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Euro: the "glue" of integration - EMUbusiness - Issue 8

EMUbusiness - Issue 8
28 November 2000
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EMUbusiness top stories
1. The euro as the glue of European integration
2. German attitudes to euro a worry
3. Euro and code of conduct should push cross-border housing finance
4. Sound finance and structural reform in Germany crucial to whole euro area

Publisher's Note
The rosy economic prospects for the euro area heralded in the European Commission's autumn forecasts are much needed not only for the future of EMU economies, but also for the successful introduction of the euro notes and coins. The German survey reported on here is just one of a number recently which have illustrated a growing sense of disillusion at the promised economic benefits of the euro.

Obviously, public opinion is influenced by the external exchange rate of the euro. However often we are told that the external exchange rate is much less relevant than it used to be, the message has yet to be reflected in much of what we read. The general public also knows without being told that holidays in the United States and many other
popular non-euro-area destinations have become much more expensive. The promise of more growth will not necessarily deliver the stronger exchange rate which the pundits have generally been saying for months has to come on the basis of the economic fundamentals, but let us hope that it is a step in the right direction. If not, the auguries are not good for consumer confidence at the beginning of 2002 when
the euro cash comes in.

Marion Bywater
Publisher, EMUbusiness

EUbusiness Week and EMUbusiness reach a global community of over 11,000 business people interested in doing business in Europe. For details of how to reach this audience:

1. The euro as the glue of European integration
A well-functioning single currency can and will help provide the EU with the integrative "glue" needed to face enlargement and welcome the new members, and thus avoid the danger of diluting the integration progress achieved thus far, European Central Bank President Christian Noyer said in a speech in Oxford, U.K., on November 22. Stressing that it is not a question of "whether or not", but rather a matter of "when and how" the EU will enlarge, he said Economic and Monetary Union will play a major role in shaping the way forward because it will in itself over time trigger further integrative steps.
Full story:

2. German attitudes to euro a worry
The general public in Germany is still very ambivalent about the euro and this should be a cause for concern, the German Banking Federation (Bundesverband der deutschen Banken) says in a commentary on the latest survey figures on attitudes to the euro. These show that two thirds of Germans are not aware that they already have a single
currency. They think arrival of the single currency will coincide with introduction of the cash (on January 1, 2002).
Full story:

3. Euro and code of conduct should push cross-border housing finance
A code of conduct on housing finance should be ready within weeks, Pat O'Reilly, President of the European Mortgage Federation, told the Euro Week European Finance Convention in Paris on November 23. Taken together with the impact of e-commerce, this is expected to provide a spur to cross-border mortgage lending in the euro-area as borrowers
will not only have transparency in mortgage pricing through use of the euro, but also in terms and conditions as a result of the code and ready access to competitive offers via the Internet and e-mail.
Full story:

4. Sound finance and structural reform in Germany crucial to whole euro area
Inflexible labour and product markets in Germany and the potential pensions burden as the population ages are the Achilles' heels of the German economy, EU Finance Ministers have warned. They could, if they are not tackled, not only jeopardise German growth, but also growth in the euro-zone as a whole because of the role the German economy plays as the locomotive for the euro-area. Finance Ministers are also concerned at the signs of overheating in Finland and the Netherlands.
Full story:

Other stories on EUbusiness in November

EU ministers strike tax deal
EU finance ministers reached provisional agreement early on Monday 27 November on a package of measures which will take tax co-ordination further forward and reduce tax evasion by personal savers, particularly those in the euro-area who tend to invest in jurisdictions such as Luxembourg and Switzerland, which have no withholding tax on non-resident savings. The same package incorporates agreement to eliminate by end-2005 tax incentives for business which distort competition. Ministers are hopeful the whole package, which also includes rules on intra-company transfers of royalties and interest, can be laid to rest by the time of the crucial Nice summit next month.
Full story:

Euro-zone external trade shows EUR 3.3 billion surplus
Euro-zone external trade showed a EUR 3.3 billion surplus in September, according to the latest report from the EU statistical office, Eurostat. The surplus showed a significant increase on the EUR 1.3 billion surplus of one year ago.
Full story:

Inflation still biggest worry, says ECB chief
Inflation is still the main concern in the euro-zone and it is likely to remain high for several months, ECB chief Wim Duisenberg has warned the European Parliament's economic and monetary affairs committee. Mr Duisenberg, President of the European Central Bank, blamed the inflation level - currently about 2.7% in the euro-zone - on the high price of oil and the ailing euro.
Full story:

Industrial production up 0.8% in euro-zone
Seasonally adjusted industrial production increased by 0.8% in the euro-zone in September compared to the previous month, Eurostat reported on 24 November. The corresponding data for the whole of the EU (EU15) showed a 0.7% rise.
Full story:

Solbes unveils EU economic forecasts for 2000-2002
Europe's economic situation is "the best for ten years" according to a two-year economic forecast issued by Pedro Solbes, Europe's Budget and Monetary Affairs' Commissioner. The report for 2000-2002 says average GDP (gross domestic product) growth in the EU is forecast to
remain around 3%. Although rising oil prices are blamed on a slowing growth rate and a weak euro for "imported inflation". Growth rates in both 2000 and 2001 will be slightly higher in the euro-area than in the EU as a whole: 3.5% as opposed to 3.4% in 2000 and 3.2% as opposed to 3.1% in 2001. The figures is 3.0% for both in 2002.
Full story:

Securities: Commission urges update of current rules
The Commission has published plans to upgrade the Investment Services Directive (ISD) to take into account the accelerating pace of change in Europe's financial markets. The need to update the Union's legislation in this area was emphasised recently in a report by the Committee of Wise Men on the regulation of European securities
Full story:

Internet Monitor

Euro-zone balance of payments
An ECB statistical press release covering monthly developments in September 2000 and international investment position as at end-1999 can be viewed at the ECB site.

Key indicators for the euro-zone
A set of tables with the most relevant economic statistics about the euro-zone.

Autumn Economic Forecasts 2000 -2002
Updated 27 November 2000 version, now available for download.

Upgrading the Investment Services Directive (ISD)
Questions and answers on the proposed changes contained in the Communication, in which the Commission opens a consultation on improving the EU regulatory framework for securities markets.

Euro Parliament Watch
Dr Wim Duisenberg, President of the European Central Bank, gave details this Thursday to the Committee on Economic and Monetary Affairs of the growth and inflation projections that the Bank will start publishing next month. For his speech, and the transcript of the Monetary Dialogue hearing with questions and answers, go to .

EMU diary
ECOFIN Council, 27-28 November, Brussels
European Parliament session, 29-30 November, Brussels
Internal Market/Consumer Council, 30 November, Brussels
PressZONE - new on EUbusiness!
Publish your own news, and legal, financial and regulatory
information articles related to business in the EU directly onto the EUbusiness web site.
For details, contact Dawn Bennett at


UK company reports
Direct access to 1.4 million UK company reports is now available on EUbusiness, as compiled by ICC. There are no set-up charges, no monthly charges, and the database is free to search. Try it out!

Any Answers?
* Sara Winaker asks: Which countries currently allow statutory reporting and VAT returns represented in Euros vs. national currencies?

* Georgette Giatis is looking for information on what funding is available for the setting up a restaurant, bed and breakfast, in the northern parts of Greece, Epirus, and what incentives are available to get people to move back to the country.

Answer these questions, or post your own, in our Any Answers section.

Business Forum
* In 'Find a Business Partner', Marilia Angove's company are experts in the field of "developing individuals and organisations towards peak performance".

If you're looking for a business partner, a buyer, a supplier, or a job visit our business-to-business forum.

Poll: electronic invoicing
As outlined above, details of the Commission's draft Directive on cross-border electronic invoicing were announced this week. Do we need an EU Directive on electronic invoicing? 74 per cent of our voters believe it is essential for modern cross-border trade. Make your voice heard:

Workshop: Innovation in Europe
Our next three online discussion forums will cover Innovation in Europe (probably December 13th), regulation on the Internet (January) and euro notes and coins (February). If you are interested in taking part, or would like to be one of our panel of experts, please email
Wendy Jones at

Suggest / provide a Link
If you know of a web site which you think would be helpful to EUbusiness users, send us your suggestion, either from the relevant section page, or at: .
EUbusiness also welcomes inbound links. Please contact Hazel Daniells at .

Another addition to our popular Key Topics factsheets, this time on the "Safe Harbour Privacy Principles" at . With thanks to Eduardo Ustaran of Paisner & Co of the United Kingdom.

Let us know what you think of EUbusiness, where you would like to see improvements, and where your particular interests lie.

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