05 June 2007

ECOFIN meeting

Main results of the Council

The Council adopted decisions closing the excessive deficit procedures it opened in 2003 and 2004 with regard to Germany, Greece and Malta, after they succeeded in reducing their government deficits below the 3% of gross domestic product (GDP) maximum threshold set by the EU's stability and growth pact.

After the recent abrogation of the decision on France, only seven excessive procedures now remain in force, concerning the Czech Republic, Italy, Hungary, Poland, Portugal, Slovakia and the United Kingdom. To some extent, the improvement is due to the improvement in the economy. At the same time, however, the 2005 reform of the EU's stability and growth pact has encouraged member states to consolidate their budgets during the good times.

The Council adopted conclusions on tax fraud, and on a package of measures aimed at simplifying VAT arrangements for businesses. As regards tax fraud, it called on the Commission to come forward with legislative proposals to improve the efficiency of a wide range of conventional antifraud measures, and to explore more far reaching anti-fraud measures including taxation in the member state of departure, and including an analysis of the effects of an optional reverse-charge system – where liability for tax payments would be shifted from the supplying to the recipient company – as a possible means of combating VAT fraud.

The Council also assessed progress made by Cyprus and Malta in fulfilment of convergence criteria with a view to allowing them to adopt the euro as their currency on 1 January 2008. Proposals to this effect will be referred to heads of state/government for discussion at a Council meeting in the margins of the European Council on 21 and 22 June.

Council press release: main results
Agenda
Background note

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