WRITTEN QUESTION E-0854/03 by Christopher Huhne (ELDR) to the Commission. Prudential supervision.
Date: 2003-03-20
Institutions: European Parliament, Provisional data
Subjects: United Kingdom, insurance company, legal action, management audit

13.3.2004

EN

Official Journal of the European Union

C 65 E/49

Independently of the fact that the reason adduced by the Commission is completely unfounded, since the
two initiatives have totally different objectives, and indeed could be said to be in opposition to each other,
can the Commission explain why the decision to be taken by the Fifteen on the reform is being
pre-empted by cutting the budget for Regulation EC 2826/2000 now, in 2003? The reasons advance
reasons adduced by the Commission service claim that the cutback is due to the poor quality of many of
the projects submitted for 2002. Does the Commission believe that this is the most appropriate way of
motivating and educating those concerned?

(1) OJ L 328, 23.12.2000, p. 2.

Answer given by Mr Fischler on behalf of the Commission

(15 April 2003)

It is right that the first series of promotion and information programmes for agricultural products under
Council Regulation (EC) No 2826/2000 of 19 December 2000 on information and promotion actions for
agricultural products on the internal market, were decided in August 2002. That is also the reason why
budget credits for Community internal market promotion measures amounting to EUR 50,3 million were
utilised only up to EUR 15 448 million (Budget year 2002). For 2003, Budget credits are foreseen for
EUR 46,5 million (Budget lines B1-3800 and B1-3810) and the preview of utilisation shows better results
for this year.

The Commission can confirm that one of the reasons for the low consumption of budget credits is due to
the quality of the submitted promotion proposals. Out of 120 proposals received, only 40 proposals, from
professional organisations from 14 Member States, could be accepted as conform to the discipline of the
Regulation and the guidelines for promotion programmes.

Concerning the replacement of Regulation (EC) No 2826/2000 by a new measure under the Rural
Development Proposal within the Common agricultural policy (CAP) Reform proposal,
is worth
mentioning, that following the actual state of the debate of this proposal in the Parliament and in the
Council, the Commission is analysing the possibility of coexistence of both regimes, taking care to exclude
any overlapping.

it

(2004/C 65 E/048)

WRITTEN QUESTION E-0854/03

by Christopher Huhne (ELDR) to the Commission

(20 March 2003)

Subject: Prudential supervision

Is the Commission satisfied that the current arrangements for the prudential supervision of Lloyd’s

1.
insurance market are compliant with EU directives?

2.
Is the Commission satisfied that the arrangements over the last 20 years for the United Kingdom’s
prudential supervision of the Lloyd’s insurance market have been compliant with EU directives at all
stages?

3.

If not, would the UK Government bear some responsibility to investors in that market?

4. What avenues of redress might they have under EU law?

C 65 E/50

Official Journal of the European Union

EN

13.3.2004

Answer given by Mr Bolkestein on behalf of the Commission

(2 May 2003)

The Commission has been carefully examining the compatibility of the framework for the regulation
1.
and supervision of the Lloyd’s insurance market and has issued two press releases in connection with its
enquiries (1). The Commission has not yet completed its enquiries and is now examining the response of
the United Kingdom authorities to the supplementary letter of formal notice sent in January 2003.

2.
The objective of infringement proceedings under Community law is to establish or to restore the
compatibility of national law with Community law. The task of the Commission is now, therefore, to
examine the compatibility of the new regulatory and supervisory regime established for Lloyd’s under the
Financial Services and Markets Act 2000, not to rule on the compatibility or incompatibility of the
previous regime. Furthermore, the general case law of the European Court of Justice confirms that
infringement procedures under Article 226 of the EC Treaty aim solely to put an end to the failure to
comply with the Community law by a Member State, and not to record in abstracto that a failure existed
in the past.

According to the rule established by the Court of Justice in the Francovich case law (2), in the
3 and 4.
absence of Community legislation concerning reparation, it is for the internal legal order of each Member
State to designate the competent courts and lay down the detailed procedural rules for legal proceedings
intended fully to safeguard the rights which individuals derive from Community law. Three conditions
have to be met: the result prescribed by the Directive should entail the grant of rights to individuals;
it should be possible to identify the content of those rights on the basis of the provisions of the Directive;
and there should be a casual link between the breach (cid:1) which must be sufficiently serious (3) (cid:1) of the
State’s obligation and the loss and damage suffered by the injured parties. The notion of a sufficiently
serious breach is to be determined, together with all the other remaining conditions of the Francovich test,
solely by the national court deciding on the issue of damages.

(1) Commission Press Releases IP/01/1880 and IP/03/97.
(2) See judgement of the Court of 19 December 1991, Francovich and Bonifaci,

joined cases C-6/90 and C-9/90,

ECR(1991) p. I-5357.

(3) See judgement of the Court of 5 March 1996, Brasserie du Pêcheur and The Queen v. Secretary of State for

transport, ex parte: Factortame Ltd and others, joined cases C-46/93 and C-48/93, ECR(1996) p. I-1029.

(2004/C 65 E/049)

WRITTEN QUESTION E-0876/03

by Ioannis Marínos (PPE-DE) to the Commission

(21 March 2003)

Subject: Rise in interest rates on loans in Greece

Rumours of a general increase of 2 % on variable interest rates on loans have given rise to deep concern in
Greece. The Greek press reports that this situation is the exact opposite of what is happening in the other
countries in the euro zone (where falling interest rates is the trend) and that whereas the banks in Greece
offer between 1 % and 2 % interest on deposits, their lending rate for credit-card holders is 16 %, giving
Greece the highest interest-rate spread in the euro zone. The rise in interest rates on loans has caused
despair among consumers who have borrowed to buy a home, believing the government’s assurances that
‘interest rates will continue to fall’, something to which the New Democracy has drawn particular attention
as well as highlighting the lack of real competition between banks in Greece. As New Democracy’s
Coordinator of Economic Affairs, Mr Alogoskoufis, has pointed out ‘in the Greek banking system, over half
the governors of banks are appointed by the government’. The concern in Greece is that the economy will
lead to a general rise in interest rates having a palpable impact on consumers and the pace of economic
development. In a public statement on the matter, the Association of Consumers and Borrowers of Greece
stated that, according to figures released by the European Central Bank (ECB), average interest rates on
consumer credit in Greece are three percentage points higher than in the other countries in the euro zone.
The Governor of the Bank of Greece, Mr Garganas, has pointed out that the recently adopted law on
additional
interest rate charges contains numerous ambiguities and the banks are therefore failing to
implement it.