03 June 2002

Bolkestein speech before EMAC on forthcoming FSAP issues

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Commissioner Bolkestein came before the Economic and Monetary Affairs Committee to update MEPs on several dossiers to be discussed by Finance Ministers meeting in Luxembourg and was upbeat about progress made in the area of financial services. Council had reached common positions on proposals relating to Financial Collateral and Market Abuse and he expected Finance Ministers to confirm the agreement on International Accounting Standards.

Furthermore, in talks with the US authorities, he said that there was now recognition by the US authorities that the US GAAP standards were no longer sufficient to deal with an ENRON-style situation. The US recognised the need to work closely with the EU towards mutually acceptable arrangements that would allow European companies conforming to the International Standards to be quoted on the US stock exchange.

Bolkestein stated that there were difficulties with the Prospectuses Directive for investors and, referring to Parliament's amendments designed to exempt small firms from too onerous a regulatory burden, said he could not agree to any proposal 'that would exempt some 75% of all listed companies from the proposal'.

He also welcomed the Political Agreement on the Pension Funds Directive, also expected to be confirmed by Finance Ministers, which he said, would save a company such as BP up to ¢ím a year. Furthermore, there should be a further boost to company employees with an expected Court of Justice ruling that tax relief on contributions to a fund run in another Member State would be applicable.

As to the details likely to be agreed, these would provide for a limit on the fund regarding investments in another EU country of 5% in shares in a single company, a 30% limit on investments in assets not regulated by the market and a further 30% limit on assets denominated in a currency outside the euro-zone.

Turning to Taxation of Savings, Bolkestein said attention would now focus on discussions with Switzerland and the United States. He expected to start formal negotiations with Switzerland on 18 June 2002, while as far as the USA was concerned, he said the issue had already been raised with US treasury officials. The US government, he said, was committed to 'fighting tax evasion' and a bill concerning the exchange of information relating to bank accounts was now on the table. But as this did not yet meet EU requirements, further discussions would be needed.

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