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Economic Reform

On 8 November I chaired the Economic and Financial Affairs Council (ECOFIN) in Brussels. The Paymaster General, Rt. Hon. Dawn Primarolo MP, represented the UK. Ahead of the European Court of Auditors (ECA) qualified report on the EU's 2004 Budget, published today, the Council agreed Conclusions in response to the European Commission's ‘roadmap to an integrated internal control framework'. This is the eleventh successive year in which the ECA has been unable to give a positive opinion on the EU's annual budget reflecting long-term, systemic problems with financial management and control systems. It is unacceptable that European taxpayers cannot have confidence in the way in which public money is managed and spent. The Council, led by the UK Presidency, has for the first time taken action, agreeing conclusions that will contribute to bringing about a step change in financial management and control. The Council agreed conclusions on a common methodology for measuring the administrative burden that existing and proposed EU legislation place on businesses. In line with the better regulation priorities of our Presidency, the methodology will ensure that such costs are fully accounted for in impact assessments and, over time, reduced through simplification initiatives with quantitative targets. The Council agreed Conclusions on a package of statistical measures including political agreement to an amended Regulation on the quality of statistics for excessive deficit monitoring and evaluation and improvement in the governance of Eurostat. The Council adopted a decision under article 104(8) of the Treaty, with regard to Hungary's Excessive Deficit Procedure. The Council noted progress on developing a One Stop Scheme for simplifying cross-border business relating to Value-Added Tax obligations (VAT), and discussed existing proposals to extend reduced rates of VAT. The Council was briefed by the Commission on work underway to improve the regulatory framework for cross-border mergers and acquisitions in the financial services industry. Presidency conclusions welcoming the Commission's work were adopted. The Council discussed the financial consequences of ongoing negotiations to reform the EU's sugar regime.