Multimedia Mania/abacus-multimedia-mania.iso/dp/0052/00526.txt

Text File | 1993-07-27 | 34KB | 601 lines

$Unique_ID{bob00526}
$Pretitle{}
$Title{United Kingdom
The British Parliament and the Community}
$Subtitle{}
$Author{Embassy of the United Kingdom, Washington DC}
$Affiliation{Embassy of the United Kingdom, Washington DC}
$Subject{community
member
european
states
market
britain
council
government
agreed
state}
$Date{1990}
$Log{}
Title:       United Kingdom
Book:        Britain in the European Community
Author:      Embassy of the United Kingdom, Washington DC
Affiliation: Embassy of the United Kingdom, Washington DC
Date:        1990

The British Parliament and the Community

     Ministers representing Britain at the Council of Ministers are
accountable to Parliament, which is kept informed about the Community and its
policies by select committees; by a six-monthly government White Paper on
developments in the Community, which is debated; and by the normal
parliamentary question procedure.

Parliamentary Committees

     Both Houses of Parliament have established committees to examine
proposals for Community legislation and other Community documents. The two
committees receive automatically, via the Foreign and Commonwealth Office,
draft Commission proposals for legislation which have been submitted to the
Council of Ministers. The British government department concerned also
provides an explanatory memorandum describing the subject matter and its
implications for Britain.

     The House of Commons Scrutiny Committee helps Members of Parliament to
identify important proposals which might affect matters of principle or policy
or involve changes in British law. Government ministers and civil servants may
be invited to give evidence to the Committee, and a senior official of the
House assists it in dealing with the legal implications of proposals. Further
legal advice may be given, where necessary, by the Government's Law Officers.
If the Committee recommends that a proposal should be debated by the House,
the Government finds time for the debate.

     The terms of reference of the House of Lords Select Committee are
drawn more widely, for it can identify Community proposals of legal or
political importance and report on their merits. The proposals are remitted
as necessary to one of several specialist subcommittees which may call for
oral or written evidence from the Government and appropriate outside bodies.
The legal implications of Community proposals are examined by a subcommittee
chaired by a Law Lord. Reports are made to the House, some of which recommend
debate; as in the Commons, time is found for this.

Other Means of Information

     Every month when Parliament is sitting a report is made by the
responsible minister in the Foreign and Commonwealth office listing all the
Council meetings due to be held in the coming month and the subjects expected
to be discussed at each meeting. After each Council meeting the minister who
attended it is expected to report to the House of Commons on the discussions
that took place. After meetings of the European Council the Prime Minister
reports to the House and is questioned.

     Every six months the Government publishes a White Paper summarising
developments in the Community and giving an indication of the Government's
general approach and policy on specific issues. After its publication the
House of Commons holds a wide-ranging debate on Community issues. Members
of both Houses may table questions on any Community topic for written or oral
answer by the appropriate minister.

Finance

     The Community is financed from revenue contributed by member states,
known as `own resources'. These consist of levies collected on trade in
agricultural products between the Community and the rest of the world; customs
duties on imports into the Community; value added tax (VAT) levied at a rate
of up to 1.4 per cent on a notional harmonised base; and a share of the
Community's gross national product (GNP) up to an amount required to balance
the budget within an own-resources ceiling of 1.2 per cent of GNP (see below).
About 60 per cent of the budget is devoted to agriculture, the bulk of the
rest going to social and regional policy, science and research, and aid to
developing countries.

     The Community budget is denominated in European Currency Units (ECUs).
The ECU is a weighted average of Community currencies, the value of which is
calculated on a daily basis against all major world currencies.

Britain's Contribution

     Because of an imbalance between Community policies, a problem arose in
the late 1970s over the level of Britain's net contribution. By the end of the
1970s it had become clear that this contribution was becoming excessive in
relation to its share of Community GNP. Accordingly, Britain sought a
correction; following negotiations, refunds were given to Britain for each of
the years in the period from 1980 to 1983.

     At the European Council meeting at Fontainebleau in June 1984 the
Community agreed on a more permanent arrangement under which Britain received
an ad hoc lump sum abatement in respect of 1984 and, for later years, an
annual abatement of 66 per cent of the difference - in the previous
year - between Britain's share of the Community's VAT revenues and its share
of the Community's allocated budget. The Community's VAT ceiling was raised
from 1 per cent to 1.4 per cent in January 1986, partly to meet increased
expenditure. By the end of 1989, the cumulative value of abatements agreed at
Fontainebleau totalled some 5,759 million Pounds.

Further Budgetary Reforms

     Britain has been a staunch supporter of attempts to control Community
expenditure. In December 1984 the Council of Ministers agreed to a system of
budgetary discipline designed to ensure that expenditure on agricultural
support rose at a rate lower than the rate of increase in the Community's own
resources base. Member states also agreed to respect the maximum rate
provisions in the Treaty of Rome, designed to restrict the growth of other
types of spending.

     It soon became clear that even more effective measures were needed to
curb spending. In February 1988 the European Council agreed a number of
measures to restrain the costs of the Community's agricultural policy (see p
24). These include a set of limits on six categories of expenditure for the
period between 1988 and 1992. The Council accepted that commitments to the
Community's structural funds (see p 22) should rise by about 900 million
Pounds (in constant 1988 prices) a year from 1989 to 1992, which would permit
the doubling by 1993 of the resources channelled to less-developed regions
within the Community. It was also agreed that the ceiling on own resources
should be expressed in terms of Community GNP rather than VAT. The Community's
overall own-resources ceiling for the 12 member states is 1.2 per cent of
Community GNP, an increase of about 25 per cent over the previous figure. This
ceiling is to remain in force until at least 1992; within it there are
sub-ceilings rising from 1.15 per cent of GNP in 1988 to 1.2 per cent in 1992.
The cost of Britain's abatement to other member states is outside the ceiling.

Adoption of the Annual Budget

     The Commission is responsible for drawing up a preliminary draft budget
based on its own estimates and those submitted by the other Community
institutions, and presents it to the Council of Ministers and the European
Parliament, usually in June. The Council then approves a draft budget. The
Parliament scrutinises the draft and can propose modifications to `compulsory'
expenditure (which accounts for about 70 per cent of the budget) and
amendments to `non-compulsory' items. Compulsory expenditure consists of
expenditure on policies arising directly out of the Treaties, principally the
Common Agricultural Policy, and includes expenditure arising from
international agreements, for example some kinds of development assistance.
The non-compulsory part covers other policies adopted by the Community, as
well as administration.

     The Council examines the Parliament's amendments. If it rejects
modifications to compulsory expenditure, the Parliament has no right to insist
on their adoption. If the Council rejects amendments to non-compulsory items,
the Parliament can still insist upon amendments, within certain limits. There
is provision for consultation between the two bodies to reconcile differences.
The Parliament's President is responsible for declaring the final adoption
of the budget.

     The Parliament has power to reject the budget as a whole if consultations
with the Council are unsuccessful. It has done so twice, in 1979 and 1984. If
the budget has not been approved by the beginning of the financial year, the
Treaty of Rome provides for expenditure to be limited each month to
one-twelfth of the appropriations for the previous year or one-twelfth of the
draft budget, whichever is the lower. This system continues until a new budget
is agreed.

The European Monetary System

     In July 1978 the European Council decided to create a European Monetary
System (EMS), which came into effect in March 1979. Its purpose is to
stabilise exchange rates between currencies, and it consists of an exchange
rate mechanism (ERM), a monetary unit known as the ECU (see p 10) and
increased credit facilities. Each currency participating in the ERM has a
central rate fixed in ECUs, which are used to establish bilateral exchange
rates with the other currencies. The monetary authority of each member state
intervenes in the exchange markets to ensure that its currency does not
fluctuate by more than 2.25 per cent (6 per cent in the case of Spain) against
any other currency. If necessary, member states adjust economic policies
and/or intervene in order to reduce tensions within the ERM.

     All member states participating in the EMS deposit 20 per cent of their
gold and dollar reserves with the European Monetary Co-operation Fund in
return for ECUs of the same value. These ECUs may then be used to settle
obligations arising from intervention in exchange markets between the central
banks concerned.

     Britain is a member of the EMS, and has deposited 20 per cent of its gold
and dollar reserves with the European Monetary Co-operation Fund, but it does
not yet take part in the ERM. The Government has stated that Britain will join
the ERM when certain specific conditions are met.

     In June 1989 the European Council approved the first stage of a
three-stage plan for Economic and Monetary Union (EMU), drawn up by a
committee of governors of central banks chaired by the President of the
European Commission. This includes the strengthening of economic and monetary
policy co-ordination, the completion of the single market, the strengthening
of competition policy and all member states joining the ERM on equal terms.
Further stages of the plan remain under discussion, as are a number of
alternative proposals for achieving the progressive realisation of EMU.

     An intergovernmental conference will begin on 13 December 1990 in order
to consider Treaty changes regarding EMU. As part of the preparation for this
conference, Britain has suggested the creation of a European Monetary Fund
(EMF) to manage the ERM, to co-ordinate exchange rate intervention with
external currencies and to promote the use of the ECU. Britain believes
that such a fund could encourage more use of the ECU by issuing ECU bank
notes for general circulation alongside member states' currencies and backed
by EMF holdings of various Community currencies. In time the ECU would be more
widely used and become a common European currency. In the longer term, if
peoples and governments so chose, it could develop into a single currency.

The Single European Market

     The programme for completion of the single market-the free movement of
goods, people, services and capital-is derived from the European Commission's
White Paper submitted to the European Council at Milan in June 1985. This
document outlined a programme to remove the remaining obstacles and
distortions in trade between member states by the end of 1992, and the Council
has used it as a basis for single market proposals.

     About 60 per cent of the single market programme outlined in the White
Paper has been achieved. By the end of 1989, Britain had implemented in its
national legislation all but four of the internal market directives agreed by
the Community. The Government is firmly committed to the completion of the
single market. The Community is Britain's largest export market, with half of
all British exports going there. The Government believes that the single
market will benefit the economy of every country in the Community by reducing
business costs, stimulating efficiency and encouraging the creation of wealth
and jobs. In its view, consumers of goods and services will gain from
increased competition that will lead to greater choice and lower prices.

Movement of Goods

     The first ten member states have eliminated duties on internal trade in
manufactured goods and most agricultural products, and these will be abolished
throughout the Community in 1992 when the transition period following the
accession of Spain and Portugal ends. The common customs tariff, which applies
to goods from non-member states, will also be extended to these two countries.
Customs duties have already been abolished on most industrial products traded
between the Community and members of the European Free Trade Association.

Technical Barriers to Trade

     All member states have their own laws and standards for the packaging,
labelling and safety of goods sold in their home market. Such differing
requirements and procedures can result in technical barriers to trade. For
many years the Community sought to remove such barriers by adopting directives
setting out the desired requirements that products had to satisfy before they
could be sold freely throughout the Community. This proved a slow process
because of the detailed nature of these matters.

     In May 1985 the Council of Ministers agreed upon a new approach whereby
directives are limited to setting essential requirements for health, safety,
consumer protection and the environment, leaving the technical details to be
worked out subsequently by the European Committee for Standardisation and the
European Committee for Electrotechnical Standardisation. The Community is also
seeking to encourage the mutual recognition of test results and certificates,
and the establishment of a European organisation for testing and certification
is currently under consideration.

     Since 1983 arrangements have been in force requiring member states to
notify the Commission in advance of proposals for new technical regulations,
giving the Commission and other member states the opportunity to intervene if
they believe that the regulation would act as a new barrier to trade. This
directive was extended in January 1989 to cover areas previously excluded,
such as agricultural products, foodstuffs, pharmaceuticals and cosmetics.

     The British Government is giving strong support to the Community's
attempts to ensure that standards are used to promote competitiveness. At the
same time it wants to ensure that standards, once harmonised, can be adapted
quickly to reflect later technical progress. This is particularly important
in, for example, the case of vehicles, where new research can often indicate
substantial scope for reducing road casualties through better construction
standards for new vehicles.

Physical Barriers to Trade

     Another obstacle to trade within the Community is controls on the
physical movement of goods across frontiers between member states. This
problem has been tackled in a number of ways, building on the elimination of
customs duties between Community members which was one of the foundations of
the common market.

     Britain has strongly supported the Community's moves to reduce customs
formalities in order to speed the flow of goods and reduce administrative
costs. In January 1988 the Community and the members of the European Free
Trade Association introduced the Single Administrative Document, a common form
for imports and exports which replaces some 100 different national forms.
Simplified procedures are now followed at inland clearance depots, thereby
reducing delays at frontiers. Discussions are also taking place on how best to
tackle the complex question of fiscal frontiers in the Community.

Intellectual Property

     While the Treaty of Rome prohibits restrictions on imports and exports
between member states, these are permitted when they are justified for the
protection of patents, designs, trade marks and copyright. The Community is
preparing initiatives on patents, trade marks and copyright that will come
closer to the aims of the single market while continuing to protect
intellectual property. An important directive has already been agreed covering
the legal protection of semiconductor integrated circuits.

Movement of People

     Freedom to work anywhere in the Community is one of the basic rights laid
down by the Treaty of Rome. Nationals of member states can enter another
member state to look for work or take a job already arranged. Self-employed
people can set up and carry out business in a wide range of fields.

     Until recently, professional qualifications gained in one member state
were not necessarily recognised in others. A number of specific directives
have now been agreed providing for the mutual recognition of certain
qualifications and making it easier for doctors, nurses responsible for
general care, dentists, veterinary surgeons, midwives, architects and
pharmacists to practise throughout the Community.

     In December 1988 agreement was reached on a general system for the
mutual recognition of higher education diplomas awarded on completion of at
least three years' professional education and training. The directive will
come into force in January 1991 and the professions that it will cover
include lawyers, accountants, engineers, physiotherapists and many others
regulated by chartered professional associations.

     The Community aims to make travel between member states easier for
people as well as goods, by relaxing internal frontier controls on Community
nationals as far as is compatible with maintaining legitimate checks to
combat terrorism, drug trafficking, crime and illegal immigration, and to
safeguard animal and plant health. In March 1989 the immigration channel
for British and other Community nationals at points of entry into Britain
was merged, as a step towards this end.

     In 1987 members states began discussions on co-ordinating methods of
controlling immigration from countries not belonging to the Community. In
December 1989 Community immigration ministers agreed to introduce common
standards of immigration control at their external frontiers, to harmonise
policies and practices regarding the issues of visas, and to exchange
information about persons refused access. Member states are also examining the
possibility of recognising visas issued by other Community members and of
issuing a common European visa.

     Britain and ten other members of the European Community have signed a
new European Convention on Asylum. The Convention sets objective criteria for
determining which member state is responsible for examining a claim for asylum
when more than one member state is involved. In general, it provides that
the country which controlled the entry of the asylum seeker into the
Community, or the first country in which an asylum claim is made, should be
responsible for determining the claim. This would not happen, however,
where other factors, such as family reunion or close associations with
another country, made it sensible for the claim to be considered elsewhere.

Services

     The British Government believes that, as foreseen by the Treaty of Rome,
there should be a genuine single market in services as well as goods, on the
grounds that existing restrictions increase the costs to European businesses
unnecessarily.

Financial Services

     Britain attaches particular importance to the liberalisation of
regulations concerning financial services, which account for an estimated 10
per cent of the Community's gross domestic product. At present, providers of
financial services from one member state can compete with domestic firms in
other member states only if they establish local offices in conformity with
national rules and regulations and obtain authorisation from each member state
in which a local office is established.

     The European Commission's approach to further liberalising measures in
the financial sector is based on the mutual recognition of member states'
authorities and supervisory bodies, and the setting of safeguards. Directives
concerning investment services (still under discussion) and the co-ordination
of banking (approved in December 1989) will enable banks and investment firms
that are authorised to operate in one member state to operate throughout the
Community, without the need for further authorisation.

Insurance

     Another British priority is a real common market in insurance which would
be able to compete with the other leading world insurance markets. Community
measures already enable insurers in one member state to set up a branch or
subsidiary in another to carry on business there on the same terms as
domestic insurers in that state. In June 1988 the rules under which such
business can be carried out were set out by a directive on the freedom to
provide non-life insurance services across frontiers. The directive is to be
implemented by the end of 1992, with transitional arrangements allowing a
longer period for Greece, the Irish Republic, Spain and Portugal. In December
1989 the Community agreed on a directive designed to apply similar rules to
life insurance.

Movement of Capital

     The Treaty of Rome envisaged the free movement of capital within the
Community as an essential complement to the free movement of goods, people
and services. Britain abolished all exchange controls in 1979. A directive
removing controls from all capital movements in the Community was adopted in
June 1988 and applies to most member states from July 1990, and in Spain,
the Irish Republic, Greece and Portugal from the end of 1992, with the
possibility of extension until 1995 for the last two countries.

Competition

     The Community's competition policy is designed to ensure that trade
between member states takes place on the basis of free and fair competition,
and that when state barriers to trade are dismantled they are not replaced
by private barriers. The policy aims to remove restrictions such as price
fixing and market sharing and to ensure that dominant market positions do not
affect consumers or other competing firms adversely.

     The European Commission administers competition rules and can act on its
own initiative, or on complaints from or notifications by member states,
companies or individuals. At the end of 1988 the Commission had 3,451 cases
pending, of which 2,909 were notifications, 375 arose from complaints and 185
had been instigated by the Commission itself. Several companies were fined in
1988.

State Aids

     The Treaty of Rome says that all aid granted by member states'
governments is incompatible with the concept of the common market if it
distorts competition in trade within the Community. However, some kinds of aid
are permitted to correct certain economic imbalances in the economy of a
member state or to repair damage caused by natural disasters.

     The British Government accepts that the temporary use of state aids may
be necessary to restructure industries and restore profitability, but it is
opposed to their use to support industries with no profitable future or to
give a competitive advantage to industries that could exist without them.
It supports the Commission's view that it is important to reduce state aids in
order to ensure a competitive single market.

Public Purchasing

     Purchasing by governments and other public bodies accounts for up to 15
per cent of the Community's gross national product. Two directives, on public
supplies and public works, were amended in 1988 and 1989 respectively to open
up further opportunities for suppliers to tender for government and other
public contracts. A directive for ensuring compliance with these rules was
adopted in December 1989. The Council of Ministers has agreed in principle
to apply procurement rules to entities in the water, energy, transport and
telecommunications industries. The British Government believes that fair
competition will give better value for money.

Company Law

     The Commission's programme for company law aims to minimise the
difficulties that different national legal arrangements pose to businesses.
Directives have already been agreed to co-ordinate safeguards. These measures
harmonise certain aspects of company law such as the disclosure of information
concerning accounts and the internal organisation of companies. Proposals
still under discussion include a draft European Company Statute. A regulation
on European Economic Interest Groupings, which came into effect in July 1989,
encourages co-operation between businesses in different member states to
provide common, non-profit-making support activities.

     A draft regulation for controlling mergers comes into effect in
September 1990. This will enable the Commission to exercise prior control
over certain mergers and clarifies the competences of the Commission and
national competition authorities in the investigation of mergers; at present,
it only has investigative powers. The Commission has undertaken to study the
barriers to takeovers which are retained in some member states and which
can inhibit the development of capital markets.

Deregulation

     The British Government believes that continued deregulation is the key
to the successful completion of the single market, by encouraging a liberal
business environment. It believes that the substantial volume of new
legislation required to create the single market should avoid adding
unnecessary regulatory burdens. This is particularly important in the
developing of small businesses.

     The Commission's Task Force for Small and Medium Sized Enterprises, which
was set up in 1986, has been developing a number of proposals to help small
firms and improve their understanding of Community programmes and policies.
The Task Force is also responsible for operating the fiche d'impact system,
which assesses the cost to business of Commission proposals. Britain is
continuing to press for the fiche system to be improved and for the
Commission to employ is at an earlier stage in the decision-making process.

Transport

     The Treaty of Rome specifies the establishment of a common transport
policy as one of its principal objectives. Although progress in implementing
such a policy has been slow, fresh impetus has been given to it by the
Community's move to complete the single market by 1992. Community transport
ministers committed themselves to an in-depth review of the existing inland
transport market (roads, rail and inland waterways) and, before 1991, to
establish a new system for its organisation, taking into account the needs of
users and the need to reduce running costs to a minimum. The British
Government believes that a system of deregulated transport should form a vital
part of the single market.

Roads and Road Safety

     Although road haulage has grown enormously since the creation of the
Community to the point where industry is often dependent upon it, a number of
member states have continued to operate domestic capacity controls and to
limit the entry of foreign vehicles. The removal of such restrictions has been
a major British objective. In June 1988 the Council of Ministers agreed to
remove by 1993 all quantitative restrictions on the Community's international
road haulage market. A temporary scheme for the provision of transport
services wholly within the boundaries of one member state by an operator from
another member state-which is known as `cabotage' - came into effect in July
1990, and will be replaced by a permanent scheme in 1992. The British
Government is pressing for the full liberalisation of international coach
services.

     The maximum authorised weights and dimensions of commercial road vehicles
are laid down by Community regulations. Britain and the Irish Republic, which
have lower limits, are exempted temporarily from these regulations pending the
strengthening of bridges on trunk roads to take heavier weights. In June 1989
it was agreed that the exemption should expire at the end of 1998.

     The Commission has proposed a number of measures to improve road safety
by making the use of seat belts compulsory for all passengers in cars, and by
harmonising the alcohol limit for drivers and speed limits for buses and
lorries. The British Government has challenged the competence of the
Community to legislate in the field of driver behaviour, which it believes
is an issue not directly related to the objectives of the single market and
best decided at a national level. Nor is the British Government satisfied that
the safety case is properly established in respect of the proposals on alcohol
limits and vehicle speed limits. Other subjects under discussion include the
taxation of lorries and Community funding for transport infrastructure.

     In Britain responsibility for the major road networks lies with the
Government. A Community directive on the assessment of the environmental
effects of public and private projects, which came into effect in July 1988,
requires assessments to be made for all motorway and major road construction,
and for other road schemes where there is likely to be a significant effect on
the environment.

Civil Aviation

     In January 1988 the Community introduced new measures, agreed by the
Council of Ministers in December 1987, enabling airlines to offer cheaper
fares with fewer restrictions and laying down more liberal regulations on
access for Community air carriers to routes between member states, including
the provision of the right to operate scheduled air services between member
states other than their own state of registration. The Community has
introduced a second series of measures allowing a greater degree of
competition between airlines on individual routes and more flexibility in the
setting of air fares.

     Britain is fully committed to the creation of a liberal air transport
market by 1992, and has also been pursuing more liberal air transport
arrangements through bilateral discussions, including agreements with the
Netherlands, Belgium, Luxembourg, the Federal Republic of Germany and the
Irish Republic.

Shipping

     In December 1986 the Community agreed a common shipping policy, which is
to be implemented by 1993. The policy contains measures to liberalise
Community international trade; to enable the Community to take concerted
action against protectionism by other countries; to counter unfair pricing
practices, particularly from state trading lines; and to establish a
competition regime for shipping.

     The Community is now discussing further stages in the development of its
common shipping policy, aimed at the harmonisation of operating conditions and
improving the competitiveness of Community fleets. Britain is pressing for
agreement on the liberalisation of shipping cabotage, and supports the
rigorous applications of the Treaty of Rome's provisions on state aids to
shipping.

Inland Waterways

     Common policies concerning the Community's rivers and canals, which move
large amounts of heavy industrial goods, focus on reducing over-capacity and
barriers to transport. Measures currently being considered include those
dealing with standards for crew welfare and the safety of traffic, reciprocal
recognition of national boatmasters' certificates, cabotage and frontier
controls.

Railways and the Channel Tunnel

     The Community recognises the important role of the railways as part of
its transport system and has adopted a number of measures aimed at improving
their performance and financial position. The Council of Ministers has invited
the Commission to set up a working party to advise on the development of
high-speed rail links across Europe. Britain welcomes improvements in
efficiency, but believes that railways should be autonomous and manage their
business in a commercial way. It therefore considers that the Community's role
in European railway development will need to be defined carefully.

     In February 1986 Britain and France signed a treaty agreeing to the
development, construction and operation of a fixed link across the Channel.
The project, which is being undertaken by the privately funded French/British
Eurotunnel consortium, comprises twin single-track rail tunnels (and service
tunnel) about 50 km (31 miles) long, with a vehicle shuttle service for cars,
coaches and heavy goods vehicles. The journey time between the two terminals
at Folkestone and Coquelles will be about 35 minutes, with trains reaching a
maximum speed of 160 km/h (100 mph). Passenger and freight services are
scheduled to begin in 1993.