Conclusies Ecofin: Parmalat, boekhoud-normen, BTW en tabaksaccijnzen (en)

Parmalat affair potential impact on EU policies

Internal Market Commissioner Frits Bolkestein briefed Ministers over lunch on the potential impact of the Parmalat affair on EU policies.

Speaking after the Council, Mr Bolkestein stated: "It is useful to recall that immediately the Enron affair came to light, the Commission stated that Europe should not be complacent and that scandals of a similar scale could also occur in Europe. But now that a case of similar magnitude or worse has unfortunately occurred in Europe, the Commission's view remains that hasty and ill-considered legislation could add to rather than solve regulatory problems highlighted by high-profile cases such as Enron and Parmalat."

"Fortunately, the Commission already set in motion in May 2003 action plans to improve both auditing and corporate governance in Europe. We are therefore able to take account of possible lessons to be learned from what may have gone wrong in the Parmalat case to adjust and improve the initiatives on auditing and corporate governance that were already in motion."

"On rules for statutory auditors, the Commission is finalising its proposals to revise the 8th Company Law Directive. The proposal, due to be presented in March, will amongst other things:

• tighten the oversight of auditors at the level of Member States

• introduce the principle that the group auditor is fully responsible for the audit report in relation with the consolidated accounts of a group of companies

• establish rules on audit quality assurance

• specify rules on independence of auditors and on ethics

• impose the use of high quality auditing standards for all statutory audits

• seek to ensure that there are independent audit committees in all listed companies

• strengthen sanctions for malpractice and

• enhance cooperation of oversight bodies at European level and with third country regulators."

"This last point is essential to prevent - and detect and sanction where they nonetheless occur - multi-faceted fraudulent operations covering several jurisdictions, a key feature of the Parmelat case."

"On corporate governance issues, the Parmalat case highlights certain aspects as particularly urgent. Work needs to be accelerated on requiring all Directors to be collectively responsible for company accounts; and on ensuring complete information and disclosure with regard to a group's structure and intra-group relations.

"Finally, I stressed to Ministers that in the light of the Parmalat case, it was even more important that Member States ensure the swift and complete implementation of new rules under the Market Abuse Directive (due to be implemented in October 2004), and subsequently under the Prospectus Directive (due to be implemented mid-2005) and the forthcoming Transparency Directive."

Regulation of banking, insurance and investment funds

Ministers agreed on locations for the Committee of European Securities Regulators (CESR) will be established in Paris, the Committee of European Banking Supervisors (CEBS) in London and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in Frankfurt. These Committees form part of a modern and streamlined decision-making structure for financial services with the aim of improved regulatory and supervisory co-operation. They are composed of national supervisory authorities and not only give technical advice to the Commission on implementing measures but also aims to ensure the consistent implementation of EU financial servics law in the Member States (see IP/03/1507).

International Accounting Standards

Commissioner Bolkestein briefed the Council on the difficult discussions underway with the International Accounting Standards Board on International Accounting Standards IAS 32 and 39 (the financial instruments standards). The Council welcomed the efforts made by Commissioner Bolkestein on this important issue and invited him to pursue his work.

VAT reduced rates

At the request of France, the Council briefly went back over the question of the reduced VAT rates, which had been considerably discussed during previous meetings. The debate focused on the way the issue could be treated during the Irish Presidency, as well as on the questions of the need to avoid distortions to the internal market and the possibility of applying the principle of subsidiarity to reduced VAT rates.

The Presidency concluded that, following informal contacts with delegations, the item would be discussed again at one of the next Council of Finance Ministers' meetings.

Commissioner Bolkestein indicated to Ministers that the Commission considers its July 2003 proposals to represent a balanced approach that took into account the various interests of all Member States. He also stated that basing reduced rates of VAT on the principle of subsidiarity was not a panacea and could even make it more difficult to reach agreement. He nevertheless indicated that the Commission was willing to study the issue further.

Tobacco Taxation

At the request of France, the Council debated the question of tobacco taxation, in particular its links with smuggling, fraud, and cross-border consumption. Commissioner Bolkestein, while recalling that in 2002 the Council had already decided to increase the minimum level of tobacco taxation (see IP/02/233), announced that a Commission report on this issue would be forwarded to the Council in 2006, probably accompanied with a corresponding proposal.