11-12 September: Ecofin informal

Date: 16/09/1999

FINANCE ministers ended their meeting with a deal on the list of services eligible for reduced rates of value added tax under a planned new scheme to boost job creation. Member states will soon be able to apply the lower rate to services in two categories from a list of five: small repair services, renovating and repairing homes, window cleaning and cleaning private houses, domestic care services and hairdressing.

IN DISCUSSIONS on how long national currencies and the new euro notes and coins should circulate alongside each other after the latter are launched on 1 January 2000, ministers agreed to try to shorten the transition period from the six months originally laid down to just two.

BRITISH Finance Minister Gordon Brown finally unveiled his long-promised report on how and why the UK's eurobond market should be exempted from proposals for a new EU-wide withholding tax on savings. Brown insisted that the UK could not accept a directive which would damage the interests of the City of London and the eurobond markets. “I have made it clear that I would not back down on these issues,” he added.

BROWN'S proposals were, however, criticised by a number of ministers including Germany's Hans Eichel, who said that they were unfair to small investors. The reaction to the British plan has further dented hopes of agreement on the proposal by the end of this year. Finland's Sauli Niinistä admitted this would be difficult to achieve, but insisted that ministers were committed to striking a deal in time for December's Helsinki summit.

MINISTERS ended months of confusion by agreeing on a plan for euro-zone representation at international meetings. The deal means that the president of the European Central Bank and the finance minister of the country chairing Euro-11 meetings will speak on behalf of the single-currency area on the world stage.