knows that difficulties may arise in crossborder situations
because of differences in the existing tax systems of different Member States. There may be problems, for
example, of discrimination and obstacles to the exercise of the four freedoms.

Provided that Member States respect the EC Treaty provisions, they are free to choose the tax systems that
they consider appropriate and according to their preferences. Tax levels have links to the level of public
expenditure which is equally a matter for national preferences as long as this is adequately met by
revenues in such a way that budget positions remain close to balance or in surplus. Nevertheless, in its
Communication on tax policy in the Union (cid:1) Priorities for the years ahead (1), the Commission suggested
that better co-ordination of tax systems might be necessary in order to prevent discrimination in cross-
border situations or to remove obstacles to the exercise of the four freedoms.

As regards social security in general, Community law does not detract from the power of Member States to
organise their social security systems. In the absence of harmonisation at Community level, it is therefore
for the legislation of each Member State to determine the level of social security contributions but the
Member State must comply with Community law when exercising that power. In addition, it should be
borne in mind that such contributions are only one element of total labour costs and that what matters
from the point of view of competition are labour costs in relation to productivity (‘unit labour cost’).
including the level of skills and the quality of public
Productivity depends on a number of factors,
infrastructure.

Since the situation described by the Honourable Member does not appear to represent a breach of
Community law, the Commission has no reason to take any particular measures.

(1) COM(2001) 260 final.

(2003/C 192 E/211)

WRITTEN QUESTION P-0347/03

by Christos Folias (PPE-DE) to the Commission

(6 February 2003)

Subject: Attica Highway

The Attica Highway, a project co-funded by the European Union, is a major project which will ease the
traffic problems facing Athens and, above all, facilitate access to and from the City’s ‘Eleftherios Venizelos’
international airport.

When was the relevant contract signed and ratified?

What was the original budget for this project, what was the funding plan, what is the level of participation
of the bodies involved in funding the project, how much has each one contributed separately so far and
how much are they due to contribute until the project is completed?

What overshoots of the original budget have occurred so far (in total and by sector), why did these
overshoots occur and who bears the costs?