The Ecofin Council met on 21st June 2013 and as Ireland holds the Presidency of the Council of the EU, I as the Minister for Finance chaired the meeting. Minister of State, Brian Hayes TD represented Ireland at the meeting. The meeting was attended by representatives of all 27 EU Member States and of Croatia (which has observer status until its accession into the EU on 1st July), representatives of the Commission and the European Central Bank, the European Investment Bank (EIB), the Economic and Financial Committee and the Economic Policy Committee. The following issues were discussed.
European Semester 2013
Ministers endorsed the Commission’s Country-Specific Recommendations and Council Recommendations to Members States on their National Reform Programmes. The Council also approved a specific draft recommendation on the economic policies of the euro area member states, and draft conclusions on Croatia.
These will be discussed at the General Affairs Council and the European Council this week, and will be formally adopted at the July Ecofin.
Implementation of the Stability and Growth Pact
The Council adopted decisions closing the excessive deficit procedures for Italy, Latvia, Lithuania, Hungary and Romania. The Council also adopted recommendations extending the deadline for correction of the excessive deficit for Spain, France Poland, Slovenia, Portugal and the Netherlands. Ecofin stepped up the excessive deficit procedure for Belgium, establishing that action taken to correct its deficit has been insufficient and giving notice to take necessary measures.
Commission/EIB report to the European Council
Ministers heard a presentation from the Commission and the EIB on a joint report to the European Council on the implementation of the EIB capital increase and on joint Commission-EIB initiatives aimed at improving financing conditions for SMEs. This report will be examined by the European Council at its meeting on 27-28 June.
Financial assistance to Ireland and Portugal
Ministers adopted decisions on the lengthening of maturities of loans to Ireland and Portugal from the European Financial Stabilisation Mechanism (EFSM). This puts into effect the agreement reached in principle at the Informal Ecofin in Dublin in April. The average maturities are extended from 12.5 years to 19.5 years.
ECB/Commission Convergence Reports and enlargement of the euro area
Following brief presentations by the Commission and ECB of their convergence reports on Latvia, the euro area member states adopted a recommendation in favour of a Commission proposal on the adoption by Latvia of the euro on 1 January 2014. Ecofin is expected to adopt the decision at its July meeting.
Development of policy options in the climate/energy field
This issue was discussed at the request of Poland as a follow-up to the May European Council conclusions as regards energy and climate policy. Poland envisages a greater role of the Economic Policy Committee and the Economic and Financial Committee in discussions on climate and energy policy within other Council formations, to ensure the long-term sustainability of public finances. The Presidency concluded that it would reflect, together with incoming Presidencies, on the next steps to prepare a discussion in the European Council next year.
Ecofin Report to the European Council on tax issues
Ministers endorsed the Ecofin Report to the European Council on tax issues. The report, which was drafted by the Irish Presidency, summarises the progress made on a wide range of tax issues during the Irish Presidency of the Council of the EU .
Report by Finance Ministers on tax issues in the framework of the Euro Plus Pact
Member States who are participating in the Euro Plus Pact and who hold the Presidency of the Council of the EU are required, by the end of their Presidency term, to provide a report that covers progress made on the coordination of tax policies. The Report was endorsed by Ecofin, and will be forwarded to the European Council on 27-28 June.
Commission Proposal on Automatic Exchange of Information
The Commission presented its recently published proposal for an amendment to the Directive on Administrative Cooperation to Ecofin. This proposal seeks to broaden the list of categories which are subject to automatic exchange of information within the EU. Ministers held a brief exchange of views, and called on the Working Party on Tax Questions to start technical work on the proposal.
Bank Recovery and Resolution
The proposed Bank Recovery and Resolution Directive (‘BRRD’) provides for a common framework of rules and powers to assist EU countries manage arrangements to deal with failing banks at national level as well as cross-border banks. The main political issues discussed at Ecofin related to the bail-in and financing elements of the BRRD proposal which have been extensively discussed at Coreper on a number of occasions and at Ecofin on 14 May. A related issue was the point at which resolution funds can be called on to cover losses and the extent of write-down that must be applied to creditors before this can happen. The meeting was adjourned and will resume on Wednesday 26th June to continue discussion on the BRRD proposal when it is hoped agreement amongst Ministers can be reached. In the meantime, intensive high level discussions are underway between the Presidency and Member States to try to progress issues before the resumption of Ecofin on Wednesday.
Other business – Deposit Guarantee Schemes Directive
The Presidency updated the Council on the state of play on a draft directive on deposit guarantee schemes. The aim of the proposed Deposit Guarantee Scheme (DGS) Directive, a recast of the 2010 DGS Directive, is to significantly enhance depositors’ confidence by introducing faster pay-out and more credible funding of the various Deposit Guarantee Schemes. This proposal forms part of the Banking Union Proposals. It proposes to simplify and harmonise the current DGS Directive. It looks at the scope of the coverage and arrangements for pay-out; optional mutual borrowing among Deposit Guarantee Schemes in certain circumstances, the introduction of an information template and better access to information for depositors.
Over breakfast on the morning of 21 June, Ministers were debriefed on the outcome of the Eurogroup meeting the day before and they then had a discussion on the economic situation.
The agenda for the Ecofin meeting on 21 June was a full one and a great deal of progress was achieved. I look forward to reaching agreement on the BRRD at the resumed Ecofin tomorrow.