WRITTEN QUESTION E-1640/03 by Erik Meijer (GUE/NGL) to the Commission. Lack of money for maintaining infrastructure and for cofinancing projects in Member States which use tax cuts to gain a competitive advantage.
Date: 2003-05-16
Institutions: European Parliament, Provisional data
Subjects: European social policy, accession to the European Union, corporation tax, fiscal policy, labour law, offshoring, tax on income

C 88 E/360

Official Journal of the European Union

EN

8.4.2004

I have been contacted by a Portuguese national who has opted for an international career with Shell
Accounting Service in Glasgow, and has been living and working in the United Kingdom (Scotland) for
some two years. He maintains that he has been discriminated against on account of his nationality by the
Halifax Bank (a member of the Bank of Scotland group), which has rejected his request for his bank
account to be ‘upgraded’ on the grounds that this is only possible once a person has been resident in the
country for three years. As an EU citizen, does he not have the same rights and duties as a UK national?

Article 12 of the EC Treaty stipulates that ‘within the scope of this Treaty, and without prejudice to any
special provisions contained therein, any discrimination on grounds of nationality shall be prohibited’.
Does the Commission agree that the Halifax Bank’s policy may be considered discriminatory in that it is
contrary to the very essence of the European Union and constitutes a clear violation of the principle of
non-discrimination enshrined in the Treaty?

Answer given by Mr Bolkestein on behalf of the Commission

(13 June 2003)

In principle, a bank has the contractual freedom to enter into contractual agreements with a potential
customer. This applies both to any intended contractual relationship (e.g. opening an account) and to the
conditions under which a corresponding contract is concluded (particularly account maintenance fees,
interest rates, overdraft facilities, etc.).

There is therefore, in principle, no reason to challenge the Halifax Bank’s decision not to grant a customer
better conditions on the grounds that the customer has to have lived in the country for at least three years
in order for his/her bank account to be upgraded. This is not necessarily discrimination on grounds of
nationality. The reasons for rejecting the application could rather be based on specific economic
considerations (risk assessment, account history, volume of deposits and withdrawals, payment record or
other reasons relating to the individual customer). The information provided is not sufficient to allow a
clear legal assessment to be delivered.

(2004/C 88 E/0366)

WRITTEN QUESTION E-1640/03

by Erik Meijer (GUE/NGL) to the Commission

(16 May 2003)

Subject: Lack of money for maintaining infrastructure and for cofinancing projects in Member States which

use tax cuts to gain a competitive advantage

1.
Is the Commission aware of a trend in one or more of the countries due to become new Member
States of the EU in 2004 or 2007 to lower taxes, particularly taxes on high income and company profits?

2.
Is this reduction being made in the expectation that a combination of low taxes and assistance to be
provided from EU funds will deliver a significant competitive advantage favouring the relocation of
companies from the current Member states to the future Member states?

3.
Does this trend go hand in hand with abolition of the minimum wage, abolition of maximum
working hours for employees, removal of protection against dismissal and a reduction in rights in the area
of social security, pensions and reimbursement of medical expenses?

4.

In which of the future new Member States is this trend most pronounced?

5. Which new Member States have chosen not to follow this trend?

8.4.2004

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Official Journal of the European Union

C 88 E/361

Is it already becoming apparent that Member States which lower taxes will

in future not have
6.
sufficient resources to maintain and modernise their infrastructure and to cofinance projects funded partly
with assistance from EU funds, with the result that they will be increasingly dependent on large long-term
loans?

7. What steps is the Commission taking to try to avoid a situation in which Member States,
in
anticipation of the receipt of money from EU funds, create new problems that will have a negative impact
in terms of the level of financial resources required and the possibility of actually being able to use such
money for cofinancing?

Answer given by Mr Verheugen on behalf of the Commission

(27 June 2003)

Concerning the respect of Community policy in general, the Commission points out that the Candidate
Countries made commitments in the Accession Negotiations to modify their legislation and procedures to
bring them into line with all fields of the Community ‘acquis’ by 1 May 2004, except for areas where
transitional arrangements have been granted.
In this context the Commission monitors the state of
implementation of these commitments and informs the Council on a regular basis. A comprehensive
Monitoring Report is in preparation which will be submitted to the Council and the Parliament on
5 November 2003.

On the specific question of tax levels, the lowering of statutory tax rates on corporate and personal income
since the late 1990s is not only a trend in the acceding States but also in the current Member States. In
most cases the lowering of the statutory tax rate is accompanied by a broadening of the taxable base, thus
compensating for a possible loss to the budget. In some situations increasing the rates of the VAT or other
indirect taxes (notably ‘green’ taxes) further compensates the lower tax rates.

Since the early 1970s, there has in fact been a persistent and largely unbroken trend for the ratio of actual
tax revenue to gross domestic product (GDP) to increase across most of the Organisation for Economic
Co-operation and Development (OECD) area. Provisional revenue figures for 2001 now tend to show a
decline in a number of OECD countries (both in current Member States and in some acceding States),
which suggests that this trend may be coming to an end. However, it should be noted that this partly
reflects recent cyclical developments and deteriorating stock market performance.

Concerning the features of social policy referred to in the Honourable Member’s question, it is recalled that
Community labour law is an essential part of the European social ‘acquis’. It includes 15 Directives in
various fields such as information and consultation of employees, working time or protection of workers
with part-time or fixed-term relationships. Most of these Directives establish minimum requirements, i.e.
on working hours, rest periods or annual leave, which have to be transposed by acceding countries and the
Commission thoroughly monitors the process of implementation. The objective of labour law Directives is
not the harmonisation of labour law within the Community. In all Directives there is a balance between
protection of workers rights and flexibility. As regards individual dismissals, minimum wages and collective
rights, there are no comprehensive labour law Directives at European level in these areas. It is up to
Member States, both present and future, to define these issues in line with their own traditions and within
their specific employment context.

Finally, concerning Community funds, the Commission notes that in the course of negotiations with the
Member States, present and future, on the programming documents for the Structural and Cohesion Funds,
the Commission thoroughly examines the respect of Community legislation, e.g. competition rules,
relevant to the implementation of the Funds as well as the soundness and conformity of the administrative
and financial arrangements proposed for adoption by the competent national or regional authorities. After
approval of the programming documents in a Commission Decision, the Commission monitors and
evaluates their implementation.