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3.7.

2003 EN Official Journal of the European Union C 155 E/5

In reply to the question of the Honourable Member, the Commission is currently not keen on launching a
new broad ‘macro’ study to calculate the cost of the non-integration. This is because methodological issues
still remain to be dealt with in this area and because this kind of study would not clearly identify the
specific measures needed to maximise the benefits from integration or provide a judgement on specific
priorities. For this, a more detailed examination of the level of integration in the various sectors of the
Community’s financial system and of the likely consequences of the Community’s financial market
convergence is needed.

The Commission is therefore undertaking several research/study projects that could contribute to this. All
studies will be finalised before the end of the 2002.

They are concentrated on two areas:

(i) developing indicators to monitor trends and developments in the financial sector on the one hand and

(ii) quantifying the benefits of financial integration on the other hand.

In the first area, (i) two studies will provide the tools for monitoring financial markets and assessing the
impact of Commission policies:

 A first study on integration indicators was finalised in January 2002. The study compares alternative
indicators and proposes ‘the best indicators’ to monitor integration in financial markets. It
distinguishes between the most integrated markets from those in need of further action. The study is
now publicly available on the Internal Market Directorate General (DG) website (1).

 The second study on ‘The monitoring of structural changes and trends in the Internal Market for
financial services’ will provide economic and policy significant data, develop indicators and identify
structural trends and developments, to allow for early detection of the remaining problem areas and
swift reaction to keep pace with market developments.

In the second area, (ii above) two further studies are underway:

 A DG Internal Market one which will calculate the benefits of securities markets integration in terms
of economic growth, employment, etc., concentrating on the evolution in trading costs and the costs
of capital in the securities markets.

 The second study led by DG Economic and Financial Affairs, adopts an alternative bottom-up
approach, tries to measure the link between financial market efficiency, increasing integration and
corporate growth and calculates the changing costs of finance for Community companies in a context
of deeper financial integration.

(1) http://www.europa.eu.int/comm/internal_market/en/update/economicreform.

(2003/C 155 E/005) WRITTEN QUESTION E-1661/02


by Richard Corbett (PSE) to the Commission

(11 June 2002)

Subject: Taxation of subscriptions to professional organisations and trade unions

Do all Member States allow membership subscriptions to professional organisations to be tax deductible?

Do any Member States allow membership subscriptions to trade unions to be tax deductible?

Does the Commission agree that all should be treated equally?


C 155 E/6 Official Journal of the European Union EN 3.7.2003

Answer given by Mr Bolkestein on behalf of the Commission

(7 October 2002)

The Commission understands the question to refer to personal income tax  an area not covered by
Community legislation.

Although Member States are, of course, free to make their own rules for income tax, these have to be
compatible with the four fundamental freedoms guaranteed by the Treaty and must not discriminate on
the ground of nationality.

Since income tax is not harmonised, Member States do not routinely inform the Commission of their tax
rules and neither does the Commission monitor these. Hence, to date, the Commission has not collected
information on the tax treatment of membership subscriptions to professional organisations or trade
unions nor does it consider it necessary, at present, to co-ordinate this type of tax allowance at
Community level.

(2003/C 155 E/006) WRITTEN QUESTION P-1670/02


by Charles Tannock (PPE-DE) to the Commission

(5 June 2002)

Subject: The use of EU funding in the Palestinian territories

Could the Commission indicate whether it has reason to believe that the claim by the Israeli Government
that EU funds administered by the Palestinian Authority under the direct control of President Arafat have
been used to fund terrorist attacks on Israeli civilians is correct, and, if not, has the Commission studied
the evidence produced by the Israeli authorities to support that claim?

Could the Commission also comment on allegations that Palestinian children have been provided with
textbooks paid for by the European Union containing inflammatory passages such as:

The final and inevitable result will be the victory of the Muslims over the Jews (1).

This religion will defeat all other religions and it will be disseminated, by Allah’s will through the
Muslim Jihad fighters (2)?

(1) Our Arabic language for 5th grade # 542 page 67.
(2) Islamic Education 7th grade # 564 page 125.

Answer given by Mr Patten on behalf of the Commission

(19 July 2002)

The Commission examined the allegations that have been made by the Israeli authorities on the misuse of
Community funds. The Commission has looked carefully at the evidence provided by the Israeli
government (Minister Naveh) and by the Israeli Defence Forces. The Commission also invited the
International Monetary Fund (IMF) and the Palestinian Authority (PA) to comment on the allegations. The
Commission, on the basis of the material it has examined, has not found any evidence of Community
funds being used for purposes other than those agreed between the Community and the PA. The
Commission takes this matter extremely seriously and will continue to give utmost priority to the
examination of any further allegtions of misuse of Community funds.

The Commission has never paid for text books used by the Palestinian Authority. As regards the contents
of text books, the Commission would like to refer to the Council Document ‘Palestinian Schoolbooks: The
EU View’ published on the Council’s web site http://ue.eu.int/newsroom/NewMain.asp?LANG=1