WRITTEN QUESTION P-2164/99 by Christopher Huhne (ELDR) to the Commission. Inquiry into rising foreign exchange costs.
8. 8. 2000 EN Official Journal of the European Communities C 225 E/61 (2000/C 225 E/060) WRITTEN QUESTION E-2160/99 by Cristiana Muscardini (NI) to the Commission (24 November 1999) Subject: Responsibility for freedom of movement and public safety The pressing problem of security, with reference to illegal immigration, was discussed at the Tampere European Council of 15 and 16 October 1999. It has now finally been acknowledged that immigration is an issue to be dealt with at European level, rather than by each Member State working on its own. There has nonetheless been a failure to understand the difference between the freedom of movement established following the abolition of internal borders, which comes within the Unionís sphere of responsibility, and the management of public safety issues, which is the responsibility of the Member States, whose laws have not been harmonised and are in some cases totally dissimilar. For example, the sale and use of self-defence devices, such as sprays used to ward off attacks by bag-snatchers or rapists, is permitted in some Member States, while in others even their very use is prohibited. Without going into the merits of an internal market within which some products are legal in certain in others, does the Commission not consider that it would be useful and Members States and illegal appropriate, pending the implementation of the áthird pillarí, to call on the Member States, as part of action to combat crime and protect the public, to ensure that basic self-defence devices such as sprays and low-voltage electrical fences are legalised in all Member States, with, if necessary, each being free to lay down its own rules governing the sale and installation or use of such devices? Answer given by Mr Vitorino on behalf of the Commission (27 January 2000) According to the Treaty on European Union, and as confirmed by the special meeting of the European Council held on 15 and 16 October 1999 in Tampere, one of the objectives of the Union shall be to provide citizens with a high level of safety within an area of freedom, security and justice. This shall be done by, inter alia, developing common action among Member States in the fields of police cooperation. Common action in the field of police cooperation shall include cooperation and joint initiatives in, among others, the use of equipment. Any action developed in this context shall not, nevertheless, affect the exercise of the responsibilities incumbent upon Member States with regard to the maintenance of law and order and the safeguarding of internal security. The measures suggested by the Honourable Member seem to fall under the said responsibilities of Member States. Moreover, the Commission reaffirms its willingness to promote the full and immediate implementation of the Treaty of Amsterdam on the basis of the Vienna action plan and of the political guidelines and concrete objectives agreed by the European Council in Tampere. (2000/C 225 E/061) WRITTEN QUESTION P-2164/99 by Christopher Huhne (ELDR) to the Commission (19 November 1999) Subject: Inquiry into rising foreign exchange costs Will the Commission confirm that there has been a very sharp rise in the foreign exchange dealing costs between the euro and the pound sterling over the past year, and will it consider whether there has been any illicit collusion between participants in this market, or whether there is an abuse of a dominant position? C 225 E/62 Official Journal of the European Communities EN 8. 8. 2000 Answer given by Mr Monti on behalf of the Commission (7 December 1999) The Commission is aware of cases where the foreign exchange dealing costs between the euro and the pound sterling have risen following the introduction of the euro. The Commission understands that this has arisen for the following reasons. The bid/offer spread on foreign exchange markets is measured in ápipsí. Thus, if the bid price for sterling/ euro is 0,6397 and the offer price is 0,6399, there is a spread of two pips. The Commission understands that prior to the introduction of the euro, the bid/offer spread on the retail market for sterling/deutsch- marks was in the region of five pips for GBP 5 million. Following the introduction of the euro, the bid/ offer spread on the retail market for sterling/euro is in the region of three pips for € 10 million. Given the difference in value between the euro and the deutschmark, although the spread has gone down in absolute terms, the cost in percentage terms has increased significantly. The Commission understands that there is also currently a bid/offer spread of around three pips for sterling/euro on the interbank market. This apparently makes it difficult for banks to charge less than three pips on the retail market. These facts could suggest an absence of competitive pressure on providers of foreign exchange services to reduce their spreads, either at the retail level or at the interbank level or both. However, they are not evidence in themselves that infringements of Community competition law either have been or are taking place. So far as the application of Article 82 (ex Article 86) of the EC Treaty is concerned, there are many hundreds of banks which deal in sterling/euro and provide foreign exchange services to corporate customers. It seems unlikely therefore that any individual bank is in a dominant position or that there are a number of banks which could be considered to be in a joint dominant position. As regards the application of Article 81 (ex Article 85) of the EC Treaty, the Commission has no evidence that collusion has taken place. Indeed, in general terms, successful collusion to maintain or increase spreads would probably require two elements, both of which appear to be missing on this market. The first is that there would need to be a relatively small number of participants in the collusion. A cartel involving hundreds of participants would seem most unlikely. Secondly, successful collusion would require some degree of transparency of prices in order to allow for enforcement. However, on the retail market, the spread is in principle only known to the buyer and seller. For these reasons, it might be considered that a spreads cartel on the foreign exchange retail market would be unlikely to succeed. Finally, although the Commission has not received any formal complaint regarding the subject matter of the Honourable Memberís concern, it will continue to monitor the situation. (2000/C 225 E/062) WRITTEN QUESTION E-2168/99 by Gerhard Schmid (PSE) to the Commission (29 November 1999) Subject: Teleworking centres in Bavaria in all administrative The Bavarian land government wishes to establish so-called áteleworking centresí districts that are Objective 5b areas, as part of the átop-elevení programme. A total of 40 such centres are to be established in Bavaria. The amount of DEM 60 million is being contributed from public funds. The greater part of that amount consists of European aid allocations. The Objective 5 programme is contributing some DEM 17,8 million, and about DEM 7,5 million are coming from the European Social Fund. The Bavarian land contribution runs to about DEM 15 million. A brochure has also been prepared. It does not contain a single mention of the fact that the greater part of the funding has been allocated from the EU budget. Nor is any indication to be seen on the ground, on any of the projects known to me, that European funding has been provided