WRITTEN QUESTION E-1867/03 by Christopher Huhne (ELDR) to the Commission. Average cost of capital in the euro area.
Date: 2003-06-06
Institutions: European Parliament, Provisional data
Subjects: Eurobond, Euromarket, capital market, cost analysis, cost of capital, euro area, type of business

27.3.2004

EN

Official Journal of the European Union

C 78 E/51

Answer given by Mrs Wallström on behalf of the Commission

(6 August 2003)

The Commission’s Communication on alternative fuels for road transportation and on a set of measures to
promote the use of biofuels (1), the proposal for a Parliament and Council Directive on the promotion of
the use of biofuels (2) and proposal for a Council Directive on a reduced rate of excise duty on certain
mineral oils containing biofuels and on biofuels (2) is being finalised by the institutions and provides for the
introduction of biofuels into the Community market.

Regarding diesel particulate filters, many test programmes have shown the benefits of using a diesel
particulate filter on heavy-duty vehicles and buses for reducing not only the overall mass emission of
particulate but also the very much smaller nano-particulate which are suspected of having a causal effect
on human health.

The emission standards due to take effect for new heavy-duty vehicles in 2005 and a further stage of
standards in 2008 through Directive 1999/96/EC (3) (the so-called Euro 4 and Euro 5 standards) will
require manufacturers to consider using diesel particulate filters to meet the emission standards. The
standards set performance targets that can be met by an appropriately durable technology. The diesel
particulate filter may not be the best technical solution for long distance trucks but for buses and other
vehicles operating in urban areas, the diesel particulate filter has a lot of merit. The Commission is now
considering the Euro 6 emission standards and this will focus not only on further reductions in particulate
mass (the measurement unit of today) but also on the reduction of emission of nano-particulate. New
measurement procedures for nano-particulate are being finalised with this objective in mind.

Article 3 of Directive 1999/96/EC provides the mechanism for Member States to grant fiscal incentives to
vehicles that meet future emission standards in advance of the date of their mandatory application.
Therefore, Community measures are in place to encourage the use of diesel particulate filters in the
Member States.

As far as passenger cars are concerned, in September 2002, the Commission submitted a Communication
on the taxation of cars in the Union (4). In the Communication, the Commission proposed, inter alia, to
relate vehicle taxation more directly to Carbon dioxide (CO2) emissions. It also mentions the possibility of
add-on elements to tackle other environmental objectives, e.g. those that concern air pollution such as
particulates. The proposal is currently being discussed in the Institutions.

The same issue regarding nano-particulates applies to the next stage of Euro 5 emission limits for
passenger cars which the Commission is also now considering.

(1) COM(2001) 547 final.
(2) OJ C 103 E, 30.4.2002.
(3) Directive 1999/96/EC of the Parliament and of the Council of 13 December 1999 on the approximation of the
laws of the member States relating to measures to be taken against the emission of gaseous and particulate
pollutants from compression ignition engines for use in vehicles, and the emission of gaseous pollutants from
positive ignition engines fuelled with natural gas or liquefied petroleum gas for use in vehicles and amending
Council Directive 88/77/EEC, OJ L 44, 16.2.2000.

(4) COM(2002) 431 final.

(2004/C 78 E/0049)

WRITTEN QUESTION E-1867/03

by Christopher Huhne (ELDR) to the Commission

Subject: Average cost of capital in the euro area

(6 June 2003)

Will the Commission please estimate whether there has been a reduction in the average cost of capital in
real terms to euro-zone enterprises as a result of the introduction of the euro and the consequent growth
of the euro-denominated corporate bond market?

C 78 E/52

Official Journal of the European Union

EN

27.3.2004

Answer given by Mr Solbes Mira on behalf of the Commission

(8 July 2003)

While the Commission has monitored developments in the euro-denominated corporate bond market
since 1999, the impact of these developments on the average cost of capital to euro-area enterprises has
not been estimated directly. The cost of capital is the result of a range of interacting factors, both cyclical
and structural, so that it is difficult to isolate the individual impact of increased access to direct debt
financing in euro. Nevertheless, the availability of a larger and more liquid euro-denominated corporate
bond market has widened the financing opportunities for euro-area enterprises and evidence suggests that
this has resulted in lower financing costs. A recent study undertaken on behalf of the Commission (1)
estimates that the rapid growth in the stock of euro-denominated corporate bonds since 1999 has reduced
the corporate credit spread over the government benchmark by about 90 basis points and that (cid:1)
if integration and growth in the market were to continue at a similar pace (cid:1) a further reduction of 40
basis points in corporate financing costs would be possible. The study also concludes that gross debt
issuance costs in the euro area have already fallen significantly toward a level broadly in line with the
United States. With regard to trading costs,
for euro-
denominated corporate debt is still very much in its infancy but that as the primary market grows and
new, more transparent and liquid trading platforms develop, these costs are likely to fall in the future.
More generally, an efficient corporate bond market (cid:1) in providing an attractive alternative source of
financing (cid:1) can be expected to stimulate efficiency improvements in the equity market and the banking
sector also.

the secondary market

the study notes that

(1) See Chapter 4 of the Final Report on ‘Quantification of the Macro-Economic Impact of Integration of EU Financial
Markets’ to the European Commission (cid:1) Directorate-General for the Internal Market, by London Economics in
association with PricewaterhouseCoopers and Oxford Economic Forecasting, November 2002, available at: http://
europa.eu.int/comm/internal_market/en/finances/mobil/overview.htm.

(2004/C 78 E/0050)

WRITTEN QUESTION E-1868/03

by Christopher Huhne (ELDR) to the Commission

(6 June 2003)

Subject: Equity culture

Will the Commission give the figures for the number of quoted companies in each Member State in each
year for the last ten years? Will it also estimate the market capitalisation at the end of each year as a
percentage of GDP? Will it further give the aggregate for the euro-area?

Answer given by Mr Bolkestein on behalf of the Commission

(17 July 2003)

The degree of detailed information may vary from country to country and may also vary from statistical
sources on the stock markets. Sometimes, problems that can arise with provided data series where
presence of gaps simply means a lack of data.

The sources of information used: World Federation of Exchanges, FESE, national institutions, Eurostat.
When the data of the international organisations differ or are incomplete Eurostat turns to the data of the
national institutions.

In order to increase the comparability level of the statistical information presented with other sources,
a definition of the market capitalisation and of the number of listed companies are given below:

(cid:1) The number of companies which have shares listed on a specific exchange, split into domestic and
foreign, and excluding investment funds, unit trusts is sent direct to the Honourable Member and to
Parliament’s Secretariat. A company with several classes of shares is counted just once.