Russia and Roaming

8.00 Kangaroo Group Breakfast Debate with the German Finance Minister. He makes it quite clear that to tackle VAT fraud they want to agree that any Member State can switch to using the Reverse Charge mechanism for everything. He is at least candid about Germany wanting this for itself because it solves other problems that they have with VAT collection under their Federal system. I am already getting a little fed up with hearing about the German ‘constitutional position’. I ask whether their scheme would rule out abolition of cross border tax (which I think it must) and close off other options. He does not really answer. Other tax issues are discussed but most of us have to leave at 9.00 to get to Committee.

9.00 I get to ECON just after 9.00 in time to discuss mobile phone roaming charges. I say that we should have a sunrise clause for data. I think broad agreement on this is building and I ask the Commission whether it raises any problems. They say not and that there are already similar proposals coming from the Presidency. The only other significant point debated is whether the retail mark-up should be 130% or 150%. Some members fear that companies will just mark up their domestic tariffs to compensate for losing their roaming super-profit. However, that would be illegal and is probably why companies have said they will not do that. Goebbels the Rapporteur on Russia comes to discuss his report and a WTO amendment he has drafted. He will send it to me.

11.00 Charlie McCreevy comes to update us on his plans. Seems not long ago that he did this, so some is similar and some has moved on. I leave at 12.00 to go to the JURI Committee as they are meant to be discussing damages actions. In fact they are running late and it is postponed again. I do wish they would be a bit more organised, but at least I am not alone in not knowing as the Commission chap has sat there to no avail too.

12.30 ECON Prep meeting. Carol and I get waylaid so arrive a little late. We go through votes, the only real discussion is on pensions and how/whether to move funds when an employee moves firms. It seems the problem in Germany is that there are no separate pension funds, the money is used by firms and then when workers retire they pay out of ongoing revenue, just like Governments do. So if they had to pay out a pension fund share for a moving employee they would lose capital, and for that reason they try to reduce mobility!! Anyway, we thought this not very liberal so stuck with Sophie’s voting proposals that the money should move.

13.30 A ‘lunchless’ meeting with the FSA about hedge funds. The usual suspects there: Peter Skinner, me, Wolf Klinz, Margarita Starviecute, John Purvis, Ike van den Burg and Prevenche Beres. The presentation is quite interesting but the answers to questions not as informative as hoped. Anyway I suppose the conclusion is that the things that are complained about with hedge funds are activities that could happen with other funds – one should target the behaviour not the fund. To some extent that is what the FSA do by regulating fund managers. They can not get at the fund anyway as they are always offshore. It also seems they could avoid regulation by appointing more than one manager, e.g. one not in the UK so not FSA regulated, but when I asked they said this was not common – however, when LTCM had their crisis they had two mangers.

15.00 ECON and votes. I leave after votes and work on Russia and Roaming. Leave at 7pm in order to get to the supermarket.